Rite Aid has filed for Chapter 11 bankruptcy. 

Chapter 11 bankruptcy, frequently referred to as a “reorganization bankruptcy” (in contrast to “liquidation bankruptcy” under Chapter 7), allows businesses with substantial debt to reorganize their debts and assets and continue operations so they can return to financial solvency.  Rite Aid has committed to abide by your current contract as they go through the bankruptcy process. 

Key Points to Know:

  • The Company cannot unilaterally modify or reject the CBA, even in the event that it files for bankruptcy.
  • Rite Aid must negotiate in good faith with the Union regarding any proposed changes to the CBA that the Company claims are necessary to reorganize itself under Chapter 11.
  • A court will not grant a request by Rite Aid to modify or reject the CBA unless the Company can show that the Union refused to reach agreement without good cause.
  • Rite Aid would have to go through a similar process to modify or reject its obligations to maintain retirement and health benefits under the CBA.
  • Rite Aid will obtain Bankruptcy Court permission to pay workers all the wages and benefits they are owed as of the day it files.
  • The grievance procedure under the CBA remains in effect along with the CBA itself.

You can read a more detailed explanation of these points here. If you have any questions, reach out to your Union Representative. We will keep you posted as we learn more.