By Doug Cunningham

UAW workers voting on a tentative contract agreement with GM could legally move to stop the ratification vote because they aren’t getting legally required disclosures about the financial risks of the new health care trust fund created in the agreement. That’s according to Santa Clara University Associate Law Professor Stephen Diamond.

[Diamond]: “My personal view is that it’s perfectly appropriate for workers to challenge this right now to stop the vote. Go into federal court and obtain an injunction or other kinds of relief that are available. I think the SEC itself should step in and stop this.”

Diamond says the use of convertible bonds to finance 15 percent of the VEBA health care trust ties UAW retiree health care to GM’s future. But the union is selling the tentative agreement by saying it guarantees retiree health care regardless of what happens to GM.

[Diamond2]: “This is in direct opposition to the statements that have been made by the United Auto Workers union leadership. They’re contending that this will make the health care obligation owed to future retirees safe from GM’s potential bankruptcy. And that’s simply not true.”