Health Professionals and Allied Employees/AFT-AFLCIO
110 Kinderkamack Road
Emerson, NJ 07630
A lawsuit was filed in Superior Court of NJ, Bergen County on June 5 against the Health Professionals and Allied Employees (HPAE) and a Retiree Medical Trust established by HPAE through bargaining with employers in 2006 to provide reimbursement for medical costs in their retirement.
Kathi Fonti, the plaintiff in the lawsuit, is a former union officer who pled guilty in June of 2009 for using union funds for personal use, and was fined and sentenced to two years’ probation in December of 2009.
HPAE believes that the lawsuit is entirely without merit, and brought about solely in retaliation because the union exposed and reported her to the authorities for inappropriate use of union funds.
“Nurses and health care workers often retire with no additional medical coverage, and we created this trust to offer an additional benefit,” said Ann Twomey, president of the 12,000 member health care union . “It’s unfortunate that Kathi Fonti, who was forced to resign from our union for her illegal use of union members’ dues, would once again work against the needs and interests of her fellow union members and health care workers. Contrary to her claims, the Trust’s benefits, policies and practices are provided to all members who participate in the Trust.”
The Retiree Medical Trust is regulated by the federal government as a ‘voluntary employee beneficiary association’ (VEBA) that provides reimbursement for out-of-pocket medical costs for eligible retirees, based on their accrued benefits.
The Trust has more than 3300 HPAE participants in 8 different union locals. Each HPAE local held a vote of their members to join the Retiree Medical Trust, and to authorize the payroll deduction that funds the Trust. The vote was supervised by the American Arbitration Association.
The Trust is a Taft-Hartley fund, with more than $7million is assets currently, is administered by a Third party Administrator , with both employers and union representatives on the Trust. Assets have increased by more than 8% a year since 2008, the same year the fund began providing benefits to HPAE retirees.
In addition, Kathi Fonti, with anonymous backing, has launched a smear campaign against HPAE officers and staff on Facebook, distorting public information concerning HPAE finances.
“All HPAE finances and governance are transparent and publicly available, filed with both the IRS and Department of Labor, and our elected Executive Council strictly controls and oversees our use of union dues, largely spent defending and protecting the rights of nurses and healthcare workers,” said Barbara Rosen, an RN and HPAE’s secretary-treasurer. When HPAE speaks up, we do so with our name, because our name and our work matter – the same is not true of this facebook smear campaign. It will not deter our pubic work challenging the increasing for-profitization of health care in NJ.”
HPAE’s constitution would not allow Fonti’s reinstatement as a union member, and she was also forbidden as a condition of her sentence to hold union office or to represent members.