Sweet taste of victory for Peeps union workers as judges rule against candymaker

By Damian Paletta April 26 at 2:47 PM

When they went on strike in 2016, members in the union for marshmallow makers chanted, “No justice, no Peeps!”

And on Thursday, a federal appeals court said the Peeps workers had a point.

The U.S. Court of Appeals for the Fourth Circuit ruled that Just Born Quality Confections, the firm in Bethlehem, Pa., that makes the candy known as Peeps, could not unilaterally stop enrolling new employees in a pension without paying a penalty, something it had tried to do since 2015.

The appeals court decision could have a major effect on hundreds of other companies that are trying to determine whether to continue making payments to their own multi-employer pension plans. A number of multi-employer plans have weak balance sheets, exacerbated by a wave of aging workers and new retirees. This dynamic has forced some firms to pay higher premiums to their pensions in an effort to boost solvency.

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But Thursday’s legal ruling made clear that any company that tries to unilaterally block new workers from a pension plan would have to pay a withdrawal penalty, which in Just Born’s case would exceed $60 million. The company makes about 2 billion Peeps each year, as well as other candies.

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