Concerns about workers in buyouts

Rep. Barney Frank, chairman of the House Financial Services Committee, suggested Wednesday that Congress might “have to act” to protect employees of companies acquired by private equity firms.

The Massachusetts Democrat offered no specific measures Congress might enact. He spoke during a committee hearing on the current wave of huge private buyout deals.

Rep. Spencer Bachus of Alabama, the panel’s senior Republican, cautioned that such action might not be necessary. “It is not yet clear that privately managed companies act any differently with respect to worker retention or compensation than publicly traded companies,” he said.

Unions, however, say the mega-deals may be hurting workers and widening economic inequality. The Service Employees International Union has mounted a campaign urging private equity investors to give workers a say in buyout deals.

The AFL-CIO appealed Wednesday to the Securities and Exchange Commission to hold off approving a proposed $4-billion public stock offering by giant private equity firm Blackstone Group and to require that it be regulated as an investment company.