A federal judge has ruled that Alpha Natural Resources can break its contract with the United Mine Workers union and modify its retiree health care plan.
U.S. Bankruptcy Judge Kevin R. Huennekens granted Alpha’s motion on the UMW contract and retiree health care benefits after a hearing in Richmond on Monday.
UMW President Cecil Roberts said the ruling came as no surprise and described it as “stripping away our collective bargaining agreement” with Alpha and “wiping away the company’s obligation for retiree benefits.” Roberts said the union is still trying to work out some sort of deal with Alpha, but suggested UMW members might walk off the job if acceptable terms aren’t reached.
“We are trying to reach an agreement with the company to resolve this issue, but if we are unable to do that we will have to examine our options,” Roberts said. “Alpha can attempt to impose whatever terms and conditions at its operations it may desire. That doesn’t mean our members will agree to work under them.”
Bankrupt Alpha had asked the court in March to relieve it of its contract with the mine workers and its obligation to pay UMW retiree benefits. The company said it needs to slash costs to survive what it called “the historic collapse of the domestic coal industry,” citing “a confluence of macroeconomic headwinds, regulatory obstacles and competitive pressures” that have forced numerous bankruptcies and cost thousands of miners their jobs.
Alpha lawyers complained that they spent nearly $53 million on health care benefits for union employees last year and spent an average of 34 percent more on each union employee than each non-union employee. They listed about $872 million in accrued retiree health care obligations to union employees.
The UMW had warned last August, when Alpha sought bankruptcy protection, that it would fight efforts to gut its contract with the company and, earlier this year, objected to Alpha’s plan to pay nearly $12 million in bonuses to top corporate executives.
Alpha’s latest bankruptcy filing said the union represents 610 active employees, or about 11 percent of Alpha’s active workforce, and 2,600 of its retirees. The company recently closed one of its two active unionized mines in Greene County, Pennsylvania.
Reach Ken Ward Jr. at email@example.com, 304-348-1702 or follow @kenwardjr on Twitter.