It’s a bit day today for miners at Patriot Coal, and for the bankrupt coal company. As Jessica Lilly reports over at West Virginia Public Broadcasting:
The United Mine Workers of America is expected to vote today on an agreement between Patriot Coal and the union. The nation’s largest miners’ union says a proposed settlement with Patriot Coal would restore most wage cuts the company had sought as part of its bankruptcy reorganization.The nation’s largest miners’ union says a proposed settlement with Patriot Coal would restore most wage cuts the company had sought as part of its bankruptcy reorganization.
The ratification vote is expected to happen at the various Patriot subsidiary workplaces in West Virginia and Kentucky where the UMWA represents the workers.
Some 1,800 current or laid-off Patriot workers in the two states are eligible to cast a ballot.
If you missed it before, here’s the video of UMWA President Cecil Roberts explaining the deal to union members (though you have to sit through a fairly long history of Patriot’s creation to get to the actual contract details):
There are several key documents you can read to understand this more fully: A proposed new Collective Bargaining Agreement between the UMWA and Patriot Coal operations, a Memorandum of Understanding between the company and the union, and a list of existing Collective Bargaining Agreements between various parties to the bankruptcy proceeding.
In a press release earlier this week, the UMWA noted that “there significant improvements over what federal Bankruptcy Judge Kathy Surratt-States ordered on May 29, 2013.” According to the union, those improvements include:
— Restoration of all but $1.00 per hour in wage cuts that were as high as $7.53 per hour for some job classifications;
— Annual wage increases of $0.50 per hour beginning Jan. 1, 2015;
— Keeping Patriot in the UMWA 1974 Pension Fund, meaning there will be no affect on pension benefits for current retirees, and currently active members will continue to earn pension credit;
— Elimination of monthly premiums for health care benefits;
— Reducing the annual out-of-pocket maximum for health care benefits by 60 percent, from $4,000 to $1,600;
— Restoration of life insurance benefits, vision care benefits, dental insurance and Accidental Death and Dismemberment insurance;
— Establishment of a Voluntary Employee Benefit Association (VEBA) as the mechanism for paying retiree health care benefits going forward. As part of the settlement, Patriot gave the union a 35-38 percent stake in the company. The VEBA will be funded by initial contributions by Patriot, the sale of the union’s stake, and ongoing royalty payments of $0.20 per ton of coal mined by the company.
It’s rare in a bankruptcy case for unions and working people to come out winners, and certainly comparing what Patriot workers and retirees had before the bankruptcy to this deal doesn’t make the results look that great. But the real point of comparison is the ruling by Judge Surratt-States, which allowed Patriot to throw out the union’s contract and implement its own version of a deal. Patriot officials deserve credit for not simply walking away with that victory — but of course, they were facing not only the strong possibility of a UMWA strike, a move that would only make the company’s financial position worse. The only example that’s been pointed out to me of a union getting a company that managed to get its labor contracts thrown out in bankruptcy then coming back to the table and working out a better deal is Wheeling-Pittsburgh Steel. And that happened only after a difficult strike, and it arguably involved much bigger concessions by the union.
As Cecil Roberts said this week:
We were able to significantly modify and improve upon what the Judge ordered in this settlement. I told Patriot management that I could not recommend that our members work under the Judge’s order, and they understood that we would not. That understanding enabled us to work out this settlement over the past months since the order came down.