Westmoreland asks court for permission to cut contracts with Kemmerer union miners

FILE PHOTOS

Left: Kemmerer coal miners and United Mine Workers of America leadership packed the Event Center on April 20, 2018, to hear contract negotiations between UMWA and Westmoreland leadership. The collective bargaining agreement that was negotiated at this meeting is the subject of Westmoreland’s recent petition to a bankruptcy judge. Right: The Kemmerer mine has been unionized for more than a century. 

UPDATE: The hearing on this order has been moved to Feb. 13, in Houston, Texas. 

Last week, Westmoreland Coal Co. filed a document in bankruptcy court asking the judge for authority to end its collective bargaining agreements with the United Mine Workers of America (UMWA), calling the financial obligations “burdensome legacy liabilities.” 

The court filing is a formality that has been expected since October (shortly after the company declared bankruptcy and filed for Chapter 11 relief) when Westmoreland sent a letter to the union stating that the company would be seeking an amendment to the collective bargaining agreement, but wanted to cooperate with the union on the changes.

Westmoreland lawyers argue in the filing that no potential buyer has wanted to purchase the Kemmerer mine if it is attached to the Kemmerer collective bargaining agreement or the retiree benefits. Westmoreland said the obligations to retirees, including a pension plan and an “extremely generous medical plan” for active union employees is something no buyer wanted to take on.

They said the debtors “had no choice” but to terminate the agreements and the benefits, otherwise the company would be forced to liquidate.

Westmoreland currently has more than $1 billion in debt. If the judge approves this latest petition, the company would no longer be responsible for approximately $100 million in retiree obligations to miners from the Kemmerer and Beulah mines. The coal company has also informed the bankruptcy court that it hopes to close the sale of the Kemmerer mine by the end of February.

The collective bargaining agreements with the Kemmerer mine and the Beulah Mine in North Dakota are the only ones that Westmoreland has issue with. It says the agreements with workers and International Union of Operating Engineers at its other mines are “more affordable and market-based.”

Terminating the collective bargaining agreements would also remove successorship language, in which a company that buys the Kemmerer mine would be responsible for the retiree benefits.

That doesn’t necessarily mean that a new mine owner couldn’t decide to revive some form of a collective bargaining agreement with the union and its workers, but at this point Westmoreland said any potential buyers were not interested in the purchase if it included the successorship language.

“The Debtors would prefer that they had sufficient funds to pay the Retiree Benefits. They do not,” the filing stated, adding that an interested buyer for the mine has agreed to provide $6 million to go to retirees (mainly associated with the union) who are not covered by the Coal Act.

Westmoreland said this petition is for the court to grant authority to terminate the agreements, but they would still like to bargain with the UMWA to prevent their termination.

The coal company said they have negotiated in good faith with the UMWA and fulfilled requests to provide extensive financial information about the company to the union, adding that the UMWA has not submitted any formal counterproposals.

The two groups had several in-person or telephonic bargaining sessions, but the union continues to object to any move by the coal company that would slash retiree benefits.

Similar coal company bankruptcy cases have resulted in the court allowing the companies to terminate agreements and stop paying retiree benefits despite union objections.

In a late November interview with the Gazette, Mike Dalpiaz, District 22 Vice President of the United Mine Workers of America, said one of the reasons the union was fighting so hard against Westmoreland’s petitions is that the bankruptcy courts had a history of siding with the corporations to promote financial restructuring over obligations to workers.

“Bankruptcy laws in the U.S. are tainted against people and instead favor the corporations,” Dalpiaz said. “We know we need management, but not management that doesn’t have a damn clue what they’re doing. Miners in Wyoming and other places deserve better than that.”

In the court document, Westmoreland reminds the judge that the coal industry has been “troubled” for several years, and that the company has been able to stave off bankruptcy for far longer than its competitors.

In May, Westmoreland secured $110 million in financing, a move that they say prevented a free-fall bankruptcy that could have forced the coal company to stop operations and liquidate.

The court document states that the combination of the coal industry and the “current customer mix” at the Kemmerer mine are forcing Westmoreland’s hand in terminating the agreements.

The company said it will elaborate on the “specific risks at Kemmerer” at a Feb. 4 Feb. 13 hearing on this latest motion, when both the company and the union will have a chance to argue for its approval or rejection.

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