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UMWA members hear Patriot settlement details prior to Friday vote

August 14, 2013
For immediate release?: 

[CHARLESTON, W.VA.] Nearly 2,000 active and retired members of the United Mine Workers of America (UMWA) gathered here and in Evansville, Ind., to hear the details of the settlement the union reached last Friday with Patriot Coal. International President Cecil E. Roberts made the presentation in Charleston, and International Secretary Treasurer Dan Kane led the discussion in Evansville.

Members heard the particulars of the provisions the union negotiated that are significant improvements over what federal Bankruptcy Judge Kathy Surratt-States ordered on May 29, 2013. 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.

“We were able to significantly modify and improve upon what the Judge ordered in this settlement,” Roberts said. “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.

“This is a day and a document that I believe Peabody Energy never thought would come,” Roberts said. “When they devised the scheme to spin off Patriot and dump all Peabody’s legacy liabilities – along with some significantly underwater coal supply contracts – Peabody executives had to know they were setting up Patriot up to fail. They thought it was only a matter of time until Patriot was a goner.

“But they were wrong,” Roberts said. “They didn’t count on our willingness to fight back, do whatever it took to preserve the benefits our retirees earned, and keep our members working at jobs worth having. And I believe that current Patriot management – which is no longer dominated by former Peabody executives – truly wants this company to survive and were willing to work with us to make that happen.”

The ratification vote will be held on Friday, Aug. 16, at the various Patriot subsidiary workplaces in West Virginia and Kentucky. Local union tellers will count the ballots and report the results to the UMWA International Auditor/Tellers, who will compile the total vote and announce the results Friday evening.

The video shown to the membership in today’s meetings is available here:

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