CONSOL Energy Sued Over Benefit Cuts to Retired Coal Miners

Pension & Benefits Daily™ covers all major legislative, regulatory, legal, and industry developments in the area of employee benefits every business day, focusing on actions by Congress,...

By Carmen Castro-Pagan

Oct. 20 — Nonunion retired coal miners are accusing CONSOL Energy Inc. and its subsidiaries of violating ERISA by terminating their lifetime health-care benefits, according to a proposed class action ( Fitzwater v. CONSOL Energy, Inc. , S.D. W.Va., No. 2:16-cv-09849, complaint filed 10/17/16 ).

The lawsuit, filed Oct. 17 in a federal court in West Virginia, seeks class treatment for at least 2,000 nonunion retirees whose benefits were reduced or terminated between 2014 and 2015. The energy company “fraudulently misrepresented the terms, eligibility requirements, and rights and obligations” in their plan to the detriment of retirees who rejected unionization, accepted lower wages and continued working for CONSOL in reliance of its promise of lifetime benefits, the complaint said.

The lawsuit is noteworthy because it was filed by nonunion retirees. Usually these lawsuits are filed by retirees challenging the company’s termination of collectively bargained lifetime health benefits. CONSOL’s representations of lifetime benefits were intended to induce the retirees not to form a union with the United Mine Workers of America at the company’s operations, according to the lawsuit.

Coal mining companies have struggled in recent years with industry giants, including Peabody Energy, Patriot Coal and Arch Coal filing for bankruptcy. Thousands of union-represented retirees have been affected by these actions, and many of them have seen adjustments to their health benefits.

Class Allegations Against CONSOL

The retirees allege that they weren’t provided with a copy of the summary plan description that outlined their retirement benefits until after they became eligible for retirement. It was then that they found out that CONSOL reserved the right to terminate the plan at any time contrary to the representations made by the company regarding lifetime benefits, the complaint said.

The retirees seek to enjoin CONSOL from terminating or withholding health benefits promised to retired employees and from discriminating against them on the basis of health status.

The retirees take issue with CONSOL’s decision not to offer retired employees the opportunity to accept certain lump-sum payouts that were offered to other workers when the benefits were canceled.

As many as 12,000 retired employees were affected by CONSOL’s “unlawful” termination of benefits, according to the lawsuit.

The retirees seek multiple remedies under the Employee Retirement Income Security Act, including an order compelling CONSOL to restore the $2,500 in annual health-care spending funds to which the retirees were entitled in each year after the termination of benefits.

CONSOL doesn’t comment on pending litigation, a company spokesman told Bloomberg BNA Oct. 17.

Mountain State Justice Inc. represents the retirees.

To contact the reporter on this story: Carmen Castro-Pagan in Washington at ccastro-pagan@bna.com

To contact the editor responsible for this story: Jo-el J. Meyer at jmeyer@bna.com

Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.