CONSOL Energy Sued Again Over Retiree Health-Care Cuts

Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...

By Carmen Castro-Pagan

CONSOL Energy Inc. and its subsidiaries are accused of violating federal law by terminating health-care coverage to at least 900 nonunion retirees and their dependents ( Casey v. CONSOL Energy, Inc. , S.D. W.Va., No. 1:17-cv-03861, complaint filed 8/23/17 ).

CONSOL concealed the terms of its retirement and health-care plans and made “regular, repeated, and material misrepresentations” about the lifetime nature of benefits available to nonunion supervisors and hourly employees, according to a lawsuit filed Aug. 23 in federal court in West Virginia.

The alleged misrepresentations included printed material, slide shows, and oral presentations that their retirement package—which included medical, prescription drug, vision, dental, and life insurance—was for life. This was done to get those individuals to accept lower wages, reject unionization, continue working for the company, and get those employees to retire earlier than they otherwise might have, the lawsuit says.

This is the second lawsuit challenging CONSOL’s termination of lifetime health-care benefits to nonunion retirees in the past year. Records maintained by the Labor Department show that as many as 12,000 miners lost their health-care coverage as a result of CONSOL’s 2014-2015 plan termination, according to court documents.

When CONSOL announced the termination, it allowed active employees who were eligible for lifetime benefits to choose between two options: Retire and continue receiving the same benefits for five years or continue working and receive a lump-sum payout instead of future benefits. The payout ranged from $25,000 to $50,000 depending on the years of service. This alternative wasn’t made available to retirees when their benefits were canceled, the lawsuit alleges.

Health-care costs during retirement can be very expensive. A 65-year-old couple retiring this year will need an average of $275,000 to cover medical expenses throughout retirement, according to the latest estimate from Fidelity Benefits Consulting.

Retirees across the nation have sued a number of companies for allegedly breaking their promise to offer lifetime health-care benefits. Several major companies have successfully defended these challenges, with judges ruling in favor of Johnson Controls, BorgWarner Inc., Moen Inc., and Weyerhaeuser Co.

CONSOL is one of the largest coal mining companies in the country, along with Peabody Energy and Arch Coal, according to Bloomberg Terminal company data. In addition to West Virginia, the company has U.S. operations in Kentucky, Ohio, Pennsylvania, Tennessee, Utah, and Virginia. In 2015, the company’s net revenue decreased by 16 percent and it posted a net loss of $374.89 million. The company has 2,331 employees, according to its website.

CONSOL didn’t immediately respond to Bloomberg BNA’s request for comments.

Mountain State Justice Inc. represents the retirees.

To contact the reporter on this story: Carmen Castro-Pagan in Washington at

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

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