Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...
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 email@example.com
To contact the editor responsible for this story: Jo-el J. Meyer at firstname.lastname@example.org
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)