The Register-Herald, Beckley, West Virginia

Latest News

September 28, 2013

Benefits suit dismissed against Arch, Peabody

CHARLESTON — A federal judge has dismissed a lawsuit seeking to preserve benefits for bankrupt Patriot Coal Corp.’s active and retired miners.

U.S. District Judge Joseph Goodwin on Friday sided with St. Louis-based Peabody Energy and Arch Coal.

The class-action lawsuit was filed last year on behalf of the United Mine Workers of America and eight active and retired miners.

The lawsuit claimed the companies set up spinoff companies to rid themselves of their benefits obligations. It argued the companies were still responsible for those benefits under the federal Employee Retirement and Income Securities Act.

But Goodwin ruled the law doesn’t protect a pension fund’s financial stability.

UMW President Cecil Roberts told The Charleston Gazette the union plans to appeal.

“We believe the decision fails to recognize the purpose of ERISA, which is to protect the benefits employees have earned,” Roberts said. “Our members who are at risk of losing the retiree health care benefits Peabody and Arch promised them clearly earned those benefits. We will continue to fight for them in every possible venue until those benefits are secure.”

Peabody spun off Patriot in 2007, and Patriot later acquired mines that Arch spun off into Magnum Coal. Patriot declared bankruptcy last year.

Last month, UMW members ratified a settlement with Patriot that would restore most wage cuts that Patriot had sought as part of its reorganization. It also reduces the restoration of some benefits and the continuation of others. Pension benefits for thousands of current retirees would be maintained, and active employees would continue earning pension credit.

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