Getting the Shaft: The Plight of the Local Coal Miner
By Wes York
It’s no secret that the coal industry in the Tri-State, operating in what’s known as the Illinois Basin, has been hit hard in recent years by a culmination of factors, ranging from the competition of natural gas in energy production, to tougher environmental regulations enacted in Washington.
Almost everyone in the region has been impacted, either directly or indirectly, by coal production cuts and/or mine worker layoffs, which have been increasing at a steady rate since market conditions began to deteriorate. To reference one such situation affecting the industry in the region, on January 19, 2016 the Vigo Coal Company of Evansville, Indiana announced that it would be laying off 66 workers from its mines in Mt. Carmel, Illinois and Boonville, Indiana, and from its corporate office in Evansville, Indiana. In another case, as recently as February 6th, 2016 Alliance Resource Partners LP stated that it planned on laying off around 200 employees from its mine in Hamilton County, Illinois and another 75 workers from its mines in White County, Illinois. In addition, Alliance plans to cease production at the Elk Creek Mine in Kentucky in the first quarter of 2016, and lay off more miners in other locations throughout Kentucky. The layoffs continue across the heartland. Prolonged abysmal market conditions have resulted in substantial cuts in operating expenses on the part of coal producers, and the result has left many dedicated, hard working local coal miners searching for a new way to support their families.
The human toll is high, and while economically devastating, the recent layoffs are understood and accepted as one of the unfortunate ways producers weather downturns in the market and ensure that they will survive to provide the prospect of future employment to individuals and communities. What is less understood and accepted is the manner in which these miners, who have selflessly dedicated their health, and in many cases, their lives, to the coal industry have been betrayed by producers looking to protect corporate financial interests in the face of uncertainty.
The previously mentioned, Alliance Resource Partners LP has been the focus of allegations of misconduct as of late. In early March of 2016 a federal class action lawsuit was filed on behalf of former employee of Hamilton County Mine No. 1, Carl Leeper of Ziegler, Illinois, alleging that Alliance had failed to provide adequate notice to employees of the their termination, which became effective February 6, 2016. The plaintiff contends that the sudden “mass layoff†was a violation of the federal Worker Adjustment and Retraining Notification Act (WARN Act) by Alliance. Under the provisions of the WARN Act, the terminating employer must give employees a 60 day advance notice of their unemployment to allow the workers being terminated time to seek out new employment and determine eligibility for alternative health insurance programs. In fact, the class action filed on Leeper’s behalf states that Alliance officials, while aware the layoffs were imminent at the mine, knowingly denounced rumors of the layoffs when questioned by mine employees on February 2, 2016 in an effort to appease the concerns of the miners. The class action alleges that the nearly 200 plaintiffs in the lawsuit were ultimately given less than 24 hours notice of their layoff.
Furthermore, the details surrounding the terms of the layoffs are rather opaque. In Leeper’s termination notice, which was submitted with the lawsuit, the nature of the layoff was stated as temporary, however the notice also indicated that Leeper was no longer employed at the mine and that many of his benefits ended the date of his termination on February 6. The termination notice goes on further to state that Leeper could return to work at the mine on August 1, 2016 as an “at-will†employee, however the lawsuit alleges that he and other employees were told by a company manager that they would be required to reapply, undergo interviews, and that there was no guarantee of reassuming their former job, and no guarantee of employment at all. In a press release announcing the lawsuit, Leeper references an oppressive and vindictive corporate environment as his reason for filing the class action on the behalf of his fellow coworkers. “A lot of people can’t stand up to Alliance Coal because it’s no secret they would blackball us out of any future mining jobs,†he is quoted as stating in the release issued by the plaintiffs’ counsel, law firm Goldenberg, Heller, and Antognoli of Edwardsville, Illinois. “When I saw the fear in my co-worker’s eye wondering how he was going to get his young son the medical treatment he needed and what it means if he can’t, I stopped caring how big Alliance Coal is and decided I would stand up to them on behalf of Southern Illinois.â€
The next case of systemic corporate misconduct we will examine is that involving the former Squaw Creek Mine in Warrick County, Indiana, located just 7.5 miles west of Boonville, Indiana, and the Patriot Coal Corporation. Presently known as the Liberty Coal Mine and under the operations of the aforementioned Vigo Coal Company, the Squaw Creek Mine was once a joint venture owned by the Peabody Energy Company and Alcoa Inc. up until 2007 when, thanks to some creative financial engineering on the part of Peabody and Alcoa, Patriot Coal was created. Under the auspices of their union contract with Peabody Energy, miners who had worked at Squaw Creek for a period of 20 years or more were entitled to a pension and to lifetime health benefits once they reached the age of 55. The health insurance benefits extended to the miners were of extreme importance due to the extensive healthcare costs some of the miners have incurred in retirement due to respiratory problems, and in some cases, rare forms of cancer thought to be caused by exposure the toxic materials miners were subjected to while working there. However, with the creation of Patriot Coal in 2007, the 208 miners formerly employed by the joint venture would soon realize that those lifelong healthcare benefits that they had been promised by Peabody and Alcoa were in jeopardy.
In the 2007 agreement between Peabody and Alcoa, Alcoa agreed to assume the healthcare obligation of the former miners of Squaw Creek, while Peabody transferred what remained of its joint venture with Alcoa to Heritage Coal, a subsidiary of the entity founded by Peabody in October of 2007, Patriot Coal. Over the course of the next five years, Peabody would begin the process of burdening Patriot Coal with a slew of massive liabilities, including about 40 percent of its total overall healthcare liabilities owed to miners throughout the company, until in 2013 Patriot collapsed under massive debt and filed for Chapter 11 bankruptcy. In the process of restructuring Patriot’s debt, it reached an agreement with the mine workers union to reassume the prior healthcare obligations it owed to Peabody’s 11,000 retirees, with Patriot committing $310 million to that cause (keep in mind the Squaw Creek obligations were still being paid by Alcoa). Patriot also received an undisclosed investment stake from a New York based hedge fund known as Knighthead Capital Management during the 2013 Chapter 11 proceedings.
Ultimately, the efforts to keep Patriot solvent proved futile, and again in May of 2015 it filed for bankruptcy. This time, however, Patriot had no interest in renegotiating the healthcare benefits it had promised to the Squaw Creek retirees. During the 2015 bankruptcy proceedings, Patriot reached an agreement with Alcoa to receive a $22 million payment from the former Squaw Creek partner, of which the majority would be allocated to paying the legal fees incurred during its second bankruptcy. Of the $22 million, only $4 million would be allocated to retiree benefits. Under the agreement reached by the two former partners of the Squaw Creek Mine, the healthcare obligations owed to the former employees of the Squaw Creek Mine would be added to the larger pool of retirees covered under the 2013 agreement between Patriot and the United Mine Workers union.
The former workers in that pool currently receive health insurance from the union supervised Voluntary Employee Beneficiary Association, but the $4 million contributed by Patriot to the fund will only cover about 18 months worth of benefits for the 208 Squaw Creek miners. Furthermore, the already stressed fund is expected to be completely depleted in less than 10 years, offering little reassurance to the former miners that the benefits they were promised by Peabody Energy are safe.
Both of the aforementioned cases exemplify corporate greed and shed light on the exploitation that coal miners have endured since the birth of the coal industry in America. While it can be argued that operating a commodity based business, or any business for that matter, in a free market society sometimes warrants drastic measures to ensure the survival of said business when market conditions deteriorate, the tactics of the corporations in these cases, and the disregard with which they have treated their employees, is void of dignity, and morally reprehensible. Coal miners risk their lives and health on a daily basis to ensure that their families are provided for, and to ensure that America has an affordable source of power. In the tri-state region they are more than just another time card, they are our fathers, mothers, sons, daughters, sisters, and brothers. We cannot allow this inhumane treatment to be accepted in any sector of corporate America, or eventually we will all be subjugated to it.
FOOTNOTE: This letter was posted without opinion, bias or editing.
Why is our health insurance so closely linked to our employment.
It shouldn’t be, and won’t be once Medicare for All is instituted.
Really? You think the government that created the mess we have will solve it? Maybe you need the government to take your money and spend it for you, but I think the government owning your health care will be worse than your employerowning it.
The bad, bad, bad, horrific government created Medicare enoch and runs it at 3% overhead compared to the private sectors’ 30%.
Medicare has a 72% approval rating among its’ users so yes, I’d rather have (when it comes to health care) the government running it before private insurance companies.
It actually when it comes to health care doesn’t make any sense to me why there should be a middle man making money off it when that profit has such a moral obligation attached to it.
Since you’ll be hard pressed to find this in the news, ObamaCare lengthened the longevity of Medicare by 10 years and has a lot of different ideas in it to try to bring down health care inflation. That’s why we have so many Republican doctors in congress now whose sole purpose of being there is to keep that from happening.
I received my homeowners premium last year and it stated since my home was 11 years old, my insurance would not pay the amount they would have the year before because my roof was getting older. They also said my premium was going up $125 dollars more.
OK, no problem. Just don’t pull the same crap when it comes to health care because a roof isn’t the same as contracting cancer.
What say enoch?….
To corporate thugs, your life is meaningless. Welcome to the US oligarchy.
The coal bosses are running true to form, it’s never been any different with these folks throughout history. Any pleas to them based on humaninty, or any form of virtue, will fall on deaf ears. They are set up to reap the benefits during the good times and slide out from under any responsibility when things go south. The only thing odd about it is that those miners who risk their lives daily would think the producers would treat them with any dignity, actually care about their families and healthcare, once the bottom line demands a shut down. The realization that the companies (people in the eyes of the Supreme Court) currently care just as much as they ever did about their employees and former employees is a hard truth to face, probably especially so with those who have lost loved ones and friends underground.
It is really sad in these cases, probably more so than with other industries. Miners are often beset by diseases peculiar to their occupation and require sustained access to healthcare and the ability to pay for it. At closing time the downstream effect on supporting businesses is every bit as much on their radar as the well-being of their former employees and their families, which is to say not at all. Getting any crumbs from them will be like pulling teeth. At the end of the day, when the job is finally over, the last 40 years or so of service in a filthy industry will be distilled to sterile words filed and heard in the flourescent oven of a courtroom. There will be a bone tossed here and there, a sop given up in a few of the most monstrous cases, but…when they’re done, they’re done.
Great letter, Mr. York. This is a story of union-busting at it’s lowest, and it turns my stomach.
“This weekend marks the anniversary of the most brutal confrontation in the history of the American labor movement, the Battle of Blair Mountain. For one week during 1921, armed, striking coal miners battled scabs, a private militia, police officers and the US Army. 100 people died, 1,000 were arrested, and one million shots were fired. It was the largest armed rebellion in America since the Civil War.
This is how it happened. In the Twenties, West Virginia coal miners lived in “company towns.” The mining companies owned all the property. They literally ran union organizers out of town – or killed them.
In 1912, in a strike at Paint Creek, the mining company forced the striking miners and their families out of their homes, to live in tents. Then they sent armed goons into that tent city, and opened fire on men, women and children there with a machine gun.
By 1920, the United Mine Workers had organized the northern mines in West Virginia, but they were barred from the southern mines. When southern miners tried to join the union, they were fired and evicted. To show who was boss, one mining company tried to place machine guns on the roofs of buildings in town.
In Matewan, when the coal company goons came to town to take it upon themselves to enforce eviction notices, the mayor and the sheriff asked them to leave. The goons refused. Incredibly, the goons tried to arrest the sheriff, Sheriff Hatfield. Shots were fired, and the mayor and nine others were killed. But the company goons had to flee.
The government sided with the coal companies, and put Sheriff Hatfield on trial for murder. The jury acquitted him. Then they put the sheriff on trial for supposedly dynamiting a non-union mine. As the sheriff walked up the courthouse steps to stand trial again, unarmed, company goons shot him in cold blood. In front of his wife.
This led to open confrontations between miners on one hand, and police and company goons on the other. 13,000 armed miners assembled, and marched on the southern mines in Logan and Mingo Counties. They confronted a private militia of 2,000, hired by the coal companies.
President Harding was informed. He threatened to send in troops and even bombers to break the union. Many miners turned back, but then company goons started killing unarmed union men, and some armed miners pushed on. The militia attacked armed miners, and the coal companies hired airplanes to drop bombs on them. The US Army Air Force, as it was known then, observed the miners’ positions from overhead, and passed that information on to the coal companies.
The miners actually broke through the militia’s defensive perimeter, but after five days, the US Army intervened, and the miners stood down. By that time, 100 people were dead. Almost a thousand miners then were indicted for murder and treason. No one on the side of the coal companies was ever held accountable.
The Battle of Blair Mountain showed that the miners could not defeat the coal companies and the government in battle. But then something interesting happened: the miners defeated the coal companies and the government at the ballot box. In 1925, convicted miners were paroled. In 1932, Democrats won both the State House and the White House. In 1935, President Roosevelt signed the National Labor Relations Act. Eleven years after the Battle of Blair Mountain, the United Mine Workers organized the southern coal fields in West Virginia.
The Battle of Blair Mountain did not have a happy ending for Sheriff Hatfield, or his wife, or the 100 men, women and children who died, or the hundreds who were injured, or the thousands who lost their jobs. But it did have a happy ending for the right to organize, and the middle class, and America.
Now let me ask you one thing: had you ever heard of this landmark event in American history, the Battle of Blair Mountain, before you read this? And if not, then why not? Think about that. “
Yeah, but union members are just “greedy thugs” according to Trump’s “poorly educated” goons on this site like IE and JoeBiden.
Thanks for the mention EB. Today’s date is 3/14/2016. Unions today have about as much of connection to Blair mountain as the Black panthers do to the under ground railroad. Both dishonor their heritage.
If unions had their members’ best interest in mind they would have not sold them to the party that is bent on destroying their industry. A coal miner voting for democrats is like a chicken voting for Col. Sanders.
As a footnote, there was a UMWA sponsored bill that would have lumped the Squaw Creek retirees into a more comprehensive benefit fund aimed at securing healthcare benefits and pensions for a substantial number of retired coal miners nationwide. However, Senate Majority Leader Mitch McConnell (R-KY) failed to bring it to the floor of Congress for a vote earlier this year. Coincidentally, Senator McConnell also receives a large amount of campaign financing from big coal producers. The writing is on the wall. Thank you all for the comments.
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