Court ruling boosts coal plant workers’ claim for $5.5 million from FirstEnergy – By Daniel Moore (Pittsburgh Post-Gazette) / July 8 2019
A federal appeals court in Cincinnati has ruled in favor of about 230 union power plant workers in Beaver County, a decision that supports the union’s claim for $5.5 million in back wages.
FirstEnergy Solutions Corp., which is reorganizing its finances in bankruptcy, committed an unfair labor practice when it imposed a contract on the International Brotherhood of Electrical Workers Local 272 workers employed at the Bruce Mansfield coal-fired power plant in 2015, according to the ruling by a three-judge panel of the U.S. Court of Appeals for the 6th Circuit.
When talks fell apart, the company declared a bargaining impasse and began enforcing a contract that contained some provisions from its final offer — including the elimination of certain retiree health benefits — but left out other provisions considered favorable to the union — such as wage increases for workers.
The company, in multiple verbal and written offers, had directly linked wage increases as a way to offset the loss of retiree health benefits, the judges found.
The appeals court upheld a May 2018 ruling by the National Labor Relations Board, which found the promised pay raises were “explicitly contemplated” as a way “to allow employees to share in some of the cost savings brought about by the elimination of the benefits.”
At the same time, the court reversed the labor board’s decision that the company erred in subcontracting maintenance work during a routine outage, negating a potential $1.3 million in back wages.
FirstEnergy Solutions has the option to appeal the ruling to the U.S. Supreme Court. Tom Becker, a spokesman for FirstEnergy Solutions, said the company is reviewing the decision and will determine next steps once that review is complete.
Back wages, if issued, would be a rare victory for the unionized production and maintenance employees at the Bruce Mansfield coal-fired power plant along the Ohio River in Shippingport.
The 43-year-old facility — the largest coal-fired power plant in Pennsylvania — is slated to close June 1, 2021.
News of the planned closure came on top of setbacks at the plant, including a damaging fire that shut down some production in January 2018 and challenges with shipping coal waste to a new disposal site in West Virginia. The latter problem was connected to the state-mandated closure of Little Blue Run, a massive coal waste disposal site and source of groundwater contamination.
Electricity market forces ultimately dealt the biggest blow to the plant.
FirstEnergy Solutions — the competitive power generation subsidiary of Akron, Ohio-based energy conglomerate FirstEnergy Corp. — filed Chapter 11 bankruptcy last year amid pressure from a flood of cheap natural gas and renewable energy sources.
The company operates three nuclear power plants — two in Ohio and one in Pennsylvania — as well as two coal plants, including Bruce Mansfield, and two other fossil fuel plants.
‘Well-established law’
The labor dispute with IBEW Local 272 traces back to the expiration of the most recent contract in February 2013. The situation was documented as part of “Power Struggle,” a Pittsburgh Post-Gazette story on Herman Marshman, the longtime president of Local 272, and his eventual ouster.
Mr. Marshman, who was largely self-taught in labor law and had a penchant for filing labor board cases, decided to take a more aggressive approach than some union members wanted in pushing back against cuts in retiree health care.
The administrative law judge in the case eventually ruled in the union’s favor, and the company appealed to the National Labor Relations Board in Washington, D.C. The labor board, controlled at that time by two Democratic-appointed members to one Republican appointee, affirmed the decision.
Precedent was found in a similar 1992 case — cited in the appeals court’s decision — in which a Republican-controlled National Labor Relations Board found that an employer violated labor law by imposing one provision that it had linked to another in contract talks.
“This case itself is rooted in pretty well-established law,” said Daniel D. Schudroff, an employment attorney for New York City-based Jackson Lewis. “In the board’s eyes, the union has likely relied on the fact that its concessions in one area are directly tied to benefits gained in another. So, in the board’s view, to only implement the favorable portion to the employer deprives the union of notice of the change in course.”
The case also highlights the tricky situation for businesses that declare an impasse — an unusual legal maneuver in contract negotiations that can allow an employer to unilaterally implement a contract proposal.
Mr. Schudroff said he sees fewer cases of employers declaring an impasse because it is such a dramatic action that invites a challenge from the union and potentially years of litigation at the labor relations board and federal courts.
What’s next
If FirstEnergy Solutions decides to let the ruling stand, the amount of back pay owed to workers will be litigated in bankruptcy court along with other claims for payment from the company’s creditors.
Lawyers representing Local 272 filed a claim in October 2018 for $5.5 million, an amount calculated by the National Labor Relations Board through an analysis of payroll records.
“We don’t know how many cents on the dollar we will be getting from that,” said Joyce Goldstein, a labor attorney for Cleveland-based firm Goldstein Gragel LLC representing the union in the bankruptcy proceeding.
Hearings on FirstEnergy Solutions’ reorganization plan are scheduled for August.
“The court will then rule the plan of reorganization,” Ms. Goldstein said. “If that happens, then other matters will be resolved after that.”
In a statement, Vic Roppa, the current president of Local 272 who defeated Mr. Marshman in a 2017 union election, said he was confident that FirstEnergy Solutions “will clean up this previous dispute by making up these lost wages and continue moving forward with current cooperation with labor to save quality jobs and tremendous tax base for Beaver County.”
“Gas, coal and nuclear generation are all needed for affordable power for the future,” Mr. Roppa said, referencing FirstEnergy Solutions’ planned closure of the coal and nuclear plants. “Allowing gas to obtain a monopoly on power generation is a catastrophic mistake.”
Reached last week, Mr. Marshman said he had lost track of the case but was happy with the verdict. He retired from the plant on May 1.
