Bankruptcy Judge Kathy Surratt-States ruled yesterday that Patriot Coal Corp. can reject collective bargaining agreements, cease pension contributions and convert retiree health care to an outside fund as part of its plan to save $150 million a year in labor costs, Reuters reported yesterday. "There is likely some responsibility to be absorbed for demanding benefits that the employer cannot realistically fund in perpetuity," Judge Surratt-States wrote her opinion. The United Mine Workers of America, which represents 1,700 current Patriot workers and 13,000 retirees and their relatives, vowed to appeal the ruling. The union has planned a public rally for June 4 in Henderson, Kentucky. Patriot's current proposal would cease pension contributions and convert health care to a voluntary employees' beneficiary association (VEBA) funded by $15 million in up-front cash and $300 million in profit-sharing contributions. The union would receive a 35 percent equity stake in post-bankruptcy Patriot, which it could sell to help fund the VEBA. The company's proposal would also reduce wages and decrease paid time-off.
