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Patriot's rejecting its union contract was legal but wrong

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A promise is a promise. While a federal court judge recently ruled Patriot Coal has the authority to reject its collective bargaining agreement and modify retiree benefits, we think this sets a bad precedent.

Patriot Coal was formed as a spinoff of Peabody Energy. Patriot declared bankruptcy, claiming it could no longer afford $1.6 billion worker and retiree commitments. By wiping out Patriot's pension and health benefits, an estimated 10,000 retired West Virginia and Kentucky miners, plus 13,000 dependents, have been hit. The United Mine Workers of America alleged that the company did so to intentionally escape contracts negotiated with workers, but the judge sided with the company.

It's possible the union's requests were too much, but that is immaterial. The company agreed to its demands and should have lived up to its end of the deal. Those contracts were signed in good faith. Patriot's financial problems are lamentable; however, the company said it was going to do something and it should have done it.

This case is likely not over. We hope everyone can get back to the bargaining table and hammer out a compromise everyone can live with and both sides can uphold.