Chesapeake Workers to Vote on Contract

By Paul J. Nyden

pjnyden@wvgazette.com The United Steelworkers of America have been in negotiations with Chesapeake Energy Corp. since October 2006, shortly before the unions labor contract expired Dec. 1. After continued negotiations showed no progress Friday, the union announced plans to have its members vote on Chesapeakes final proposal during the first week in December. About 160 gas well workers in West Virginia and Eastern Kentucky are covered under the labor agreement. We have been in contract negotiations for a year, but not much has changed in their offer since May 4, said union negotiator Charlie Armstead. Chesapeake doesnt mind throwing money at anybody or anything except their employees. Chesapeake officials say theyve made a sound offer that workers should vote on. We made them a final offer on May 4 [and] we think that final offer is fair and equitable, said Scott Rotruck, Chesapeake vice president and spokesman. It was the result of hard work by all the people around the [negotiating] table. … We think it is great that their membership and our employees will get a right to vote on the contract. Federal mediators asked Rotruck not to debate contract issues in public, he said. We will honor that request, he said. Armstead said the two parties disagreed on several issues, including pensions, retiree health care, short-term disability benefits, bereavement leave, vacations, sick leave and seniority provisions for job bidding. The list goes on and on, he said. Wages are an issue, but a minor issue at this point. Both sides chose to work with a mediator. Today, Oklahoma City, Okla.-based Chesapeake is the nations third-largest natural gas owner, behind ExxonMobil and ConocoPhillips. In January, a Roane County jury handed down a $405 million verdict against it and other parties after determining that it and its predecessor companies underpaid gas royalty owners over the years by $134 million. The verdict included $271 million in punitive damages, payable to nearly 9,000 plaintiffs, which include 150 businesses and major landholding companies, such as Cotiga Land Co., Dingess-Rum Properties and Horse Creek Coal Land Co. The jury found that underpayments began when the gas reserves belonged to NiSource Inc. and Columbia Energy Group, a subsidiary of the Columbia Natural Resources LLC. Those reserves were acquired by Chesapeake in October 2005. When they lost the suit in Roane County, they threatened to sit on the wells for 20 years, Armstead said. They paid $3.3 billion for the gas here. The Steelworkers, Armstead said, negotiated good labor contracts with previous gas owners for more than 50 years, including United Fuel and Gas, Columbia Gas, Triana Energy and NiSource. We have people who have 30 to 35 years service with those companies, he said. They paid for pensions and health care all these years. Personally, I have been in contract negotiations with these companies for nearly 30 years. The two local unions involved in contract talks are Local 628 in Charleston, which covers workers from Charleston and Hamlin, north to Buckhannon; and Local 372 in Kenova, which covers workers in areas near Huntington, Logan and Williamson, as well as in Prestonsburg and Inez, Ky. On Friday, Armstead said the union felt it was time to give the 160 gas drilling and production workers in those locals a chance to vote, after contract negotiations failed to succeed over more than a year. We dont think the proposed contract has any hope of passing, he said. We definitely dont recommend it. But the company seems to have it in their head that the membership will pass it. Chesapeake is taking a stance that none of its predecessors had, said John Knauff, a Steelworkers international representative. Chesapeake has placed regressive contract provisions on the table countering things we have had in place for years, Knauff said. None of the previous owners wanted that kind of regression. Chesapeake is the only company that has demanded those things.

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