By Christen Smith
A federal judge approved FirstEnergy Solutions’ reorganization plan last week after the company reached a settlement with workers at its Perry and Beaver Valley nuclear plants to preserve union contracts post-bankruptcy.
According to documents filed in the U.S Bankruptcy Court in Akron, Ohio, FES will keep pensions for existing employees as detailed in collective bargaining agreements with the Utility Workers Union of America and the International Brotherhood of Electrical Workers. The deal calls off the utility’s original plan to renegotiate the unions’ contracts and transfer employees into a 401(k) retirement fund after claiming the company could no longer afford pensions. (See FES Seeks Bankruptcy, DOE Emergency Order and Labor Dispute Stalls FES Reorganization.)
“This is a remarkable victory for workers and unions,” Joyce Goldstein, attorney for both unions, told RTO Insider in an email on Monday. “The agreement reached between the debtors and the unions means that the workers do not lose a penny on their pensions, their wages or any other benefits.”
The news comes six weeks after Judge Alan M. Koschik told lawyers for FES he could not approve its reorganization plan — which included shedding $3.6 billion in debt, cutting ties with former parent company FirstEnergy Corp. and possibly changing its name — until the issue was resolved.
“This is a landmark day in the history of our company,” FES CEO John W. Judge said in a statement Tuesday. “We are now in a position to successfully conclude the Chapter 11 process and will emerge from the restructuring as a fully independent energy company well-positioned to continue serving the needs of our 800,000 customers.”
Judge said more than 93% of creditors approved the restructuring plan, keeping the company on track to exit bankruptcy proceedings before year’s end.
FES also agreed to pay $400,000 in attorneys’ fees for the unions. FES attorney Lisa Beckerman told the court last week without Goldstein’s advice “it would have been very difficult to resolve the complex legal and contractual issues regarding the modifications to the collective bargaining agreements.”
“You know, we feel that it took a long time, but we’re happy that we were able to ultimately reach a deal with our workforce,” she said.
Goldstein described the resolution as a “national success story” in line with strikes organized by teachers and Marriott employees within the last year. In the latter case, 8,000 service workers from Marriot hotels in eight cities walked off the job until the company ratified a new contract in December including pay raises and enhanced security measures to prevent sexual harassment and assault.
“So many workers and retirees — in the airline industry, the auto industry, the steel industry, to name just a few — have lost their pensions through bankruptcy over the last couple of decades,” Goldstein said. “Here, we preserved everything.”