An executive with the United Steelworkers said the union plans to appeal a decision to dismiss its unfair labor practices complaint against Chesapeake Energy Corp.'s eastern operations.

John Knauff said the union is extremely disappointed in the decision to dismiss the union's charges against Chesapeake. Gary Muffley, regional director of the National Labor Relations Board's Cincinnati office, made the decision. Knauff is the international union representative for the 143 Chesapeake employees in southern West Virginia and eastern Kentucky involved in the labor dispute.

Chesapeake's contract with Steelworkers Locals 628 and 372 expired Dec. 1, 2006. The company made a final contract offer on May 4, 2007. The members of the locals rejected the offer last December.

The company declared an impasse in negotiations with the union's Negotiating Committee and, on Feb. 1, implemented the terms of its offer. That sparked the union's unfair labor practices complaint.

But Muffley informed the steelworkers in a May 30 letter that an investigation disclosed that the parties had reached a valid impasse after having met for 43 negotiating sessions between Oct. 27, 2006, and Jan. 16, 2008.

Muffley said that although the parties had reached agreement on a substantial number of issues, "the parties still remained apart on mandatory items such as wages, pensions, disability plans, holidays, vacations, job restructuring, workers compensation, funeral leave and retiree medical and life insurance supplements."

Muffley said that after a valid impasse was reached, Chesapeake was free to implement its final offer. Muffley concluded that further proceedings were not warranted and he declined to issue a complaint.

Mike John, vice president of operations for Chesapeake Appalachia, said in a prepared statement that the company was pleased Muffley "concluded that our lengthy negotiations with the union were conducted in a fair manner."
"While we expect the union to appeal the ruling, we believe this decision allows us to move forward and work together with our employees to focus on our business of producing clean-burning natural gas," John said, adding, "We value the work all of our employees do every day and are proud to have them on the Chesapeake team."

Knauff said Monday, "Obviously we're going to appeal. We're extremely disappointed in the regional director. We thought we had an extremely strong case.

"This is unprecedented," Knauff said. "We filed those charges in early March and gave our evidence. The investigator said she would take it to the director on April 30. Usually if they think your case is weak or has problems, they'll be talking with you within a week. They didn't talk to us until the day they told us they were going to dismiss. That is unheard of. The logical conclusion you would draw is, they were going to issue a complaint and they were working on a plea bargain with the company. You figure that if they aren't talking to the complainant they're talking to the defendant. We were absolutely shocked at this decision and we're going to appeal it."

Knauff said that in most negotiations, "we usually get a contract we can live with. The bad part of this is, Chesapeake doesn't seem to understand you've got to have two sides to get an agreement. They still don't have labor peace. It's all over their insistence on having concessions. They want these guys to give up stuff they've had over 20, 30 years. They won't have labor peace until they have a labor agreement and they can't get that until they sit down and bargain with us.

"We are as shocked by this decision as Aubrey McClendon was about the loss of his lawsuit," Knauff said. "I'm sure we feel just as strongly as he does that we're right."

Knauff was referring to the West Virginia Supreme Court's May 23 decision not to hear Chesapeake's appeal of a $404 million Roane County jury verdict.

The union has until Friday to appeal Muffley's decision. Knauff said the union will probably seek an extension of the deadline.