Steelworkers dismiss Esmark's claims that they violated labor laws in discussions with Essar, Severstal

By Lisa Kerner

Charlotte, N.C., June 12 - The United Steelworkers (USW) denied claims by Esmark Inc. that the union violated federal labor law in regard to discussions the union has had with Essar Steel Holdings, Ltd. and OAO Severstal, both of which are bidding for Esmark.

According to a USW news release, Esmark refused to provide necessary information to enforce the contractual obligations that protect its members in the event of a proposed sale.

USW maintains that Esmark violated contractual protections by entering into the agreement with Essar Steel and closing on related financing without appropriately notifying the union.

"Without the hard work and sacrifices of USW members through many years, there would not even be a company to sell," the union statement said.

On June 11, Esmark subsidiary Wheeling-Pittsburgh Steel Corp. filed a charge under the National Labor Relations Act against the USW alleging multiple violations of federal labor law in connection with the union's attempts to block the proposed acquisition of Esmark by Essar Steel.

Esmark president Craig Bouchard stated in a prior news release that the company does not believe the successorship provisions of the collective bargaining agreement apply to the proposed Essar Steel transaction.

Essar Steel announced on Wednesday that as part of its increased offer for Esmark of $19 per share, it is prepared to recognize the United Steelworkers, assume the basic labor agreement and negotiate a new collective bargaining agreement on an expedited basis.

It was previously reported that while Essar Steel and Severstal both initially offered $17 per share for the Wheeling, W.Va., steel producer, the union supported the Severstal deal and rejected Essar Steel's offer.

Essar is a flat carbon steel manufacturer based in Essar, India.

Severstal is a Moscow-based metals and mining company.

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