Congressional - Research Service Informing the legislative debate since 1914 MEMORANDUM August 8, 2016 From: Subject: Krug-Lewis Agreement This memorandum responds to your request concerning the so-called ?Krug-Lewis Agreement,? a 1946 agreement between then Secretary of the Interior Julius A. Krug and John L. Lewis, then President of the United Mine Workers of America The Krug-Lewis Agreement provided for the creation of a mine safety code, required the presence of a mine safety committee at every mine, and provided for the establishment of a health and welfare program to benefit mine workers and their dependents.2 You asked whether the federal government has an obligation to provide either health or retirement benefits to mine workers based on the Krug-Lewis Agreement. This memorandum examines the agreement, which was effective between May 22, 1946 and June 30, 1947.3 The execution of the Krug-Lewis Agreement followed the seizure of the nation?s coal mines in 1946. In response to existing and threatened strikes by mine workers, President Truman issued Executive Order 9728, which directed the Secretary of the Interior to operate the nation?s coal mines.4 According to the order, federal control of the mines was necessary because the production of coal ?was indispensable for the continued operation of the national economy during the transition from war to The Krug-Lewis Agreement was executed eight days after the issuance of Executive Order 9728. By its own terms, the agreement covered the terms and conditions of employment for mine workers only ?for the period of Government The health and welfare program prescribed by the agreement 1 The National Bituminous Wage Agreement, commonly known as the ?Krug-Lewis Agreement,? was included in a Sept. 25, 1991, hearing conducted by the Senate Subcommittee on Medicare and Long-Term Care. See Coal Commission Report on Health Bene?ts ofRerired Coal Miners: Hearing Before fire S. Subcomm. on Medicare and Long- Term Care, 102nd Cong. 80-82 (1991). 2 The Krug-Lewis Agreement also preserved the terms and conditions of employment included in certain speci?ed agreements, such as the National Bituminous Coal Wage Agreement (dated April 11, 1945). See Krug-Lewis Agreement 1, supra note 1 3 See H. Comm. on Ways Means, 104th Cong, Development and Implementation of the Coal Industry Retiree Health Benefit Act of 1992 119 (Comm. Print 1995) (identifying the period of effectiveness for the Krug-Lewis Agreement as between May 22, 1946 and June 30, 1947); Lewis V. Jackson Squire, 86 F.Supp. 354, 356 (WD. Ark. 1949) (indicating that the period covered by the Krug-Lewis Agreement ended on June 30, 1947). 4 Exec. Order No. 9728, 11 Fed. Reg. 5593 (May 21, 1946). 5 Id. 6 Krug-Lewis Agreement, supra note 1. Congressional Research Service 7-5700 Congressional Research Service 2 would consist of three parts: (1) a welfare and retirement fund to be financed by five-cent payments on each ton of coal produced by mine operators for use or sale; (2) a medical and hospital fund that would be financed by wage deductions that were already being made and by any additional deductions authorized by the UMWA and its members for medical, hospital, and related purposes; and (3) an effort by the trustees of both funds to cooperate and coordinate in the development of policies and working agreements necessary for the effective operation of each fund.7 Notably, the agreement did not provide for federal financial contributions to either the welfare and retirement fund or the medical and hospital fund.8 In April 1947, the UMWA began negotiations with mine operators in anticipation of the mines being returned to their owners.9 A new agreement became effective on July 1, 1947, one day after operation of the mines was returned to the owners.10 The National Bituminous Coal Wage Agreement of 1947 addressed various conditions of employment for mine workers.11 The agreement also established the United Mine Workers of America Welfare and Retirement Fund (“W&R Fund”), which was modeled after the funds described in the Krug-Lewis Agreement.12 Unlike those funds, however, the W&R Fund was financed by ten-cent payments per ton of coal produced by mine operators for use or sale.13 The W&R Fund represented a merger of the two funds described in the Krug-Lewis Agreement by providing for the availability of medical, as well as retirement, benefits.14 The 1947 agreement indicated that it would supersede all existing and prior contracts except as incorporated and continued by reference.15 The agreement specified that it would carry forward and preserve the terms and conditions of the Appalachian Joint Wage Agreement, the Supplemental Six-Day Work Week Agreement, the National Bituminous Coal Wage Agreement (dated April 11, 1945), and all of the various district agreements executed between the UMWA and the various mine operators and coal associations, as they existed on March 31, 1946, subject to the terms and conditions of the 1947 agreement, and as amended, modified, or supplemented by the 1947 agreement.16 Because the Krug-Lewis Agreement did not require the federal government to provide health or retirement benefits to mine workers, and because the terms of the agreement seemed to expire once mine operators regained control of the mines, it appears unlikely that the federal government maintains any 7 Id. Trustees of the welfare and retirement fund were to make coverage and eligibility determinations, and establish benefit amounts and the methods for providing benefits. Trustees of the medical and hospital fund were to provide for the availability of medical, hospital, and related services for mine workers and their dependents. 8 Compare Krug-Lewis Agreement, with Tax Relief and Health Care Act of 2006, div. C, tit. II, subtit. B, § 212, 120 Stat. 2922, 3023 (2006) (authorizing transfer of reclamation fees collected by the Secretary of the Interior to the United Mine Workers of America Combined Benefit Fund, the United Mine Workers of America 1992 Benefit Plan, and the Multiemployer Health Benefit Plan). 9 Development and Implementation of the Coal Industry Retiree Health Benefit Act of 1992, supra note 3 at 121. 10 The National Bituminous Coal Wage Agreement of 1947 was included in hearings conducted by the Senate Committee on Banking and Currency. See Economic Power of Labor Organizations: Hearings Before the S. Comm. on Banking and Currency (Part I), 81st Cong. 427-35 (1949). 11 Nat’l Bituminous Coal Wage Agreement of 1947, supra note 10. 12 Id. See also Eastern Enterprises v. Apfel, 524 U.S. 498, 505 (1998) (describing the United Mine Workers of America Welfare and Retirement Fund as “modeled after the Krug-Lewis benefit trusts.”). 13 Nat’l Bituminous Coal Wage Agreement of 1947, supra note 10. 14 See Development and Implementation of the Coal Industry Retiree Health Benefit Act of 1992, supra note 3 at 121 (describing the United Mine Workers of America Welfare and Retirement Fund as a “merger of the two Krug-Lewis funds into a single trust”). 15 Nat’l Bituminous Coal Wage Agreement of 1947, supra note 10 at 433 (“This agreement supersedes all existing and previous contracts except as incorporated and carried forward herein by reference; and all local agreements, rules, regulations, and customs heretofore established in conflict with this agreement are hereby abolished.”). 16 Nat’l Bituminous Coal Wage Agreement of 1947, supra note 10 at 428. Congressional Research Service 3 obligation to provide such benefits pursuant to the agreement. Further, even if such an obligation had been included in the Krug-Lewis Agreement, the failure to specifically identify that obligation as one that should be carried forward and preserved might arguably cast doubt on whether the obligation should still exist.17 A review of court decisions that have discussed the Krug-Lewis Agreement has not revealed an obligation on the part of the federal government to provide health or retirement benefits pursuant to the agreement.18 While the agreement has been recognized as an expression of the federal government’s interest in making medical and other benefits available to mine workers, it does not appear to have imposed an obligation on the federal government to provide such benefits.19 17 References to the Krug-Lewis Agreement in the National Bituminous Coal Wage Agreement of 1947 are limited generally to provisions involving payments made by mine operators to the welfare and retirement fund, and the transfer of funds to the United Mine Workers of America Welfare and Retirement Fund. See Nat’l Bituminous Coal Wage Agreement of 1947, supra note 10 at 431-32. 18 See, e.g., Davon, Inc. v. Shalala, 75 F.3d 1114 (7th Cir. 1996); Lewis v. Jackson & Squire, 86 F.Supp. 354 (W.D. Ark. 1949). 19 See, e.g., Lillian M. Spiess, Paying What Was Promised: The Guarantee of Benefits Under the Coal Industry Retiree Health Benefit Act of 1992, 25 Quinnipiac L. Rev. 73, 76 (2006) (“It should be noted that the Krug-Lewis Agreement was important not only because it established a fund for miner pension and welfare benefits, but also because it exemplified the federal government’s continued commitment and involvement to investigating the availability and standard of medical programs and services available to miners and their families and ensured the delivery of these services.”).