By: Neal Goturi ‘29
Volume XI – Issue I – Fall 2025
I. INTRODUCTION: COAL PLANT CLOSURES AND THE CHALLENGE OF A JUST TRANSITION
The structural decline of coal power plants across the United States risks harming the workers who rely on the industry for employment and economic welfare. Although existing federal and state labor and employment statutes attempt to protect workers' livelihood through early notification and collective bargaining requirements for employers, economic challenges, narrow bargaining subjects, and preemption objections make existing law unlikely to provide redress for affected workers. As such, I argue the solution to this problem lies outside the constraints of labor law and within the fiduciary duties that guide corporate governance itself.
Fiduciary duty refers to the legal obligations among a corporation, its agents, and shareholders. This essay will articulate the principles of fiduciary duty and demonstrate how current board practice during plant closures does not capture the full architecture of the doctrine, as directors primarily interpret the duty of loyalty as a negative mandate to avoid conflicts of interest and minimize short-term costs. This perspective overlooks the duty of loyalty’s positive obligations, which require directors to take affirmative steps to durably and prudently maximize shareholder value.
In the unique circumstances of a burgeoning clean energy economy facing chronic labor shortages, this affirmative obligation warrants a newfound consideration of workforce transition and retraining programs during plant closures and the creation of monitoring programs for workforce development. Given that nearly all major energy companies operate or plan to operate diversified generation portfolios, such informed consideration is neither irrational nor extraneous, and the outcome of the consideration provides robust protection from judicial scrutiny. The informed consideration of workforce transition has numerous positive effects for both shareholder value and worker livelihood, creating a more productive, resilient, and cooperative economy.
II. THE DECLINE OF COAL POWER
I admit to focusing on coal power, and I do so for good reason. Unlike other fossil-fuel-based electricity generation sources, which are increasing their production capabilities rapidly, [1] coal-fired power plants are being phased out across the United States; more than half of America’s coal plants have closed already. [2] This transition reflects a combination of market and political pressures that have rendered coal generation economically unsustainable, politically disfavored, and unlikely to regain market share. These closures advance ambitious environmental and clean energy goals, but also create significant economic and social harm for workers and their communities.
i. Market Pressures and Political Winds Against Coal
From a market standpoint, coal plants have become increasingly costly to operate. Rising maintenance and fuel costs, coupled with declining electricity prices and the growing affordability of nuclear and renewable energy generation, have sharply reduced the profitability of coal power facilities. [3] Coal power was 28% more expensive in 2024 than in 2021. [4] Public-scale solar photovoltaic power (PV) was also 56% cheaper than coal in 2023. [5] Many plant operators have voluntarily committed to closure, while others have been forced to close due to sustained financial losses. [6] As a result of these frequent closures, the Trump Administration has attempted to revitalize the coal power industry by directing relevant agencies to “identify coal resources on Federal lands, lift barriers to coal mining, and prioritize coal leasing on those lands.” [7] Although these policies may temporarily bolster coal sales in select regions, the industry's overall trajectory remains one of accelerated decline. [8] Even in areas historically dependent on coal, plants are closing years ahead of initial projections, and few new investments are being made in the sector. [9]
Political developments have further reinforced this trend of plant closures. 38 states, the District of Columbia, and Puerto Rico have adopted binding clean energy standards requiring utilities to procure an increasing share of power from renewable or zero-emission sources. [10] These measures have created structural disincentives for continued coal operation and, in many jurisdictions, effectively mandate a complete phaseout of coal generation within the next two decades. Waiving Order No. 871, which delayed the construction of natural gas infrastructure projects, the Federal Energy Regulatory Commission, which oversees interstate power markets, recently provided natural gas companies with increased flexibility and reduced regulatory burdens, creating even further competition for coal in the fossil-fuel generation market. [11] The cumulative effect has been to shift the national energy mix decisively toward natural gas and renewables, substantially limiting the viability of coal plants even in states without such mandates.
While these developments have produced considerable environmental gains, they have also imposed substantial economic and social costs on workers and their communities. In the scholarly back and forth between short-term stock price, [12] Tobin's Q, [13] the federal government's authority to restrict air pollution, [14] and the like, those who rely on the plant's sustained operation and who our corporate governance system is supposed to serve are lost. Employees of closing plants face the immediate loss of stable, well-compensated employment, often in regions with limited alternative opportunities for their skillset. Job loss of this kind has lasting adverse impacts on income, health, and overall well-being, particularly in the United States, where access to critical services, like health insurance or tax-benefited retirement plans, is mainly predicated on gainful employment. [15] The surrounding communities, many of which have long relied on plant tax revenues, suffer corresponding declines in public services and local economic activity. In coal-reliant counties, the closure of a single major plant can reduce local revenue by as much as 20 percent. [16] Even shareholders, ostensibly the constituency our market-centric discourse aims to protect, [17] do not consistently benefit from existing closure practice–a point taken up later in this essay.
III. LESSONS FROM THE STEEL INDUSTRY: A HISTORICAL PARALLEL
When examining the solutions to the challenges that face coal power, it is instructive to discuss American steel. A comparable pattern of concentrated industrial contraction occurred during the decline of the steel industry in the late 1970s and early 1980s. Once a central component of postwar manufacturing, large integrated steel mills became increasingly uncompetitive as foreign producers with newer facilities and lower production costs entered global markets and drove prices downward. [18] Older plants, many of which required significant capital investment to remain viable, proved unable to withstand this shift, and closures rapidly proceeded across the Midwest and Mid-Atlantic regions, displacing more than 500,000 jobs. [19] It was in response to this period of sustained industrial decline that courts and legislatures developed many of the doctrines governing plant closures, worker displacement, and employer responsibility. The statutory and common law rules that now structure much of modern labor and employment law, including early worker-adjustment requirements, pension-protection reforms, and judicial efforts to define the scope of managerial discretion during mass layoffs, were shaped directly by the legal and economic pressures associated with the collapse of steel. [20]
Although the forces that have precipitated the decline of coal power generation differ from those that undermined domestic steel, the resulting economic and social effects are substantially similar. The experience of the steel industry demonstrates that existing legal frameworks are unlikely to provide meaningful redress. This history indicates that coal-plant workers, whose circumstances resemble those of steelworkers in all legally relevant respects, are unlikely to obtain substantially greater relief under the doctrines that emerged from that earlier period of industrial contraction.
IV. STATUTORY PROTECTIONS AND THEIR LIMITATIONS
The two key federal statutes concerning plant closings are the Worker Adjustment and Retraining Notification Act (WARN) and the National Labor Relations Act (NLRA). These statutes represent the primary legal framework through which the federal government has attempted to mitigate the harmful effects of industrial contraction on workers. WARN addresses the informational asymmetry between employers and employees by requiring advance notice of mass layoffs, while the NLRA imposes bargaining obligations on unionized employers regarding the effects of closure decisions and protects workers engaging in concerted activity. Together, these statutes reflect a legislative judgment that workers deserve both warning of impending displacement and an opportunity to negotiate the terms of their separation. However, both statutes suffer from fundamental structural limitations that render them inadequate to address the scale and nature of worker displacement resulting from coal plant closures. Additionally, state and local statutes attempting to supplement WARN and the NLRA suffer from pre-emption challenges.
V. WARN AND THE INSUFFICIENCY OF EARLY NOTICE REQUIREMENTS
WARN generally requires employers with 100 or more full-time workers to provide 60 days' advance notice for both mass layoffs and plant closures involving 50 or more full-time employees. [21] WARN requirements differentiate between mass layoffs and plant closures by including a provision called the "onethird" rule, which only applies to mass layoffs and requires employers to give advance notice for layoffs of 50-499 employees only if they are reducing their workforce by at least 33 percent. [22] The employer is required to determine whether a layoff or closure meets WARN criteria; the Department of Labor is not responsible for enforcing WARN, as the law is enforced entirely by private action in federal court through the normal rules of civil procedure. [23]
Moreover, compliance with WARN is reportedly inconsistent, leaving workers without advanced notice of their terminations. Analysis from the Government Accountability Office, the independent auditing agency of the legislative branch, finds that employers provide notice for "approximately one-third of layoffs and closures that appear subject to WARN requirements." [24] The remaining mass layoffs and plant closures appear subject to WARN requirements, but employers did not provide notices. This is primarily because "employers and employees find WARN's definitions and calculations [in the implementing regulations] difficult to understand." [25] Federal courts have also interpreted some of the provisions in the law in varying ways, which adds to uncertainty when employers and employees apply WARN to their circumstances. Almost all state dislocated worker units report that employers and/or employees contact them with basic questions on WARN. [26] Indeed, states receive thousands of communications concerning WARN interpretation from employers, employees, and their representatives per year. [27] Furthermore, only "twothirds of the notices” that were actually provided to employees gave them “the full 60-day notice required by the law." [28] Even if WARN compliance were made more accessible, the nature of the statute, which only offers early notice of job loss, renders it ineffective for stranded workers in coal plants. Because the entire industry, not just a single company, is shrinking, employees can not easily secure new employment in a new plant during the 60-day notice period.
VI. NLRA AND THE CONSTRAINTS ON COLLECTIVE BARGAINING
Beyond WARN's notice requirements, employers with unionized workforces face additional obligations under the NLRA. Under §8(a)(5) of the NLRA, employers in a unionized shop are obligated to bargain over the effects of a plant closure, such as employee relocation or severance; there is no requirement to bargain over the decision to close itself. [29] These effects typically include employee transfer rights, [30] seniority issues, [31] severance payments, [32] pensions, [33] and unused vacation and sick days, [34] but may include other permissible subjects of bargaining as well. [35] The employer must bargain in good faith, “participat[ing] actively in the deliberations so as to indicate a present intention to find a basis for agreement" until an agreement or impasse is reached. [36]
While the NLRA imposes a duty to bargain in good faith, it does not require that the parties actually come to an agreement. [37] More often than not, parties are unable to agree on the effects of the plant closure, and negotiations reach an impasse after "good faith negotiations have exhausted the prospects of concluding an agreement." [38] Once the parties bargain to an impasse, the employer may unilaterally impose terms or conditions consistent with its initial offer, even terms that the union rejected. [39] Even though an impasse on one issue does not suspend the obligation to bargain about other issues, the NLRA still remains an ineffective remedy for employees attempting to preserve their job security because of the NLRA’s "weak enforcement mechanisms, slight penalties, and lengthy procedural delays [that] fail to protect workers’ ability to organize and bargain collectively with their employers.” [40]
Furthermore, the Fifth Circuit Court of Appeals is scrutinizing the constitutional validity of the National Labor Relations Board (NLRB), the body responsible for enforcing the NLRA. [41] The Fifth Circuit’s scrutiny arises from a broader national wave of constitutional challenges to federal administrative agencies, many of which question the legitimacy of agency structures and the limits of executive power. [42] At the time of this essay, the NLRB has been without a quorum for more than six months, leaving the board unable to issue decisions and further compounding delays in the enforcement process. [43] Finally, more than 85% of workers in the coal power industry are not unionized and thus do not enjoy the protections of the NLRA. [44] These non-unionized workers have the §7 right to engage in concerted activity to improve their working conditions without management interference; [45] still, the absence of a union structure still leaves employees with little practical capacity to exercise those rights.
VII. STATE AND LOCAL LAWS: PREEMPTION AND CONSTITUTIONAL CHALLENGES
In an effort to supplement WARN and the NLRA, some state and local legislators have adopted their own plant closing laws that provide additional notification and bargaining requirements. For example, South Carolina imposes a qualified obligation upon employers to give notice to employees of any shutdown, whether temporary or permanent. [46] If any employer requires its employees give notice of their intention to resign, then that employer will be required to post "in every room of its building" a printed notice of the shutdown, not less than 14 days in advance or the same length of time in advance of which it requires its employees to give notice of resignation. [47] An employer failing to post such notice is subject to a fine of $5,000 per employee, and is liable to its employees for damages they have suffered as a result of the failure to give notice. [48] At the local level, the City of Philadelphia requires employers located within its boundaries that employ 50 or more people to notify their employees, their labor union, and the City's Director of Commerce of the company's intention to close or relocate a plant beyond a reasonable commuting distance, at least 60 days prior to taking such action. [49] The required notice must include, among several disclosures, the reasons for the proposed closing or relocation, and an impact statement concerning the employer's payroll and the employer's efforts, if any, to find suitable employment for affected employees. [50] Such efforts may include coordinating with workforce-development agencies, arranging job-placement services, or facilitating interviews with other local employers that have comparable positions available.
While litigation in this area has been sparse, state and local plant closure laws are especially vulnerable to constitutional challenges, namely, federal preemption and the Commerce Clause. The doctrine of federal preemption, rooted in the Supremacy Clause of the Constitution, provides that state laws may not interfere with a regulatory scheme imposed by Congress. [51] State laws dealing with labor and employment matters can be preempted by the NLRA in two ways. First, state laws are "presumptively pre-empted" if they address conduct which is actually or arguably either protected under §7 of the NLRA or prohibited under §8 of the NLRA. [52] A state law may prevail, however, if it is of only "peripheral" concern to federal law or deeply touches the interests of local feeling and responsibility. [53] Second, state laws may not regulate areas that Congress intended to remain unregulated, such as the parties' ability to use economic weapons during collective bargaining or a labor dispute. [54] Efforts by states to regulate plant closings or relocations may conflict with the NLRA in both of the above respects.
Regarding plant closures, any state law that imposes more burdensome obligations upon an employer risks preemption. With respect to the notice requirements contained in State Statutes, the NLRB and the courts regularly have held that under §8(a)(5) of the NLRA, the employer is required only to give the union enough advance notice of a plant closing to allow "meaningful" bargaining over the effects of the closure. [55] While application of the preemption doctrine has varied over time, a state's interest in protecting the welfare of its citizens is sometimes found to outweigh a preemption concern, even though state regulation may impact the bargaining process. [56]
Beyond challenges of preemption, in City of Philadelphia v. New Jersey, the Supreme Court interpreted the Commerce Clause to prohibit actions by states that result in economic isolation or protectionism. [57] State plant closing laws can be plausibly read to impede the flow of interstate commerce. The Court has also ruled that policies to retain jobs within a state by prohibiting the export of certain state resources are unconstitutional; [58] the Court "view[s] with particular suspicion state statutes requiring business operations to be performed in the home state that could more efficiently be performed elsewhere." [59] Since most state plant closing laws aim at mitigating the effects of plant closings on employees and communities—a legitimate state concern—rather than simply at protecting jobs, they are unlikely to be found facially violative of the Commerce Clause. Therefore, the test that is likely to be applied is one of balancing the effects of the law upon interstate commerce with the local benefits which flow from it. [60] Thus, where a statute's advance notice period is excessive in length, or its penalties or severance pay requirements are inordinately high, the statute may be open to Commerce Clause challenges. Additionally, if the benefits supposedly flowing from the statute are only marginal, the statute may be found invalid. [61]
VIII. JUDICIAL REMEDIES AND THE LIMITS OF CONTRACT AND PROPERTY CLAIMS
As more attention has been drawn to the subject of plant closings, those opposed to such moves have formulated some innovative—albeit unsuccessful—theories under the common law of contracts and property in support of their positions. The most salient of these arguments regard promissory estoppel, or promise breaking, and community property rights. An employer that seeks union or employee concessions as a means of permitting an unprofitable plant to stay open should be aware that any representations it makes may later provide a basis for a suit for breach of contract or promissory estoppel. In a case involving the shutdown of the U.S. Steel Corporation plants in Youngstown, Ohio, employees claimed breach of contract and promissory estoppel with respect to the employer's alleged promises to keep plants open if employees made them profitable. [62] The Sixth Circuit denied these claims on the grounds that the alleged promises could not be attributed to the employer due to the lack of authority of their maker, the statements were too vague to find a clear promise, and that the plants actually failed to become profitable. [63] It is important to note that while the Court rejected the employees' promissory estoppel arguments, it pointed out that an equitable standard is to be applied in such cases; the strict legal requirements for contracts do not apply. [64] An equitable standard focuses on the fairness and reasonableness of the parties’ conduct, meaning future cases turn on whether an employer’s assurances actually induced reliance from the employee. In Abbington v. Dayton Malleable, Inc., the Southern District of Ohio held that employer statements intended to bolster employee enthusiasm and congratulate employees for their efforts to keep the plant operational did not constitute promises under promissory estoppel doctrine. [65]
In the United Steel Workers v. United States Steel Corp., at the insinuation of the federal district judge adjudicating the case, the plaintiffs amended their complaint to include a claim that a property right had accrued to them as a result of the long relationship between the community and the employer. [66] The Court ultimately rejected that notion, and concluded that the mechanism "to recognize this new property right, is not now in existence in the code of laws of our nation." [67] The Sixth Circuit, in an earlier case, had denied an employee's claim that he had acquired a property right to his job, protected under the Fourteenth Amendment to the Constitution, simply by working at the job for most of his lifetime. [68]
IX. FIDUCIARY DUTY AND THE ROLE OF BOARDS IN PLANT CLOSURES
Indeed, the existing legal framework has proven inadequate in protecting workers facing displacement from coal plant closures. The question, then, is whether any legal mechanism exists to compel meaningful investment in workforce transition during plant closures. The answer may lie not in labor law or statutory mandates, but in corporate governance itself.
Fiduciary duty describes the relationship among the directors of a corporation, the corporation itself, and the shareholders of that corporation. The key aspects of fiduciary duty are twofold. The duty of care requires that directors inform themselves "prior to making a business decision, of all material information reasonably available to them." [69] The duty of loyalty provides directors with negative and affirmative burdens. Negatively, it requires that directors leave any personal economic interests outside of their decision-making. In essence, "corporate officers and directors are not permitted to use their position of trust and confidence to further their private interest." [70]
Beyond prohibiting directors from self-dealing conduct, the duty of loyalty embodies an affirmative, or positive obligation "to refrain from conduct which would injure the corporation and its stockholders or deprive them of profit or advantage." [71] A loyal fiduciary must make a good faith effort to engage with corporate affairs and make sound decisions that promote the sustained profitability of the corporation and the welfare of its stockholders. [72] The negative aspect of fiduciary duty has received significantly more attention in case law than the affirmative obligation. [73] This is not without reason; courts are better equipped to identify and remedy breaches of loyalty or instances of misconduct than to evaluate whether a fiduciary has exercised sufficient diligence or pursued an optimal course of action. However, the importance of the negative component's role in addressing conflicts-of-interest and self-dealing has left the affirmative component too often overlooked during managerial deliberations. [74]
For purposes of this article, ‘good-faith consideration’ refers to a documented, deliberate, and information-rich evaluation process consistent with the affirmative component of the duty of loyalty. This includes identifying all materially relevant data, assessing foreseeable long-term risks and opportunities, considering reasonable alternatives, and articulating the basis for rejecting or adopting worker retraining programs. The standard regulates process, not outcomes: a board may ultimately decide that transition investments are not economically justified, but it must reach that conclusion through a genuine exercise of business judgment rather than through inertia or a narrow focus on short-term cost minimization. Thus, the good-faith consideration discussed in this paper is best understood as a procedural requirement.
So long as directors act within these parameters of fiduciary duty, their actions are immune from liability or correction from courts due to the Business Judgment Rule (BJR). One of the fundamental aspects of corporate law, the BJR holds that directors are immune from liability for their business decisions, so long as there is a rational basis for their decision. [75] To that end, BJR gives corporate directors substantial room to create policies they rationally believe will advance the best interests of the corporation and its stockholders. [76]
Courts can distinguish genuine business judgment from inertia through documented evidence of the decision-making process. A board that rationally concludes workforce transition is uneconomical will have likely commissioned studies, reviewed labor market analyses, consulted with human resources experts, and documented the specific reasons why retraining costs exceed anticipated benefits for that particular facility. By contrast, a board that closes a plant while addressing only immediate compliance obligations, such as severance calculations, WARN notice timing, and pension transfers, without any documented consideration of workforce redeployment possibilities demonstrates inertia rather than judgment. This distinction mirrors established corporate governance practices in other contexts; boards routinely document their consideration of merger alternatives, capital allocation options, and strategic pivots precisely to demonstrate that their eventual decision reflected genuine deliberation rather than path dependence. [77] The procedural requirement proposed here demands no more than what boards already do when making consequential decisions affecting corporate assets of comparable value.
When closing a plant, a board has a fiduciary duty to engage in behavior it deems in the best interest of shareholder value creation. On that basis, boards are typically expected to consider the optimal ways to minimize the costs of asset liquidation, decommissioning expenses, and environmental remediation fees. [78] On the workforce side, compliance with WARN and similar labor statutes, and pension obligations is seen as the extent of the board's responsibility. [79] In contrast, workforce transition is not a regular consideration at the Board level, as analysis from the Environmental Resource Management Institute indicates that few boards conduct cost–benefit analyses of retraining or redeployment programs that could facilitate worker transitions to new roles or industries. [80] Critically, a board's fiduciary duty cannot be reduced to just the negative component: a mandate to minimize costs or preserve short-term liquidity. Taking into account the duty of loyalty’s positive dimension and the newfound labor shortages in the clean energy economy, the current focus on near-term costs and financial exposure does not fully encompass the full architecture of fiduciary duty. Not only must boards avoid undue harm, but they must also affirmatively promote the enduring health and value of the enterprise.
This fiduciary duty framework addresses three fundamental deficiencies in the existing regulatory regime. First, unlike WARN's rigid notification requirements, which merely inform workers of impending displacement, fiduciary duty requires substantive engagement with workforce retraining as a component of shareholder value creation. Second, where statutory mandates suffer from weak enforcement mechanisms, fiduciary duty is enforced through shareholder derivative suits, proxy contests, and the market for corporate control, creating far more potent accountability structures. [81] Third, federal preemption doctrines have historically constrained state and local efforts to impose transition obligations on closing facilities, but corporate governance operates within the internal affairs doctrine, making fiduciary requirements immune to preemption challenges that have inhibited other protective frameworks. [82]
X. INTERPRETING FIDUCIARY DUTY TO CONSIDER RETRAINING PROGRAMS
Given recent developments in the clean energy economy’s labor force, considering the effects of workforce transition and retraining programs during the decommission process allows boards to satisfy their positive fiduciary obligations. Two lines of reasoning demonstrate why the positive obligation extends to workforce investments. First, investing in workforce transition and retraining programs serves long-term shareholder wealth creation by mitigating reputational harm, preserving institutional knowledge, stabilizing labor relations, and improving training efficiency. Second, labor shortages constitute a mission-critical risk that evokes Caremark obligations, compelling directors to monitor and address workforce transition risks. Importantly, this affirmative duty does not compel directors to maintain unprofitable operations or to adopt any specific retraining program. Rather, it obliges them to make an informed, good-faith assessment of transition impacts as part of their rational business decision; the substantive decision receives the protection of the BJR. However, given the pressing labor challenges in the clean energy industry, meaningful deliberation will likely yield retraining actions from broads. Indeed, when boards engage in the documented, deliberate, and information-rich evaluation processes, they are likely to be confronted with empirical data showing that retraining costs are often modest relative to the reputational, operational, and human capital preservation benefits detailed in this section. Thus, the procedural mandate creates conditions under which rational economic actors, when presented with complete information about the four mechanisms for maximizing shareholder value outlined above, may likely conclude that transition investment aligns with their fiduciary obligations.
XI. THE IMPACT OF WORKFORCE TRANSITION ON SUSTAINABLE SHAREHOLDER VALUE
Investment in workforce transition satisfies the affirmative component of the duty of loyalty. Workforce transition promotes the long-term health of the enterprise by mitigating reputational harm, preserving institutional knowledge, improving training efficiency, and stabilizing labor relations. Each of these effects supports sustained shareholder value and protects the corporation against foreseeable operational and financial risks.
First, investment in workforce transition mitigates reputational harm. In industries subject to significant public scrutiny and regulatory oversight, a company's reputation constitutes a critical corporate asset. The social license to operate depends on whether the public perceives the firm as a responsible participant in economic transition. [83] Absent retraining initiatives, plant closures invite political backlash, litigation, and regulatory scrutiny. [84] By contrast, companies that assist displaced workers through retraining and redeployment programs are more likely to receive favorable treatment from local communities. [85] The avoidance of reputational injury thus represents a rational exercise of business judgment directed toward preserving long-term value.
Second, workforce investment preserves institutional knowledge. Workers develop firm-specific skills and tacit understandings of production processes that cannot be easily replaced through external hiring. Redeployment and retraining initiatives allow directors to capture the value of accumulated experience and knowledge about company-specific operations, also known as human capital. [86] From the perspective of long-term shareholder value, such programs represent a prudent method of capital preservation, as human labor is not like a commodity that can be freely exchanged between companies: workers develop skills particularized for their specific employment relationship. Indeed, businesses that take affirmative steps to preserve knowledge and retrain employees show improved performance compared to similar firms that do not invest in human capital.
Moreover, many energy corporations possess diversified business portfolios that extend across multiple generation types, including natural gas, solar, and wind assets. This diversified structure means that plant closures do not entail a total cessation of business operations. These firms are therefore positioned to reassign or retrain coal plant employees into adjacent business lines rather than severing the employment relationship altogether.
Third, retraining investments can improve training efficiency, reducing onboarding costs for clean energy projects by as much as $4,925 per person. [87] Recruiting, hiring, and onboarding new employees impose significant expenses, particularly in specialized industries such as energy generation. Moreover, only 35% of the tasks associated with working as an operator or technician in a coal power plant are industry-specific, so the majority of workers would need minimal retraining to perform new roles. [88] Still, there are certainly exceptions to this finding, and boards will likely need to engage in individualized analysis to determine the feasibility of retraining employees.
Finally, attention to workforce transition stabilizes labor relations. In sectors like energy production, characterized by high union density and inelastic labor demand, labor relations and broader levels of employee engagement remain a significant determinant of operational success. [89] Cooperative management practices reduce the risk of strikes, which can be particularly disruptive in the energy industry, where customers and the architecture of the grid as a whole depend on reliable operations from plants. [90] Outside of avoiding the negative aspects of poor labor-management relations, improving employee engagement can more than double shareholder value creation, profitability, and a firm's return on assets, as workers demonstrate greater degrees of organizational citizenship and improved productivity. [91]
XII. MISSION-CRITICAL RISKS AND BOARD OVERSIGHT RESPONSIBILITIES
The affirmative obligation of the duty of loyalty also encompasses a responsibility to monitor mission-critical risks to the corporation. Under In re Caremark International Inc., directors must make a good faith effort to ensure that adequate information and reporting systems exist to identify and address such risks. [92] In the context of energy transition, labor continuity is a mission-critical concern because the modern energy sector faces an emerging shortage of skilled workers. Recent analysis from Goldman Sachs estimates that the American power industry may require more than 510,000 new workers by just 2030 to meet infrastructure and decarbonization goals. [93] This goal is unlikely to be met with the status quo. [94] Existing training infrastructure will need to increase by at least 50 percent to fulfill these goals. [95] A good-faith oversight system, in this context, would include mechanisms to track redeployment potential and to evaluate retraining outcomes for displaced workers. Absent such systems, a company is unlikely to meaningfully identify or respond to labor continuity risks.
This threat of labor shortages presents a mission-critical risk to energy companies. In Marchand v. Barnhill, the Delaware Court of Chancery clarified that a mission-critical risk is one that strikes at the core of the company’s ability to operate profitably. [96] Thus, failure to establish oversight in areas "essential and mission critical to the company's survival" constitutes a breach of the duty of loyalty. [97] In Marchand, the court held that food safety was mission-critical for an ice cream manufacturer because it was fundamental to the company’s survival. By the same logic, not considering workforce transition risks in the energy sector could be viewed as falling within this category, as the ability to maintain and replenish a qualified workforce is integral to continued operations. While Marchand dealt with short-term, exigent harm to the business, and chronic labor shortages facing the clean energy economy concern long-term risks, the functional condition of mission-criticality is still met: a shortage of workers could expose a corporation to significant operational disruption as power plants would be unable to source operators and technicians.
XIII. CORPORATE GOVERNANCE AS A MECHANISM FOR A JUST ENERGY TRANSITION
The decline of the coal industry exposes a gap between existing labor protections and the realities of economic transition. While statutory schemes provide notice and limited bargaining rights, they do not ensure meaningful protection for workers or communities; as such, corporate governance provides a path to close that gap. Boards have an obligation to engage in good faith, informed consideration of the impacts of workforce transition when deciding to close a plant, assessing not only compliance costs but also the long-term effects of retraining and redeployment on the health of the enterprise. Because most energy firms are diversified, such an assessment naturally encompasses whether employees can be repositioned within the firm’s existing operations. This obligation to consider the effects of retraining does not constitute actually engaging in reskilling efforts for all workers at a company, but the unique circumstances of the energy industry provide substantial incentives for boards to engage in reskilling when possible.
However, the movement toward decarbonization depends on the stability of the energy workforce, and the displaced coal power plant labor force represents a considerable source of workers to build and maintain the energy infrastructure of the clean energy transition. By including the affirmative obligation of the duty of loyalty and the importance of addressing mission-critical risks in the interpretation of fiduciary duty, boards can align shareholder value creation with positive social action responsibility. In doing so, corporate governance can become an instrument of a just labor transition, ensuring that the shift to clean energy strengthens, rather than undermines, the communities that sustained the old energy economy.
Endnotes
[1] Shenk, Mark. “Rush for US Gas Plants Drives Up Costs, Lead Times.” Reuters, July 21, 2025. Accessed December 1, 2025. https://www.reuters.com/business/energy/rush-us-gas-plants-drives-up-costs-lead-times-2025-07-21/
[2] Heated Battery. “How Many Coal Plants Remain Active in the US in 2025?” Heated Battery. February 19, 2025. Accessed November 19, 2025. https://www.heatedbattery.com/how-many-coal-plants-remain-active-in-the-us-in2024/
[3] Kolstad, Charles D. “What Is Killing the US Coal Industry?” Stanford Institute for Economic Policy Research (SIEPR), March 2017. Accessed November 19, 2025. https://siepr.stanford.edu/publications/policy-brief/whatkilling-us-coal-industry
[4] Solomon, Michelle. “Coal Power 28 Percent More Expensive in 2024 Than in 2021.” San Francisco: Energy Innovation, June 5, 2025. Accessed November 19, 2025. https://energyinnovation.org/report/coal-power-28-percentmore-expensive-in-2024-than-in-2021/
[5] International Renewable Energy Agency (IRENA). “Renewable Power Generation Costs in 2023.” Abu Dhabi: IRENA, September 2024. Accessed November 19, 2025. https://www.irena.org/- /media/Files/IRENA/Agency/Publication/2024/Sep/IRENA_Renewable_power_generation_costs_in_2023.pdf
[6] Duggins, Pat. “Trump to Push Sales of Coal in Alabama and Elsewhere, Despite Plummeting Demand.” Alabama Public Radio (AP News), October 5, 2025. Accessed November 19, 2025. https://www.apr.org/news/2025-10- 05/trump-to-push-sales-of-coal-in-alabama-and-elsewhere-despite-plummeting-demand
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[8] Sarah Shemkus, “New England’s Final Coal Plant Shuts Down Years Ahead of Schedule,” Canary Media, October 7, 2025, accessed November 19, 2025, https://www.canarymedia.com/articles/fossil-fuels/new-englands-last-coalplant-shuts-down
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