The United Steelworkers have demanded that Esmark Inc repudiate the agreements that it recently entered into with Essar Steel Holdings Limited. In a letter to the company, the USW asserted that the agreements with Essar are in direct violation of the company's collective bargaining agreement with the union.

The USW contends that Esmark has breached the legal protections granted by its Right to Bid Clause by entering into the memorandum and closing on related financing without first providing the Steelworkers with appropriate notice and an opportunity to bring forward an alternative proposal. The union indicated in its letter that it believes that Essar is complicit with this breach.

Mr David McCall, Director of USW District 1, which covers Ohio where many of the Esmark plants are located, said that "The USW's rights under the Right to Bid clause clearly prohibit the Company from entering into these agreements and we will take whatever action is necessary to protect these rights. We used our contractual protections to prevent CSN from taking over Wheeling Pitt, which opened the door for Esmark to acquire the Company. You would think they would have learned something from that transaction."

USW added that “Under another section of the USW labor agreement, the Successor hip Clause, Esmark and Essar cannot close the proposed transaction until Essar has entered into a collective bargaining agreement with the USW and the USW has told the company that it will use that power to block the Essar deal.”

Mr Leo Gerard, President of the USW said that “It is quite frankly offensive that after the support Esmark received from the Steelworkers to get control of the company in the first place, that they would simply ignore the agreement they made with us.”

According to the company's recent Form 8K, filed with the Securities and Exchange Commission on April 30th 2008 Esmark entered into a memorandum of agreement and other understanding with Essar that would result in the company's eventual sale to Essar. These agreements include a clause which would obligate Esmark to pay Essar a USD 20.5 million break fee and various other payments in the event the company agrees to sell itself to another entity.