Blackjewel did not comply with law protecting Kentucky coal miners from cold paychecks

After filing for bankruptcy, Blackjewel LLC shut down the Eagle Butte and Belle Ayr coal mines...
After filing for bankruptcy, Blackjewel LLC shut down the Eagle Butte and Belle Ayr coal mines near Gillette, Wyo. (MGN)(KOTA)
Published: Jul. 31, 2019 at 3:47 PM EDT
Email This Link
Share on Pinterest
Share on LinkedIn

A month of hardship for Blackjewel miners could have been avoided if the coal company had followed Kentucky law.

employers that are engaged in construction work or the severance, preparation or transportation of minerals, and has been in business less than five consecutive years, should put up a performance bond to the Labor Cabinet. This bond is supposed to assure the payment of all wages.

Blackjewel incorporated in July 2017, so it should have posted a bond that would have taken care of the miners' wages despite the bankruptcy filing in July 2019. Labor Cabinet Secretary David A. Dickerson told the Herald-Leader that this never happened.

The surety for the bond is required to cover the company's entire payroll for four weeks. This would have covered the three weeks and one day of work that the current employees are owed.

A shortcoming in the law, however, does not provide a way for the Labor Cabinet to know which new companies are supposed to post bond.

“There’s a requirement that they do it, but there’s no apparatus whereby we would know that a new company had come in,” Dickerson said.

It is possible, though, that even if the bond had been posted, Blackjewel still would not have had the funds to pay its employees. Such a bond could still have made wages available sooner if it existed.

The Labor Cabinet is working with the federal Department of Labor on getting access to miners' 401(k) accounts and issued subpoenas to Blackjewel for payroll information.

Attorney Ned Pillersdorf said he is trying to find the miners relief in the meantime.

"The pleading we filed essentially says this is not a real bankruptcy. They're not broke, they've just shifted a bunch of assets around and that Lexington coal and BlackJewel are the same and that this is just a scheme to beat these miners out of their wages," Pillersdorf said.

Congressman Hal Rogers had his own statement to make:

“Our coal miners deserve to get the hard-earned paychecks they need to support their families. Several of them have personally called me saying they can’t pay their mortgage bill now, and some even had to borrow money just to get home from vacation after their paychecks were pulled from their accounts. Since day one of these abrupt and unexpected job losses, I have been fighting to get the answers and assistance our coal miners deserve. In fact, I have been in contact with the U.S. Department of Labor, and they are working to support the Kentucky Labor Cabinet’s efforts to investigate this issue and help displaced employees find new jobs. I will continue to support these families in any way I can.”

Attorney general candidate Greg Stumbo called for the Secretary of Labor's resignation Thursday:

“Blackjewel Mining should have been required to have a bond ensuring the payment of all wages owed to the miners, as is Kentucky law described in KRS 337.200. Clearly this bond was not in place – if it had been these miners would have been paid for their work. This is a gross oversight by the Labor Cabinet. Again, I call on this administration to immediately terminate the secretary for this grossly negligent failure to abide Kentucky law, and discipline all those in the cabinet that are responsible for this oversight.”

A hearing in the Blackjewel bankruptcy case was scheduled for Saturday but is now pushed back until Monday. Officials are trying to figure out how to bus miners to that hearing in Charleston, Virginia.