Kentucky miners had their paychecks clawed back. The Labor Cabinet is now investigating.

A Blackjewel LLC mine in Harlan County sat idle on July 5, 2019, in the wake of the company’s bankruptcy.
A Blackjewel LLC mine in Harlan County sat idle on July 5, 2019, in the wake of the company’s bankruptcy.

The Kentucky Labor Cabinet announced Monday it will investigate Blackjewel LLC., a bankrupt Kentucky coal producer whose employees had their paychecks clawed back last week.

The Cabinet will investigate claims from miners that they were not paid for time worked after the company and its affiliate Revelation Coal declared Chapter 11 bankruptcy on July 1, according to a press release from the office of Gov. Matt Bevin.

Cabinet officials will be in Harlan and Letcher counties this week to continue the investigation.

Workers who believe they have not received wages for time worked are encouraged to contact the Labor Cabinet’s Division of Wages and hours at (502) 564-3534.

“The Labor Cabinet takes this issue very seriously, and we will make every effort to fully investigate and, if necessary, prosecute these claims on behalf of Kentucky’s coal miners,” Labor Cabinet Secretary David Dickerson said in a press release.

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A number of Eastern Kentucky state representatives and county judge executives have criticized the company for the non-payment of miners.

“These people were wronged, and (the company) is wrong for doing it to these people, and there’s a price that needs to be paid,” Harlan County Judge Executive Dan Mosley said. “It infuriates me.”

Mosley said Department of Labor officials took applications in Harlan County on Monday from 300 miners who said their paychecks were clawed back. The county also provided miners with an official letter they can give to creditors that explains why they may be unable to make bill payments.

“We’re hoping this letter will help validate their story on why they’re behind on their payments,” Mosley said. “It’s truly remarkable, we’ve never heard of anything like this.”

Blackjewel LLC. and its affiliates are one of the largest coal producers in the nation, employing about 1,100 people at mines in Kentucky, Virginia and West Virginia, along with 600 people at two surface mines in the western U.S.

The companies issued their most-recent paychecks to miners in the east on June 28, but after the company declared Chapter 11 bankruptcy July 1, miners and their wives reported that the paychecks were withdrawn from their accounts.

That left many families, who had already used the money to pay bills, with overdrawn accounts and concerns over their financial stability.

Mosley said the checks issued June 28 were for the pay period of June 1 -June 15, and that miners are due another check this Friday for the pay period of June 16-June 28.

If that check doesn’t come through, “these people have worked a month for this company for nothing,” Mosley said.

“I’m excited and happy that the state has stepped up,” Mosley said. “There are so many wrongs here, this is just the tip of the iceberg of how bad these people have been done.”

During a hearing this weekend, the company confirmed that it would not be able to pay many miners until it had enough money to re-open its mines and bring people back to work.

Court documents show the coal company knew there wasn’t money in the bank to cover the June 28 checks issued to employees in Kentucky, but instead hoped to get money the week of July 1 to cover the checks.

That financing plan fell through, leaving the company without enough money to make good on the checks it already distributed.

Mosley said Harlan County is working with attorney Ned Pillersdorf to represent the county and miners as the situation unfolds. The company owes about $55,000 in delinquent taxes to Harlan County, Mosley said.

“We’re not gonna take a knife to a gunfight anymore,” he said.

The company secured a $5 million loan last week to that will allow it to bring back some employees for security and other “critical functions,” but it does not have the financing to reimburse the rest of its employees for the clawed-back checks.

A condition of that loan was that the company’s former CEO Jeff Hoops resign. Hoops has been replaced by interim CEO and Chief Restructuring Officer David Beckman, a senior managing director at FTI Consulting.

“Our miners got up and went to work every day to provide for their families,” said state Rep. Adam Bowling (R-Middlesboro). “They deserve far more than they have received, and I applaud the state for stepping in to see what can be done.”

Attorney General Andy Beshear’s office said Monday that it has dedicated an investigator to look into complaints related to clawed-back paychecks and concerns related to child support deductions.

The office has also devoted mediators to help miners mediate debt payments, and asked miners impacted by the bankruptcy to call 502-696-5300 and ask to speak with Jan Velez.

Gov. Matt Bevin said the state will use “every available tool” to help miners and their families receive financial restitution.

“While this will not likely yield an overnight fix, I am confident that the Labor Cabinet will undertake a thorough investigation and determine the appropriate best path forward,” Bevin said.

Billie Jean Brassfield, whose husband David works at a Blackjewel mine near Cumberland, said she called the state Labor Cabinet on Monday and provided information on the $2,000 check clawed back from their account.

She is glad the state is investigating.

“Finally, people realize it’s not just two mines in Wyoming” where miners have had trouble getting paid, she said.

Brassfield said she has talked to dozens of miners’ wives, and all are praying that Beckman, the new manager, is able to correct the situation.

“Everyone holds Jeff Hoops accountable,” she said.

Will Wright is a corps member with Report for America, a national service project made possible in Eastern Kentucky with support from the Galloway Family Foundation. Based in Pikeville, Wright joined the Herald-Leader in January 2018 and reports on Eastern Kentucky.