Former Blackjewel miners agree to let CSX train engines pass with no coal
As out-of-work Harlan County coal miners continued their fifth day of protests against the bankrupt coal company that gave them cold paychecks, politicians from every level of government have glommed on to their cause.
On Thursday, miners sat on a CSX railroad track near Cumberland under canopies and shook hands with Democratic U.S. Senate candidate Amy McGrath and former Kentucky Speaker of the House Greg Stumbo, the democratic nominee for state attorney general.
The evening before, Republican Gov. Matt Bevin published a video encouraging donations to organizations such as With Love From Harlan, which has been raising money for out-of-work miners’ electric bills, groceries and other expenses. His Democratic opponent, Attorney General Andy Beshear, has asked the Office of the United State Trustee to authorize “the immediate payment” of all wages owed to the miners.
McGrath’s primary opponent, Mike Broihier, has also visited the miners, as have state Reps. Angie Hatton, D-Whitesburg; Adam Bowling, R-Middlesboro; and Charles Booker, D-Louisville.
The protests kicked off Monday afternoon when a small group of miners blocked a train hauling coal in Harlan County. The train had been parked at a mine owned by Blackjewel LLC, a major coal producer that declared bankruptcy in early July and left hundreds of Kentucky miners with bad checks.
After allowing a CSX locomotive engine that was not carrying coal to pass Wednesday afternoon, the miners said they will continue to occupy the tracks until the company pays them for the time they’re owed. Most Blackjewel miners in Kentucky have not been paid for three weeks and one day of work.
The company last issued paychecks June 28. Many miners and their families deposited those checks and used the money to pay mortgage payments and other bills.
Court records indicate the company knew it didn’t have the money to fund the checks, but instead planned to rely on a loan that would have covered them. The loan agreement fell through, and after the company declared bankruptcy the next week, the checks bounced.
Banks withdrew the money, leaving many of the miners’ bank accounts overdrawn by $1,000 or more.
McGrath said she visited to give voice to the miners and their families, not for political gain.
“It’s not about me,” McGrath said. “It’s about going out there and highlighting what’s going on in this community and the miners and their families, and that’s why I’m here.”
Stumbo spent most of his time at the tracks listening to the stories of miners and their families, but ended with a sharp criticism of Bevin’s Labor Cabinet for not ensuring the company had posted a required performance bond that was supposed to supply up to four weeks of miners’ wages in a financial emergency.
“The Labor Cabinet for some reason didn’t do their job, and they all ought to be fired,” Stumbo said. “They didn’t do it and they all ought to be fired for sitting on their hind ends in Frankfort and not getting that done.”
The law — KRS 337.200 — says every Kentucky employer that is engaged in construction work or the severance, preparation or transportation of minerals, and has been in business less than five consecutive years, must furnish a performance bond to the Labor Cabinet “to assure the payment of all wages due from the employer.”
Blackjewel never paid that bond. It incorporated in 2017, so had been operating in Kentucky for about two years before it declared bankruptcy.
The cabinet issued a formal citation dated July 30 to Blackjewel and its former CEO Jeff Hoops, who resigned amid the bankruptcy, for violation of the law.
A copy of the citation, provided to the Herald-Leader by a cabinet spokesperson, lists a penalty of $366,500.
If the company does not respond to the citation with 15 business days, the cabinet will initiate a civil action to collect the penalty, according to the citation.
Kentucky Labor Cabinet Secretary David A. Dickerson told the Herald-Leader earlier this week that the cabinet has many similar bonds on file, but not all companies comply. The cabinet has no mechanism to see when new companies incorporate in Kentucky, Dickerson said.
He suggested the Blackjewel case may indicate the need to set up a system to alert the cabinet when new companies subject to the bond requirement incorporate in the state.
The cabinet is pursuing every avenue to help the miners get the money they are owed, Dickerson said.
“We’re being very aggressive with this,” he said.
Stumbo said he spoke with Attorney General Andy Beshear, who is the Democratic nominee for governor against Bevin. He said Beshear will use his office to investigate whether other companies subject to the bond have also failed to comply, and how the Labor Cabinet can enforce the law to avoid similar situations if other large coal companies shut down.
“At this point, we can only confirm that, under KRS 337.200, Blackjewel should have posted a bond to assure the payment of all due wages, and it was the Labor Cabinet’s duty to secure it,” said Deputy Attorney General J. Michael Brown. “The bond was supposed to have been an amount of money equal to the employer’s gross payroll operating at full capacity for four weeks.”
Stumbo also called for a criminal investigation into the company and its failure to pay miners.
“That’s egregious that government failed these people, it’s egregious what the company did to them,” Stumbo said.
Many former Blackjewel workers have also reported that the company failed to make good on 401(k) obligations despite withdrawing the money from their paychecks.
Others have said the company failed to make child support payments or to make contributions to their health savings accounts.
“Somebody probably needs to go to jail,” Stumbo said.
Hatton said she is worried about the long-term economic impact of the bankruptcy, and whether it would force more miners and their families to leave the region.
From 2016 to 2017, schools in neighboring Letcher County lost about 100 students because their families had left the region to find work elsewhere, she said.
The severity of the Blackjewel bankruptcy could cause another exodus, Hatton said.
“In the history of treating miners bad, this is the worst of all time because they actually stole from these people,” Hatton said. “It’s just no way to treat people.”
Hatton also criticized U.S. Sen. Majority Leader Mitch McConnell for not visiting the miners, saying his lack of support has been “abominable.”
“It’s like he doesn’t hear our voices,” Hatton said. “He needs to see that people are reduced to camping out on railroad tracks just to get the pay they already earned.”
Stephanie Penn, a spokeswoman for McConnell, said the senator has been featured in state and national news outlets commenting on the bankruptcy.
In a statement to the Herald-Leader, McConnell said the way Blackjewel has treated Kentucky miners is “shameful and outrageous.”
“These miners need to be paid in full for their work,” McConnell said. “As I understand it, Blackjewel is likely in violation of state law, and I commend Governor Bevin for opening an investigation into the situation. Bottom line — the miners need to be made whole, and the company needs to be held accountable for its horrific mismanagement.”