Beshear pledges to enforce wage law, hold coal company accountable amid miner protest

Responding to the pleas of coal miners who blocked a Pike County railroad track Monday night over unpaid wages, Gov. Andy Beshear vowed Tuesday that his state Labor Cabinet will take the miners’ employer to court if the company does not comply with his administration’s demand for records.

During an interview with the Herald-Leader, Beshear laid out a number of other actions that his administration has taken against American Resources Corporation and its subsidiaries, including Quest Energy, which has left dozens of miners without pay for at least two weeks of work.

In addition, Beshear said the Kentucky Labor Cabinet and Energy and Environment Cabinet have begun a comprehensive review of every mine in Kentucky to ensure that coal companies comply with a state law that requires some companies to post a bond to protect miners’ wages in the event of a sudden shutdown.

On Monday evening, more than a dozen coal miners gathered on a set of railroad tracks near the Kimper community of Pike County and blocked a train hauling coal from a mine owned by American Resources Corporation. The miners said they had not been paid since Dec. 27, and several employees said they had worked more than two weeks without pay.

Late Tuesday, some miners said they had received payment for two weeks of work, but were still owed for several days. Others said they hadn’t been paid at all. The miners said Tuesday they would continue the blockade until all receive their full paychecks.

The protest is the second in six months in which Kentucky coal miners have blocked a railroad track over unpaid wages. Last year, in Harlan County, miners camped out for months along a set of railroad tracks in protest of Blackjewel LLC., which filed for bankruptcy and left hundreds of workers without pay for weeks of work.

“I am going to use every single resource of this government to get them paid,” Beshear said. “They do hard, dangerous work, and they shouldn’t have to protest just to get the wages that they are owed.”

Among the actions taken in response to the protest, Beshear said his administration has issued a closure order for the McCoy Elkhorn Mine #15 and the Bevins Branch Preparation Plant, which are owned by American Resources Corporation. The closure order will prevent the company from producing any coal at the mine, and will not be lifted until all miners are paid for their past work, he said.

The administration also will file a complaint with the Mine Safety Review Commission, and will become directly involved in the bankruptcy of Cambrian Coal, a major Kentucky coal producer that sold mines in Perry County to ARC last year during its bankruptcy.

The Kentucky Labor Cabinet will take ARC to court if it does not receive “every document that it needs,” he said.

Beshear was critical of the bankruptcy court for allowing ARC to purchase Cambrian’s mines.

Court filings show that ARC was blocked under the federal Surface Mining Control and Reclamation Act from acquiring new mining permits when it bought mines from Cambrian during the bankruptcy.

An initial order approved by the court required that Cambrian’s purchasers must not be “permit blocked” by any governmental body. Cambrian and ARC, however, entered into a separate agreement that did not include that requirement, and failed to present their separate agreement to court.

During a hearing last month, Judge Gregory Schaaf of the U.S. Bankruptcy Court for the Eastern District of Kentucky said he was not aware that ARC was permit blocked before he approved the sale of the Perry County mines.

“We are going to voice our frustration with the bankruptcy court that a company that otherwise could not do business, this type of business, in Kentucky, and was somehow allowed to,” Beshear said. “Because of that, we are going to push the bankruptcy court very strongly to prioritize having these wages paid, and paid immediately.”

Beshear said his administration will also take a tough stance on a performance bond requirement that made headlines last year during the Blackjewel bankruptcy.

Blackjewel failed to pay a performance bond, required by state law, to protect miners’ wages, and subsequently laid off hundreds of workers without pay. A review of Labor Cabinet records later showed that not a single mining company had posted the bond in the past five years.

KRS 337.200 requires “every employer engaged in construction work, or the severance, preparation, or transportation of minerals” that has continuously operated in Kentucky for less than five years to post a performance bond with the Labor Cabinet to cover its payroll for four weeks. If the company suddenly shuts down, the money could be used to pay employees.

According to its website, ARC formed a subsidiary, Quest Energy, in 2015.

Beshear said he does not believe American Resources Corporation, or its subsidiaries, have posted the bond.

“We’re gonna make sure that there are, as we move into the future, no shell games with different subsidiaries where one company is brought in to employ people and another company may own the mine,” Beshear said. “We are not gonna let companies get around these bond obligations, and I can tell you in this instance we are gonna use every resource of state government to get these miners paid.”

Following the Blackjewel bankruptcy, state Rep. Angie Hatton, D-Whitesburg, and Sen. Johnny Ray Turner, D-Prestonsburg, filed legislation that would compel the state Energy and Environment Cabinet to notify the Labor Cabinet’s Department of Workplace Standards of any application for a mining permit from a company that has been doing business in Kentucky for less than five years.

The bills would also compel the EEC to notify the Labor Cabinet of any companies that already have permits that are subject to the bond.

Asked what his administration would do if those bills fail, Beshear said his EEC and Labor Cabinet are “working hand-in-hand to ensure that we are not issuing the type of permits that allow you to operate a mine unless that there is a bond that has been posted for new mining operations.”

“Similarly, we are going back through and reviewing each and every operation to make sure we are protecting our workers,” he said. “We as an administration are committed to making sure that we get this right.”

Other politicians, including Democratic presidential candidate Bernie Sanders and U.S. Senate Majority Leader Mitch McConnell, pledged their support for the miners.

In a tweet, McConnell called on ARC to pay the miners without delay.

“Not paying these miners for their hard work is unacceptable,” McConnell said. “I will continue to closely monitor the situation in Pike County.”

Sanders, a Democratic Senator from Vermont, said he will stand by the miners “who must be paid what they have earned.”

“We will not abandon coal workers and fossil fuel-dependent communities as we transition to a clean energy system,” Sanders said. “We will ensure a just transition for all.”

On a local level, Pike County Judge-Executive Ray Jones said he was in touch with the state Labor Cabinet and the Federal Department of Labor to ensure that miners are paid.

Jones said state Labor Cabinet officials will arrive in Pikeville this week and meet with miners to help them file claims for wage and hour violations. The Federal Department of Labor is working to file a restraining order that would prevent the train from moving until miners are paid, he said.

The federal labor department issued a similar order in the Blackjewel case by declaring the coal “hot goods” because it was produced by workers who hadn’t been paid.

“I’m optimistic that we will able to see these people get paid, but there needs to be something done going forward to make sure this doesn’t happen again,” Jones said. “It’s becoming all too frequent in the coalfields that the coal operators seem to be able to walk out of these situations with money in their pocket, and the miners are the ones, and the vendors, in a lot of cases, are left holding the bag.”

This story was originally published January 14, 2020 at 4:51 PM.