Murrow Award 2020 Story Archives - West Virginia Public Broadcasting

Paychecks Cut For W.Va. Blackjewel Miners, KY And VA Still Waiting

West Virginia employees of coal operator Blackjewel LLC have received their final paychecks more than two months after the company declared bankruptcy on July 1.

In an agreement reached last week between the Department of Labor and the company, Blackjewel cut paper checks for all owed wages to a few dozen employees working at the company’s Pax Mine in Fayette County, West Virginia.

While good news for former West Virginia employees, about 1,000 miners in Kentucky and Virginia are still owed millions of dollars in back wages.

Christina Burgess’ husband, Greg, ran heavy equipment at the Pax Mine. The 20 year coal mining veteran had been laid off before, but the family had never before experienced the fallout from a paycheck bouncing, as Greg’s did in early July.

“It’s been unreal,” Christina Burgess said.

The Burgess family received Greg’s owed wages late last week, but is still waiting for the check to clear a bank hold.

Blackjewel’s bad check created a series of challenges. The first few unemployment checks the family received went straight to the bank to get the account out of the red. In total, Christina said Blackjewel’s bankruptcy has cost her family about $3,000 in penalties and fees.

Greg quickly found new work after the Pax Mine closed and the family had some money saved in preparation for a downturn in the local industry. Christinia said she empathizes with younger miners who were hit hard by Blackjewel’s sudden bankruptcy.

As one of the administrators for the Blackjewel Employees Stand Together Facebook group, she has heard many stories of families unable to pay their bills as a result of not being paid by Blackjewel. She expects the fallout from Blackjewel’s bad checks to have long-term consequences as well.

“Everybody that’s involved in this right now their credit score has been damaged because of this,” Christina said. “And that’s hard to come back from when you when your credit starts going down.”

She said she reached out to more than three dozen West Virginia state senators and Attorney General Patrick Morrisey, but heard nothing back. She said she feels abandoned by West Virginia lawmakers who were slow to advocate on behalf of stiffed workers in the bankruptcy court and haven’t pushed utility companies or others to offer leniency to struggling Blackjewel families.

“They could have at least came in and said, you know, ‘don’t send turn off notices for the power bills, give them a little leeway,’” she said. “Nothing. We didn’t receive anything.”

The Pax mine is now owned by Tennessee-based Contura Energy. About 1,000 Blackjewel employees in Virginia and Kentucky are still awaiting millions of dollars in owed wages. A protest on the railroad tracks in Harlan County is in its eighth week.

Millions of dollars worth of coal mined by former Blackjewel employees is sitting in railcars. The Department of Labor says the coal is “hot goods” and can’t be moved or sold until the workers who mined it are paid for their work.

Last week, the bankruptcy court in West Virginia overseeing the case gave the Labor Department, Blackjewel, and Blackjewel Marketing and Sales (BJMS) — buyer of the disputed coal — until Sept. 23 to submit a series of briefs to the court. A final set of briefs is due Oct. 1.

The judge said he expects to review the documents “swiftly” and rule soon after whether the coal should remain sitting until the Blackjewel workers who mined it are fully paid, or if it can be sold.

BJMS has proposed paying $1.4 million for the coal. The Labor Department says back wages owed to workers directly involved in producing the “hot goods” coal in Kentucky and Virginia totals more than $3 million.

Timeline for Briefs Set in Blackjewel ‘Hot Goods’ Case, Miner Pay Remains Murky

The federal judge presiding over coal operator Blackjewel LLC’s bankruptcy has set a timeline in the “hot goods” dispute over millions of dollars worth of coal sitting in railcars in Kentucky and Virginia.

Frank Volk, chief U.S. bankruptcy judge for the Southern District of West Virginia, gave the Labor Department, Blackjewel and Blackjewel Marketing and Sales (BJMS) — buyer of the disputed coal — until Sept. 23 to submit a series of briefs to the court. A final set of briefs is due Oct. 1.

Volk said he expects to review the documents “swiftly” and rule soon after whether the coal should remain sitting until the Blackjewel workers who mined it are fully paid, or if it can be sold.

While the timeline provides some clarity about the future of the coal in question, Friday’s hearing highlighted continued uncertainty about if and how hundreds of miners across the region will be paid millions of dollars in owed wages.

The Labor Department says the coal is “hot goods.” Under the federal Fair Labor Standard Act, workers must be paid at least minimum wage or the things they produce can’t legally be moved or sold. More than 1,000 former Blackjewel employees across West Virginia, Kentucky and Virginia are still awaiting their final paychecks more than two months after the company declared bankruptcy.

“The FLSA has put the prohibition in place to discourage employers from benefiting from the uncompensated work of the employees,” Samantha Thomas, associate regional solicitor for the Labor Department, told the court during the Friday status hearing. “It’s about making sure that employers that actually abide by the law are not unfairly treated — because here’s BJMS and Blackjewel being able to profit off of the fact that [sic] they’re able to move coal that they didn’t really pay for in terms of workers being paid for their work.”

Volk asked the Department of Labor about its “end game” for the coal sitting on the tracks.

Thomas said that in the case the judge does affirm the coal cannot be moved, the agency would hope Blackjewel, BJMS or “another party” would step up and pay the owed wages so the coal would no longer be considered “hot goods.”

BJMS attorney Sean George told the court it was extremely unlikely BJMS would do that.

“My understanding, candidly with all, is that there is no possibility that BJMS is going to pay more than $1.4 million that it’s agreed to pay,” he said.

BJMS and Blackjewel argue not allowing the coal to be sold deprives the court from using the proceeds to pay creditors, including workers. The two companies have agreed BJMS will pay $1.4 million for the coal, and if sold, have agreed to set the money aside for possible use to pay owed wages. During a hearing earlier this month, the companies also argued the coal is degrading in the railcars and losing value.

“That sounds like the end game is to inflict economic duress on the parties by prohibiting the movement of coal,” said Scott Kane, an attorney with Squire Patton Boggs, representing Blackjewel. “Certainly the debtors will argue that in these particular circumstances, that doesn’t further anyone’s interest, including the interests of the employee creditors, who are owed those FLSA wages.”

In a notice filed Thursday, the Department of Labor noted back wages owed to workers directly involved in producing the “hot goods” coal in Kentucky and Virginia totals more than $3 million.

“In other words, the wages for the uncompensated work that resulted in the production of the hot goods at issue total more than $3 million – more than double the amount Blackjewel and BJMS ask this Court to force DOL to accept and to release the coal,” agency attorneys wrote.

A temporary restraining order against the rail cars in Kentucky issued in district court is set to expire on Sept. 20. The Labor Department said it’s open to shifting the Kentucky railcars to allow work at the nearby mine to restart if approved by a judge.

Sam Petsonk, an attorney representing Appalachian Blackjewel workers, told the court in addition to the train being blocked by court order, dozens of miners, now in their seventh week of protest, are camped on the railroad tracks blocking the train.

“It is miners themselves who continue day by day to also, in their own capacity, apart from the injunction, to block the movement of that train,” he said. “They wanted that action to reflect their intentions and preferences and interests as to whether it is in their interest for this coal to move before the back payment is made.”

The miners have pledged to remain on the tracks until they are paid.

Protesting Blackjewel Miners to Get Some Overdue Pay From Bankruptcy Sale

More than a thousand coal miners left unpaid by the abrupt bankruptcy of Blackjewel mining could soon be getting some – but not all – of the money they are owed.

Dozens of miners have staged a week-long protest on railroad tracks in Kentucky’s Harlan County, blocking delivery of a load of coal from a Blackjewel mine and demanding their pay.

A federal court overseeing the Blackjewel bankruptcy Tuesday concluded the sales of the mining company’s properties and equipment, and buyers have put money toward paying some of the roughly $11.8 million in pay and benefits due to miners in Kentucky, Virginia, and West Virginia, most of whom have been without pay for a month.

“That won’t pay off all of the wages that are due,” labor attorney Sam Petsonk said, “but it’ll be a good downpayment.”

Petsonk, an attorney with West Virginia’s Mountain State Justice, is representing miners from Blackjewel’s eastern division. He said miners will likely get some back wages but full compensation is still far from guaranteed.

“So additional wages and penalties damages that are owed to the workers will have to come through further litigation,” he said.

Protesting miners blocked the tracks in the morning fog.

Presiding Judge Frank Volk approved the sale of the mines in West Virginia, Kentucky, and Virginia. A proposal by Contura Energy for Blackjewel’s two Wyoming surface mines remains unresolved pending federal government approval.

Under an agreement by Kopper Glo Mining LLC to purchase Blackjewel’s Lone Mountain and Black Mountain mines in Kentucky, the company committed to set aside $450,000 to pay former employees owed wages. In addition, the company said it would provide up to $550,000 in additional money to the Kentucky miners from the royalties of the operations at Lone and Black Mountain mining complexes.

The company agreed to pay $6,350,000 cash for the properties as well as royalties for six years totaling more than $9 million. Kopper Glo also agreed to assume responsibility for some bonding liabilities.

Employees at West Virginia’s Pax mine are likely to get their full back wages. Buyer Contura Energy, based in Tennessee, said it will create a $5 million fund to pay the employees what they’re owed.

Rhino Energy LLC paid $850,000 cash and agreed to pay $208,000 in royalties over one year for some of Blackjewel’s Virginia mines.

Requests for comment to both Kopper Glo and Rhino Energy were not immediately answered.

It appears no mine buyers made legal commitments to rehire the Blackjewel workers. However, an attorney for Kopper Glo Mining, which purchased mines in Kentucky, said the company intends to hire at least some Blackjewel employees.

Few Answers For Unpaid Miners After Day One of Blackjewel Sales Hearing

Blackjewel coal miners will have to wait at least another day to learn if the sale of the bankrupt coal company’s mines and equipment will deliver their overdue paychecks.

The U.S. Bankruptcy Court for the Southern District of West Virginia recessed Monday after an all-day hearing that yielded few results. The court is scheduled to resume the hearing Tuesday at 9 a.m.

Presiding Judge Frank Volk approved six bids, however the three main sale proposals for Blackjewel mines in Kentucky, Virginia, West Virginia, and Wyoming remain in limbo.

The approved bids included the sale of two idled metallurgical coal mines in Virginia and a coal load-out and preparation plant in Harlan County, Kentucky, among others.

More than four dozen miners and their supporters traveled from a Kentucky railroad blockade to the West Virginia courtroom. The miners stood quietly in the courtroom in lime green t-shirts that read “Harlan County Strong” and “Pay Miners First and Lawyers Last.” Others at the protest site in Cumberland, Kentucky, listened via conference call to the bankruptcy hearing.

An attorney briefs miners attending the Blackjewel bankruptcy hearing.

“I commend members of the mining profession who joined us this morning and now,” Judge Volk told the court after it returned for the afternoon. “You can make a very powerful statement without saying anything at all.”

Blackjewel owes about $11.8 million dollars in wages and benefits to more than 1,000 Appalachian coal miners who have gone more than a month without pay.

“We wanted some clarity, try to find out if there was a chance of us getting the money that we earned and possibly go back to work,” said former Blackjewel coal preparation plant foreman Derrick Saylor.

Objections Galore

Monday’s sales hearing shared the often chaotic and tense tenor that has characterized much of Blackjewel’s bankruptcy proceedings.

The judge declined to rule on a motion filed Monday morning from the U.S. Department of Labor that sought to keep Blackjewel coal in Harlan County until miners had been paid. The agency argued that transporting coal mined by employees who have not yet been paid for that work violates the Fair Labor Standards Act.

Stephen Lerner, an attorney with Squire Patton Boggs representing Blackjewel, argued the majority of the coal had already been purchased by another party, Blackjewel Marketing and Sales Holdings LLC, and therefore the issue was moot.

Three coal equipment companies also voiced objections to the way Blackjewel is proposing to sell bulldozers and other coal mining equipment.

Miners and supporters at the Kentucky protest site listen to the bankruptcy court hearing.

An attorney for Caterpillar told the court it is owed more than $26 million for equipment located in Appalachia. He expressed concern there may not be enough to pay that debt after sales are completed.

Similarly, several surety bond representatives told the court all cash earned through the sales should be set aside and not spent until a full accounting of Blackjewel’s debts, including millions in environmental reclamation obligations, is made available by the company.

Blackjewel Miners Continue Protest Ahead of Bankruptcy Hearing

Miners left unpaid by the bankrupt Blackjewel coal company say they are prepared to keep up their protest on railroad tracks in Harlan County, Kentucky, where they are blocking delivery of a load of coal. As their protest grows and gains attention, a bankruptcy court hearing on Monday could determine whether and when the miners get their paychecks.

The blockade began simply enough Monday when five out-of-work miners organized via social media to block a coal train leaving one of the Blackjewel facilities.

“If they can move that train, they can get us our money,” miner Shane Smith said.

Miners and supporters hold a meeting along the railroad tracks.

The group grew to nine. Police asked them to clear the tracks but the miners simply moved to a different location and stood their ground. They scrawled a simple message of protest on the cardboard from a pizza box:

“No Pay, We Stay.”

A supporter with a protest sign made from a pizza box.

They played cornhole, the beanbag toss game, on the tracks. More miners and supporters showed up, and donations poured in: food, bottled water, portable toilets, a generator and lights (for more games of cornhole in the night).

The protest has since grown to dozens of miners and supporters, attracted national media attention, and has become a required pilgrimage site for campaigning politicians.

“It’s a little bit of a good feeling of accomplishment but we still ain’t done,” said miner Bobby Sexton. “We’re gonna stay here until we get some answers.”

But the miners are not the only ones looking for answers – and money – from what was the country’s sixth-largest coal mining company. A federal bankruptcy judge will decide who gets their money, and when.

An aerial shot of the encampment that has grown up around the protest site.

Growing Protest

Blackjewel workers have gone without pay since the end of June, when, miners said, paychecks bounced without warning amid a chaotic bankruptcy filing. Backjewel owes more than $11 million in unpaid wages and taxes to roughly 1,100 workers in Kentucky, Virginia, and West Virginia.

But the company also owes tens of millions of dollars in business debts, taxes, mining royalties, and fines for mine safety and land reclamation violations.

During the course of the bankruptcy, federal Judge Frank Volk has expressed sympathy for Blackjewel employees, but has not yet forced the company creditors to pay them.

“The court is concerned about the employees,” Volk said during a July 19 hearing. “Where do they fall in the scheme in respect to recoveries in this case?”

That may become more clear Monday when Volk presides over a sale hearing. Blackjewel’s assets hit the auction block Thursday, Aug. 1. The closed-door process continued Friday.

Looming Decision

Sam Petsonk, an attorney with West Virginia’s Mountain State Justice, is representing miners from Backjewel’s eastern division. He said whether or not miners get paid depends on how much money comes from the sale of Blackjewel’s assets.

“What we need to see out of the auction is adequate proceeds to cover the obligations to the employees who are not returning to work,” he said.

Employee wage claims generally do have some priority in bankruptcy cases, but come below “secured” claims and obligations to the government such as mine reclamation costs, Petsonk said.

He is hopeful unpaid Kentucky miners may be near the top of the list of creditors due to a state law that requires some Kentucky employers to post a performance bond covering wages. Blackjewel didn’t comply with that law.

Protesting Blackjewel miners in Harlan Co., KY

Kentucky Attorney General Andy Beshear has criticized his political rival, Gov. Matt Bevin, for the failure to make Blackjewel secure a bond. Beshear is the Democratic candidate challenging Bevin’s re-election this year.

On Friday Beshear called on Bevin to fire his Labor Cabinet Secretary over the matter.

“His job is to look out for our workers, but he failed to secure the bond from Blackjewel that could have paid the coal miners in Harlan County,” Beshear said at an event in Paducah, Kentucky.

Petsonk said if the proceeds of the sale are not sufficient to pay miners, it could then come from liquidating the company’s remaining assets.

If that isn’t enough, he said, “then we have to look to the we have to look to the liquidation process or to the non-debtor entities like Jeff Hoops personally.”

Hoops is the former Blackjewel CEO who was forced out early in the bankruptcy, when creditors demanded he step down. Hoops is well-known for his philanthropy in the area and is building a resort hotel near his home in Milton, West Virginia. He also has a separate coal entity, Lexington Coal Company.

Reached by phone Tuesday, Hoops said he’s also frustrated by the situation with the unpaid miners.

“I’m as frustrated as they are,” he said. “I no longer work for Blackjewel, I resigned more than a month ago so I have no idea what’s going on there. I’m really sorry that it’s reached this point.”

‘A Real Mess’

Hoops has been the focus of ire for many of the protesting miners, and his name shows up in some unflattering T-shirt slogans. Some industry observers say the company’s management under Hoops’ leadership set the stage for the chaotic bankruptcy and its aftermath.

“Let’s be clear about this,” said Clark Williams-Derry, director of energy finance at the Sightline Institute, a Seattle-based think tank. “Blackjewel was a company that suffered from terrible financial management, just terrible.”

He said the company wasn’t setting aside enough money to pay wages or make its employee retirement plan contributions. And Blackjewel amassed huge debts in back taxes to the federal government and to state and local governments.

“It’s just a mess, just a real mess,” Williams-Derry said.

Near the scene of the miners’ protest in Harlan Co., KY.

He said that is what makes this coal company bankruptcy so much more disruptive than the many others that have roiled the mining industry in recent years. It also complicates the sale of assets in order to recover debts, pay miners, and continue with work at some of the mines.

“Some of these mines are probably just not profitable,” Williams-Derry said, especially those carrying large debts for mine land reclamation. “There may simply be no buyer who’s willing to take on some of these mines and pick up the cost of cleanup.”

The miners in Harlan County say many plan to attend the court hearing Monday to make sure their voices are heard.

Blackjewel Miners Block Railroad to Demand Pay from Bankrupt Coal Company

Some coal miners left without pay by the bankruptcy of coal company Blackjewel LLC are protesting by blocking a coal train in eastern Kentucky.

The stand-off began early Monday when five miners blocked the train from leaving the Cumberland, Kentucky, plant. Despite police asking them to leave, miners spent the night blocking the railroad to protest Blackjewel moving coal while miners have yet to be paid.

Blackjewel miner Bobby Sexton traveled from Corbin, Kentucky, to support his fellow miners who, like himself, have not received their last paycheck from the company, which filed for chapter 11 bankruptcy on July 1.

“We want answers, we want our money, we want paid,” Sexton said. “We’re gonna make a stand.”

Miners assemble on railroad tracks to block a shipment of coal from a Blackjewel mine.

The standoff follows a tumultuous month for the country’s sixth-largest coal producer and its 1,700 employees. Blackjewel controls 24 active coal mines and processing and prep facilities in Kentucky, Virginia, and West Virginia and two large surface mines in Wyoming.

The unfolding bankruptcy proceedings have been chaotic. While most of the company’s Wyoming employees have received back wages, the majority of the company’s 1,110 Appalachian miners have not been paid.

Appalachian employees are owed nearly $11.8 million in payroll and taxes, as well as $1.2 million in employee retirement contributions.

On Friday, a federal bankruptcy court approved a plan by Blackjewel to begin the sale process of the company’s mines and equipment. Tennessee-based Contura Energy Inc. will be the “Stalking Horse Purchaser,” or initial bidder, for three of Blackjewel’s surface mines — the Belle Ayr and Eagle Butte mines in Wyoming and the Pax Mine in Fayette County, West Virginia.

A hearing is set for Saturday to complete all sales.

Fed Up

By mid-morning Tuesday, retired union miners were showing up to the train tracks in solidarity. Food and water donations poured in and many passing cars honked in a show of support.

Stanley Sturgill came from Lynch, Kentucky, to stand with the protesting Blackjewel miners. Sturgill said he’s been a member of the United Mine Workers of America for 41 years and thought it was important to support the non-union workers.

supporter with a protest sign made from a pizza box.

“If the trains get out that’s more money for the company and nothing for the coal miners and they have shafted these coal miners,” he said. “It’s terrible they … left them high and dry. They can’t go to doctors, they can’t eat — that’s why we’re trying to help them.”

Reached by phone, former Blackjewel CEO Jeff Hoops said he’s frustrated too.

A spokesperson for Blackjewel did not respond to a request for comment but instead sent a link to a website with summary updates on the bankruptcy proceedings.

According to a document on the site, Blackjewel received approval Friday for an additional $2.9 million in debtor-in-possession financing which will be used to extend health insurance and workers compensation policies.

The company is also terminating the Blackjewel 401(k) plan “which will make it possible for employees to access their hard-earned savings to the extent necessary,” according to an update document posted on July 30.

Standing Firm

Kentucky state Rep. Adam Bowling, a Republican who represents Bell County and parts of Harlan County, brought sandwiches to the site Tuesday morning. He said state and county resources are flowing to displaced Blackjewel miners, but officials have few options for helping employees get owed wages.

“This should not happen,” he said, adding that he supports the miners’ protest. “The coal mine operators are trying to move the coal that these coal miners actually dug. They’re trying to move it out for the profits and all these guys want is pay for the work that they’ve done.”

Miner Shane Smith drove 74 miles each way to work at Blackjewel’s D-21 mine in Harlan County. Standing on the tracks, the father of six said he scraped together change to travel to the protest.

Smith said he has tried unsuccessfully for weeks to access money in his 401K.

“If they can load a train out they can give us our money,” he said.

He and the other miners said they’re prepared for a long stand. Billy Sexton said he feels he has no choice.

“My family’s hungry, and I’m gonna do whatever it takes to feed them,” Sexton said. “I don’t know if I’ll go home if they don’t pay us. I’ll sit here until whenever.”