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LOOPHOLE: Kentucky Law To Protect Miners’ Wages Expects Coal Companies To Self-Enforce

By  Jeffrey
CUMBERLAND, KENTUCKY - AUGUST 24: Chris Rowe, an unemployed Blackjewel coal miner, shows off stickers that were made for the miners while he mans a blockade of the railroad tracks that lead to the mine where he once worked on August 24, 2019 in Cumberland, Kentucky. More than 300 miners in Harlan County unexpectedly found themselves unemployed when Blackjewel declared bankruptcy and shut down their mining operations.
Photo by Scott Olson/Getty Images

Some coal companies doing business in Kentucky have not complied with a decades-old state law to protect miners’ wages in case of bankruptcy, and there is no regulatory mechanism in place to enforce the policy, according to a recently published report.

The Lexington Herald-Leader obtained records that show “not a single coal company formed in Kentucky within the past five years has posted a bond required by state law” that would ensure workers get paid if operations suddenly shut down. The investigation comes after Blackjewel LLC issued bad checks to hundreds of miners in the state before abruptly filing for bankruptcy on July 1, resulting in lost jobs, overdrawn bank accounts, and an adverse economic impact on an area already ravaged by a declining coal industry.

The report says officials in Republican Governor Matt Bevin’s administration “urged lawmakers last year to pass a bill that would have eliminated the requirement.” However, Bevin has expressed support for upcoming legislation intended to close a recently-publicized enforcement loophole after out-of-work miners began occupying a set of railroad tracks in Harlan County more than five weeks ago. The former Blackjewel employees are blocking nearly 100 train cars loaded with coal that they mined from leaving, vowing to remain until they are paid what they earned.

More from the Herald-Leader:

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. …

Many Kentucky coal companies are exempt from the law because they’ve continuously operated in Kentucky longer than five years, but the Herald-Leader identified a handful that appear to meet the requirements for posting a bond. …

When the newspaper asked the Labor Cabinet for a list of companies in violation, it responded that it does not keep that list “because the cabinet is not required to maintain such a list.”

Kentucky Labor Cabinet Secretary David A. Dickerson has previously described the requirement as self-policing and said not all companies comply.

Democratic Attorney General Andy Beshear, who is attempting to unseat Gov. Bevin in November, lashed out at “the governor’s Labor Cabinet” last week, claiming the agency “may have failed to secure a single bond for any mining company operating in the state.”

Beshear’s office completed a review that found “as many as 30 mining companies should have bonds on file, without which nearly 1,000 mining employees are at risk.”

He demanded that the Labor Cabinet “begin enforcing these bonds to assure no one ever goes through what the Blackjewel miners are going through.”

Cabinet spokesperson Mary Robertson told the Herald-Leader it is curious that Beshear “is just now weighing in with his after-the-fact advice,” adding, “he casts stones for political purposes.”

“Since this law went into effect 33 years ago, it has only allowed the cabinet to issue citations and seek civil penalties against employers who fail to pay the bond, which the cabinet aggressively pursued against Blackjewel,” she said.

Robertson added, the cabinet “is eager to work with the General Assembly to make changes to KRS 337.200 that allow the cabinet to track and enforce performance bond requirements.”

Meanwhile, Democratic Kentucky Senate candidate Amy McGrath recently released a campaign ad accusing Senate Majority Leader Mitch McConnell (R-Ky) of neglecting coal miners. McConnell, who is up for reelection next year, insists his office has been collaborating with the Trump administration to help them.

The U.S. Department of Labor (DOL) filed an emergency motion last month asking a federal bankruptcy judge to halt the movement of Blackjewel coal from Harlan County until the former employees who produced it receive their owed wages. The proposed order by Acting U.S. Secretary of Labor Patrick Pizzella says “the coal is considered ‘hot goods’ and should be prevented from being transported in interstate commerce.” The topic is expected to be addressed at an evidentiary hearing on Wednesday in Charleston, West Virginia. According to WYMT Mountain News, miners at the Harlan County blockade “say they will not leave until they get paid, no matter what the judge rules.”

The shipment was once estimated to be worth $1 million, but lawyers for Blackjewel say the coal is losing value as it degrades from oxidation and becomes more combustible.

Last month, the DOL successfully won a temporary restraining order issued by a federal district court judge preventing Blackjewel from moving coal from three mines in southwest Virginia.

Blackjewel also had coal operations in West Virginia and Wyoming, closing a total of 32 mines across the nation after it filed for bankruptcy nearly two months ago. Approximately 1,700 people lost their jobs.

RELATED: STANDOFF: Kentucky Miners Block Train Loaded With $1 Million Of Coal After Paychecks Bounce

RELATED: Trump Administration Wants Train Loaded With $1 Million Of Coal To Stay Put Until Miners Are Paid

Follow Jeffrey Cawood on Twitter @JeffreyCawood.

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