By: Emily Allender
On July 1st, dozens of Harlan County coal miners arrived to work just like any average day.[i] However, just three hours into their shift, workers were called out of the mines and sent home.[ii] The reasoning behind the abrupt dismissal for this was simple. Blackjewel, one of the nation’s largest coal producers, declared chapter 11 bankruptcy.[iii] Within days, miners were informed that their latest paychecks had been revoked.[iv] Blackjewel, like several other coal companies, failed to comply with Kentucky state law which requires coal companies to have a reserve bond for workers in the event of a sudden shutdown. With little monitoring by the Kentucky Labor Cabinet, the enforcement of the performance bond for coal miners has been practically nonexistent.[v] In addition to the back pay owed to the miners not only in Kentucky but also Virginia, West Virginia, and Wyoming[vi], Blackjewel faces a penalty of $366,500 for its noncompliance.[vii]
Blackjewel is the fifth coal company in less than a year to declare bankruptcy.[viii] After almost a month without pay, the Harlan County miners received word that Blackjewel planned to move a train carrying about $1.4 million worth of coal from their town.[ix] Several workers headed down to the train to protest its removal.[x] The miners intend to remain in front of the train until they are paid.[xi] It has been almost three months since Blackjewel first declared bankruptcy, and in that time, few solutions have come from the court proceedings taking place mainly in West Virginia.[xii] Despite several companies placing bids at auction for several of Blackjewel’s mines, the coal on the train remains unmoved.[xiii] The current issue before Chief Judge Volk of the Southern District of West Virginia Bankruptcy Court is what to do with the loaded coal?
The United States Department of Labor (DOL) stepped into the bankruptcy proceedings on August 5th, 2019 to ask Chief Judge Volk to halt the transport and transfer of the coal.[xiv] They filed a motion with the court on the grounds that the coal is “hot goods” under the Fair Labor Standards Act (FLSA).[xv] The original restraining order to prevent movement of the train is set to expire on September 20th.[xvi] Chief Judge Volk ordered the DOL and Blackjewel to submit briefs before the court by September 23rd, arguing why the coal should or should not be considered “hot goods.”[xvii]
Blackjewel argues that by not moving and selling the coal, the company is being deprived of profits they could use to pay owed creditors[xviii]. The company has stated that if allowed to move the coal, they would pay $1.4 million for it and use the money to pay the owed back pay to the miners.[xix] However, this plan is contingent upon the sale of the coal, and thus no miner will receive payment until that sale is authorized and completed.[xx] However, not everyone finds Blackjewel’s offer enticing. The DOL countered Blackjewel stating the $1.4 million-dollar sale price would cover only a fraction of affected workers, given that back wages owed to the miners is more than $3 million.
The DOL argues that under the Fair Labor Standards Act, the mined coal was “produced” by the miners and thus the miners have a right to be paid before those produced goods are moved or sold.[xxi] Therefore, the DOL reasons that the FLSA prevents employers like Blackjewel to benefit from their employees without paying.[xxii]
It is unknown what Chief Judge Volk will decide following his review of the filed briefs. However, the plight of the coal miner should not be discounted in this case. Many would agree that miners, not only in Kentucky but in all four of the affected states, deserve to be paid. The DOL is correct that Blackjewel’s offer would not fully compensate the workers for their owed wages. At this point, each of the Kentucky miners is owed between $3,000-$4,000.[xxiii] Allowing Blackjewel to unjustly benefit from their miners would send a message of victory to companies that break the rules, and a message of defeat to miners merely trying to survive.
[i] Carolyn Kormann, The Battle for a Paycheck in Kentucky Coal Country, The New Yorker (Sept. 9, 2019) , https://www.newyorker.com/news/dispatch/the-battle-for-a-paycheck-in-kentucky-coal-country.
[vi] Tim Craig, In Trump country, a group of coal miners rebel over lost jobs, missed paychecks, The Washington Post (Aug. 31, 2019), https://www.washingtonpost.com/national/in-trump-country-a-group-of-coal-miners-rebel-over-lost-jobs-missed-paychecks/2019/08/31/52ee4fbc-cb2e-11e9-a4f3-c081a126de70_story.html?arc404=true
[vii] Wright supra note 6.
[viii] See Ben Gamen, Coal bankruptcies are piling up, Axios (July 19, 2019), https://www.axios.com/coal-bankruptcies-are-piling-up-453158be-2f06-4f33-aa30-d1f8ecc842ec.html.
[ix] Sydney Boles, Inside the Harlan County Coal Miner Protest, Rolling Stone (Sept.3rd, 2019), https://www.rollingstone.com/politics/politics-features/harlan-county-coal-miner-blockade-879324/.
[x] Kormann, supra note 1.
[xiv] Department of Labor requests the halt of Blackjewel coal, wymt (Aug. 5, 2019), https://www.wymt.com/content/news/Department-of-Labor-requests-the-halt-of-Blackjewel-coal-520754291.html
[xv] Brittany Patterson, Timeline for Briefs Set in Blackjewel ‘Hot Goods’ Case, Miner Pay Remains Murky, West Virginia Public Broadcasting (Sept. 13, 2019), https://www.wvpublic.org/post/timeline-briefs-set-blackjewel-hot-goods-case-miner-pay-remains-murky#stream/0
[xxi] Patterson, supra note 19.