Labor Secretary Responds to Scrutiny in Blackjewel Case, Issues Violation Notices

Sep 5, 2019

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

Kentucky’s labor secretary is defending his agency’s handling of the Blackjewel fallout.  The company abruptly declared bankruptcy in July, putting hundreds of coal miners out of work and paying them with cold checks. 

Attorney General Andy Beshear last week accused the Labor Cabinet of negligence for not enforcing a law that would have paid the miners.  Coal companies operating in Kentucky five years or less are supposed to pay a performance bond that equals four weeks of pay for its employees if the mine closes. 

Labor Secretary David Dickerson says that under existing law, the Labor Cabint can’t force a mining company to pay.  It can only issue fines, which some companies rather pay than comply with the order.  He refutes Beshear’s claims that the Labor Cabinet has been negligent in bringing other companies into compliance.


“I would not hold any of my predecessors personally responsible for anything that occurred nor do I feel it’s appropriate to say, 'Is this your fault,'"stated Dickerson. "It’s not my fault. It’s not anybody’s fault except Blackjewel’s bad faith operations that they did not comply with state law.”

Secretary Dickerson says when a mining company opens in Kentucky, they file with the Secretary of State’s Office and the Labor Cabinet has no record of new businesses.  Companies are supposed to self-report if they are required to make a bond payment.  Since learning of Blackjewel’s bankruptcy, Dickerson has gone to the Energy and Environment Cabinet to obtain a list of companies granted mining licenses.  Since last month, he says the Labor Cabinet has sent letters to more than 80 mining companies that are believed to be out of compliance.

Dickerson says he’ll work with state lawmakers next year to close some loopholes in the law and one of his ideas is to establish a compliance division within the Labor Cabinet that would enforce the bond requirement similar to how other agencies enforce worker’s compensation rules.

“If a coal company in Kentucky doesn’t have worker’s compensation insurance, our security and compliance division can go to the Energy and Environment Cabinet and inform them the company doesn’t have worker’s compensation insurance, and the Energy and Environment Cabinet immediately issues a mine closure order against that company," explained Dickerson.

Secretary Dickerson says since the Labor Cabinet learned of Blackjewel’s bankruptcy, it fined the company $366,500 for being out of compliance with the performance bond requirement. 

He adds that his agency remains diligent in seeking to recover paychecks that are owed to former Blackjewel workers.  For now, the case is tied up in bankruptcy court.  An evidentiary hearing was scheduled for Wednesday to determine whether the coal on the ground at Blackjewel's shuttered mines is subject to the U.S. Department of Labor's designation of "hot goods," meaning the coal can be sold and the proceeds be used to pay the miners.