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Blackjewel Miners Likely to Receive Pay in DOL Deal

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Photo: Courtesy of Ned Pillersdorf

This article was originally published by Ohio Valley ReSource.

The Department of Labor and a company associated with Blackjewel agreed this week to put nearly $5.75 million toward coal miners left unpaid in the company’s chaotic bankruptcy. 

The July 1 bankruptcy of one of the nation’s largest coal companies left 1,100 coal miners in Kentucky, Virginia and West Virginia out of work and without weeks of pay. The potential deal comes after a nearly two-month-long protest by unpaid miners, who blockaded a railroad to stop over a million dollars worth of coal from leaving Harlan County, Kentucky. The U.S. Department of Labor intervened with a motion supporting the miners’ claim that delivering the coal would violate fair labor standards.

Ned Pillersdorf, an attorney representing miners in Blackjewel’s eastern division, said if the miners’ claims are not resolved soon, Harlan County and neighboring impacted counties could experience recessions in their already tenuous economies. 

While the deal has not been formalized, Pillersdorf said he expects a firm commitment in the coming days. Pillersdorf said in exchange for the backpay, the Department of Labor will withdraw its motion to stop coal from leaving Harlan County over fair labor violations. 

I’m thrilled with the Department of Labor,” Pillersdorf said. “It’s a very positive step, and it sounds like it’s going to happen.”

The funds would likely come from Blackjewel Marketing and Sales Holdings, the entity that owns the approximately $1.4 million in coal the miners blockaded. But BMSH only has one customer: Blackjewel itself. And Blackjewel has long maintained it does not have the funds to compensate its former employees.

“I just hope it covers at least our bounced check,” said David Pratt Jr., a former Blackjewel miner who has not yet been paid for his last weeks of work for the bankrupt firm. 

The Appalachian miners will proceed with claims against Blackjewel regarding their 401(k)s and vacation time, as well as their original wage claims. The agreement with the Department of Labor, however, would reduce the value of that claim. 

A spokesperson for Blackjewel could not immediately answer a request for comment.

Further hearings to finalize the deal and pursue miners’ additional claims are being scheduled for later this month.

Coal hard cash

Murray Energy’s Bankruptcy Could Bring Collapse Of Coal Miners’ Pensions

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Retired Kentucky miner Virgil Stanley at a UMWA rally for pension protections. Photo: Becca Shimmel/Ohio Valley ReSource

This article was originally published by Ohio Valley ReSource.

The recent bankruptcy of Ohio Valley coal giant Murray Energy has renewed fears about the already shaky financial foundations of the pension plan that tens of thousands of miners and their families depend upon.

The seismic collapse of yet another coal employer has lawmakers from the region renewing their push to fix the United Mine Workers pension fund, and has even raised broader concerns about pensions for a range of other trades.

Murray Energy has a substantial footprint across the region. It is also the last major employer contributing to the UMWA pension plan. In its bankruptcy filing, the company reports $2.7 billion in debt and more than $8 billion in obligations under various pension and benefit plans. More information will likely come out as the bankruptcy court takes up the matter.

Bob Murray speaking at an event in October, 2019. Photo: Sydney Boles/Ohio Valley ReSource

Bankruptcy proceedings often take months, and it’s not yet clear if the company will be relieved of its pension obligations. UMWA spokesperson Phil Smith said if recent history is any guide, that is a likely outcome.

“We don’t think any company should be able to be relieved of its responsibility to any retirees, whether they’re in the coal industry or not,” Smith said. “But it has happened in the coal industry time after time after time.”

Smith said if the bankruptcy court relieves Murray’s pension obligations, that could be another $6 billion loss for the UMWA retirement fund.

The UMWA health and retirement fund covers the benefits of retirees whose employers went out of business before 2007. The plan was already facing insolvency by 2022, largely due to the industry’s decline in production and a wave of bankruptcies. Smith said now that Murray Energy has filed for Chapter 11 protection, the fund could become insolvent by next year.

UMWA President Cecil Roberts said much of the problem lies in how bankruptcy courts treat workers’ concerns.

“Why should workers stand in line last? Why should it be beneficial to a CEO or CFO to file bankruptcy?” he said. “They ran the company into the ground, they get rich, the workers lose their health care. Sometimes they lose their job. Sometimes they lose their pensions. That needs to be dealt with.”

Murray Energy is among nearly a dozen coal companies to go bankrupt during the Trump administration, despite the repeated claims of a “coal comeback.” Some lawmakers worry that the combined impact could cause a domino effect for other multi-employer pensions across the country.

“Economic Contagion”

Insolvent plans fall to the Pension Benefit Guaranty Corporation, or PBGC, which is a federal backstop for pension plans. Lawmakers from around the Ohio Valley warn that the fund is also already at risk, and it would be in far more financial trouble if it became responsible for the UMWA plan.

Last year a bipartisan group of lawmakers served on the Joint Select Committee on Solvency of Multi-employer Pensions. The group was tasked with finding a solution to pension problems affecting a range of workers including teamsters, coal miners, ironworkers, and bakers and confectioners.

Sen. Rob Portman, an Ohio Republican on the joint committee, warned at a field hearing last year that if even one of the larger plans becomes insolvent that could put the PBGC at risk as well.

“That wave of bankruptcy has the potential to create an economic contagion effect,” Portman said. “In other words, it would spread around our economy.”

A union miner at the rally for pension protection. Photo: Aaron Payne/Ohio Valley ReSource

But despite the shared concern, the committee missed a self-imposed deadline to come up with a solution and disbanded at the end of the year.

The UMWA’s Smith said more than $1 billion goes into local economies every year from health care benefits and pensions that are paid directly to retirees. More than $130 million flows into Kentucky alone.

Simon Haeder is an assistant professor of public policy at Penn State University. He said shoring up the UMWA pension plan would have been a lot less expensive and more manageable if Congress had started to address the “inevitable” issue much earlier.

“Coal miners are one of those probably worst-case scenarios here,” he said, “because the balance between people paying into the system and people taking out of the system is so out of whack.”

Haeder said the miners’ pension problems also raise questions about whether people can rely on these pension systems in the future. He said the decline in union membership and the complex actions of bankruptcy courts have given employers an edge over the interests of workers when a business goes under.

“Bankruptcy law and bankruptcy court will certainly side with employers much more than they will side with employees,” he said.

A Legislative Fix?

Sen. Joe Manchin and other coal-area lawmakers introduced the American Miners Act to try to shore up the shaky UMWA pension. The West Virginia Democrat’s bill would transfer some money from interest accrued on the federal Abandoned Mine Land fund – which is used to clean up old mining sites – into the mine workers’ pension plan. It would not take money directly from the fund.

Manchin is attaching the American Miners Act to a spending bill that keeps the federal government running. He said most of the pension checks are for $600 a month or less and many of those are going to widows who depend on that money for basic living expenses.

“When coal companies go bankrupt coal miners benefits are at the bottom of the priority list,” Manchin said.

The bill would also restore a tax on coal used to fund the federal Black Lung Disability Trust Fund, which Congress had allowed to be reduced by half last year. Pennsylvania Democratic Sen. Bob Casey is a co-sponsor on the bill.

“I won’t stop fighting until we’ve secured the promised pensions and an extension of the Black Lung Disability Trust Fund for coal miners and their families,” Casey said. “I hope Congressional Republicans will join our mission.”

The Senate bill does not yet have a Republican co-sponsor but there is general bipartisan support for action on the miners’ pensions. In the House, two pending bills propose a similar funding method to shore up the UMWA fund. Republican Rep. David McKinley of West Virginia is the lead sponsor on one of those.

Democratic Rep. Bobby Scott of Virginia proposes a version that also addresses the health care benefits of retirees whose companies went bankrupt last year and have been or will be relieved of those obligations by a bankruptcy court. Both bills have passed out of committee.

But of course one Republican’s voice will matter most, and that is Senate Majority Leader Mitch McConnell of Kentucky.

McConnell’s Call

McConnell had previously postponed action on miners’ pensions by splitting an earlier proposal to address both retirement funds and health benefits. McConnell introduced his own version in 2017, which provided for miners’ health benefits but avoided dealing with pensions.

In an emailed statement, McConnell said he’s concerned about the insolvency issues facing a number of multi-employer pension plans, and that he supports finding a bipartisan solution for pension reform.

It’s not clear when or if the majority leader will take up the issue of coal miners’ pensions or healthcare benefits.

Sen. Joe Manchin (D-WV) and Majority Leader Sen. Mitch McConnell (R-KY). Source: U.S. Senate

The Miners Act and other similar bills have attracted criticism from fiscal conservatives such as the Heritage Foundation. Heritage calls the proposal a “bail out” that would do nothing to “fix the root of the problem” with the large pension plans.

Manchin said he will attach the American Miners Act to every vehicle possible in Congress in the hope that McConnell will agree to take action.

“And Senator McConnell I know he’s concerned about other pensions, we’re all concerned about other pensions, but this is on the front burner now,” Manchin said, adding that if the miners’ pension plan falls it will likely not fall alone. “When this happens, everything else will tumble and snowball with it.”

ReSource reporter Brittany Patterson contributed to this story.

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Coal hard cash

Blackjewel Miners Get More Of Their Pay As Labor Dept. Acts Against Bankrupt Company

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Protesting miners blocked the tracks in the morning fog. Photo: Sydney Boles/Ohio Valley ReSource

This article was originally published by Ohio Valley ReSource.

Coal miners who went without pay when mining company Blackjewel declared bankruptcy this June are one step closer to receiving lost wages. The checks come weeks after some of the miners ended a long-running protest, and months after the federal Department of Labor first intervened to allege the company violated labor laws in the month before it folded.

Rumors of a deal circulated early this month, and in consent orders filed in U.S. district courts in Kentucky and Virginia, Blackjewel committed to pay more than $5 million to miners. 

The bankruptcy drew widespread attention this summer when a group of Blackjewel miners blocked a train full of coal to protest unpaid wages. The protest lasted 59 days and ended after the last remaining miners found work or had to return to other obligations.

According to a press release from Kentucky Gov. Matt Bevin, more than 600 coal miners from Kentucky’s Black Mountain and Lone Mountain mines will receive pay following agreements between the coal company and the Department of Labor.

“This means a whole lot,” said Stacy Rowe, wife of former Blackjewel miner Chris Rowe. “Getting this check, it’s going to pay off some of the bills we owe, and it’s going to get us started when we start driving.” 

Chris Rowe has taken a job as a truck driver since the bankruptcy. Blackjewel owes Chris about $6,000, Stacy said. 

“Today is a great day and one we’ve longed to see come,” said Harlan County Judge Executive Dan Mosley in the release. “My heart is overjoyed for these hardworking folks who took a stand in a professional way to say workers shouldn’t be treated this way.”

“Although we’re certainly relieved that these miners are finally getting paid, it took three and a half months, and that’s far too long,” said Ned Pillersdorf, an attorney who is representing Blackjewel miners in ongoing litigation. 

Pillersdorf says the miners will continue to pursue additional claims against Blackjewel as well as its former CEO. The Kentucky Labor Cabinet said it will continue to pursue litigation against the company for failure to pay a performance bond. 

It is unclear whether the checks scheduled to be delivered to Blackjewel miners will include compensation for lost health care benefits, child support payments, or paid time off.

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Murray Energy CEO Lashes Out At ‘Feckless’ Federal Officials Over Coal Subsidy Plan

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This article was originally published by Ohio Valley ReSource.

Coal executive Bob Murray clashed Monday with federal energy regulators at a Lexington, Kentucky, energy forum over what Murray called a failure by the Federal Energy Regulatory Commission to sufficiently support the struggling coal industry. 

“The word that I’ve been using to describe FERC is feckless,” Murray told the audience, including FERC Chairman Neil Chatterjee. 

Murray wanted FERC, which regulates the wholesale transmission of energy, to enact a Trump Administration proposal that would have subsidized coal-fired power plants and helped keep them competitive with cheaper natural gas. Murray Energy and other coal companies argue that without enough coal in the nation’s fuel mix the electric grid could become unreliable, posing a risk to national security.

“What natural gas is available, you know, it comes in a finite pipe,” Murray said. “People forget that too, that these gas wells aren’t going to last. This glut of gas is not going to last.” 

The proposal was widely criticized and FERC rejected the idea last year. Murray and other coal industry actors viewed that as a failure by FERC to prioritize the resiliency of the power grid to threats from extreme weather events. 

Chatterjee personally invited Murray to speak, knowing that he would be harshly critical. “He was obviously sharply critical of the commission and the decision we made,” Chatterjee said. “And that’s precisely what I hoped to achieve by inviting him here: to start the dialogue.”

FERC and the University of Kentucky Center for Applied Energy Research hosted the event, which Chatterjee called a frank discussion away from the politics of Washington, D.C. Attendees included executives from fossil fuel, nuclear and renewable energy industries, and regulatory agencies from states across the country. They discussed the future of America’s energy mix, “all of the above” strategies and more aggressive action to address climate change, such as the Green New Deal proposal. 

Other coal industry leaders had prominent roles. Alliance Research Partners CEO Joe Craft sat at Chatterjee’s left hand during a buffet-style lunch, and former Peabody Energy executive Fred Palmer took center stage in a panel about retraining displaced coal sector workers. 

The coal industry has struggled in recent years as a mix of efficiency, renewable energy and especially natural gas from fracking have made coal less competitive. Major bankruptcies have shaken the industry, and Bob Murray’s company could be next. Murray Energy has been in the news lately for mounting financial problems, and industry observers anticipate a bankruptcy announcement. Murray Energy is based in Ohio and the company claims to be the country’s largest underground mine company, with about 6,000 employees.

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