Blackjewel files for chapter 11 in a move critics say is increasingly used to avoid paying workers what they are owed

On 1 July, Missy Cole was notified by her bank that her husband’s most recent paycheck had bounced, leaving their account more than $1,000 in the red. Her husband had worked as a coalminer for nearly three years at one of the eastern Kentucky mines operated by Revelation Energy affiliate Blackjewel mining.

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But both companies had filed for chapter 11 bankruptcy, a financial move that has implications far beyond just laying off staff as the ex-workers now wait for bankruptcy proceedings to play out. Critics say the move is a ploy increasingly used in the struggling industry to avoid paying workers what they are owed.

“A layoff is always expected with miners. It’s always in the back of your mind and it’s no surprise when it happens in the coal industry. But this is much more than a layoff,” Cole told the Guardian.

“We have absolutely no access to our bank accounts. Those accounts are still negative, and falling deeper into the negative daily. We cannot even touch his 401(k) to withdraw money to survive on without the signature of the Blackjewel mining CEO or his personnel.”

One of the largest coalmining operators in the United States, Blackjewel abruptly shut its mines after filing for bankruptcy, jeopardizing the jobs of about 1,700 workers in Virginia, West Virginia, Kentucky and Wyoming.

Workers are still unsure if they will be permitted to return to work and for how long, if they will be paid for bounced checks and what will happen to their health insurance and benefits.

“It’s been very hard, not knowing if your going to be able to put food on the table for your three kids,” said Mark Turner, a Kentucky miner at a Blackjewel-operated mine. He’s unsure how he is going to afford his upcoming house payment, electric bill or buy clothes and supplies for his children with the new school year approaching.

Jimmy Justus, 22, a mine worker for Blackjewel in Virginia, owes his bank more than $1,400 because his last paycheck bounced.

“Now my account has been closed,” he said. On 1 July, Justus was sent home under the impression work would restart the next day, but then heard from co-workers the company had filed for bankruptcy. “The day-shift foreman had no intention of telling anyone anything.”

Another coal worker in Virginia, Mark Atwell, was on vacation with his family at Dollywood when he discovered his last paycheck had bounced. “I had no money to feed my family or even gas to get back home on,” Atwell said, who has three children and a disabled wife.

According to the bankruptcy filing, Blackjewel mining has at least $500m owed in liabilities. A worker in Wyoming has filed a class action lawsuit against the company, which claims the company failed to give employees’ proper notice, and wages and benefits earned before and after the bankruptcy filing.

Blackjewel is the third large US coal company to declare bankruptcy since May 2019, despite promises from Donald Trump that he would save the coal industry and its jobs.

Since Trump took office, about 2,000 jobs have been added to the coal industry, which currently employs an estimated 53,000 workers. The industry has shed more than 30,000 jobs in the past decade, driven by automation and changes in the energy industry, as renewable sources recently surpassed coal production for the first time ever in the US, and natural gas production hit a record high in 2018.

Through filing bankruptcies, attorneys who have represented coalminers argue current laws allow operators to avoid obligations they have to workers.

“It is especially egregious where Blackjewel bounces paychecks to the employees. This compounds with the loss of health insurance and other benefits,” said Jack Jacobs, an Alabama-based attorney who has represented workers in black lung cases. “The miners work very hard and sacrifice a lot for these operators. Very frustrating to see how their loyalty is repaid.”

Attorney Shannon Anderson with the Powder River Basin Resource Council in Wyoming condemned the management of Blackjewel by its CEO, Jeff Hoops, who was recently forced to resign.

Hoops did not respond to a request for comment.

Anderson said: “Hoops was buying up distressed assets from bankruptcies and companies trying to offload mines that were no longer economically viable, and basically created a coal company with those assets.”

Facebook Twitter Pinterest The Eagle Butte mine in in Gillette, Wyoming, abruptly closed. Photograph: Josh Galemore/AP

She said several Blackjewel-operated mines in Appalachia racked up various environmental violations and citations as the company operated at a loss and tried to keep costs as low as possible.

She added: “None of these mines were making money and he was paying himself before any of the lenders, and basically running these mines at very low cost.”

Because Blackjewel LLC is privately owned, Anderson noted there is less public disclosure into what’s going on with the company, leaving many questions unanswered for workers, their communities and if Hoops will be held accountable.

“All the information we’re getting is more or less off of social media and other co-workers in other states,” said Joe Williamson, a Blackjewel coal worker in Virginia.

Hoops resigned as a condition for a $5m emergency loan, though his multimillion-dollar plans to build a resort in West Virginia will reportedly not be impacted by the bankruptcy. In a letter to workers, Hoops claimed “no one is hurting more than me” as a result of the bankruptcy.

Few workers agree.

“Our paychecks bounced,” said Jeffery Cochran, a coalminer in Kentucky who has worked at a Blackjewel-operated mine for nearly four years.

“Some people have been denied unemployment which is owed to us. He didn’t pay into it for some people, but yet he can build a $30m resort, and doesn’t have to pay us.”

A representative for Blackjewel shared a press release issued on 10 July that noted about 140 employees have returned to work, and they would be paid for prior and future work, but did not address bounced checks for employees outside of Wyoming or the fees workers are accruing due to bounced checks and late bill payments.