A Gillette employee of Blackjewel LLC has filed a class-action lawsuit against the coal mining company, claiming it failed to give its 1,700 employees proper notice or pay wages and other benefits earned before and after Blackjewel filed for bankruptcy then abruptly shut its mines across the United States.
Those affected include nearly 600 workers at the Eagle Butte and Belle Ayr mines in Campbell County, along with employees at mines in Kentucky, Virginia and West Virginia.
David Engelbrecht is seeking 60 days’ pay and benefits from Blackjewel, which the lawsuit alleges violated workers’ rights under the Worker Adjustment and Retraining Notification Act. The WARN Act requires at least 60 days written notice of a termination, along with paying outstanding wages and other earned benefits, like accrued vacation, according to court documents filed Monday afternoon with the U.S. Bankruptcy Court of the Southern District of West Virginia.
After Blackjewel told employees the morning of July 1 it was filing bankruptcy, employees were told hours later to leave and were locked out of their jobs. The lockout was ordered after Blackjewel had $20 million in emergency financing pulled that was meant to carry the company through a Chapter 11 reorganization.
Because Blackjewel didn’t follow the WARN Act in handling the shutting down of its mines and putting employees out of work, the class action claims they’re entitled to damages equal to 60 days’ worth of lost wages, salaries, commissions, bonuses, accrued holiday pay, accrued vacation pay, 401(k) contributions, health and medical insurance “and other fringe benefits that they would have received or had the benefit of receiving.”
For its Wyoming employees, Blackjewel missed its last regular direct deposit June 28. Instead, former president and CEO Jeff Hoops Sr. flew in hundreds of cashier’s checks to pay workers at the Eagle Butte and Belle Ayr mines. While some initially had problems presenting those cashier’s checks to local banks, those have since been resolved.
At the company’s eastern mines, however, more than 1,000 workers still haven’t been paid wages due June 28. Paper checks that were issued to those employees were floated over the weekend and dependent upon Blackjewel securing the $20 million in financing. When that was pulled at the last minute July 1, the company didn’t have money in its accounts to cover the checks.
By bouncing the paychecks, most of those employees had deposits reversed by their banks.
Stuart Miller, an attorney with the New York law firm of Lankenau & Miller, represents Engelbrecht and the class. He said he’s handled more than 200 WARN act class-action lawsuits and that “we’ve been contacted by many (Blackjewel) employees in the last few days and expect to add more.”
He said if the lawsuit is approved by the court, the class will automatically include all Blackjewel employees unless they specifically opt out of it.
Miller also said that the past week’s happenings with the company’s bankruptcy, shutdown and change in leadership has been unique.
“Usually there’s not much that shocks me,” he said. “But this is a very unusual case.”
One of the more bizarre twists is the letter Hoops Sr. put out July 4 the day after he was forced to resign. In the statement, which was typed in all capital letters, Hoops outlined an alleged plot by his financiers and bank to stage a coup in the company.
Miller said the letter and that Hoops would write it and send it out “just seems bizarre.”
Since last week’s bankruptcy filing and subsequent court hearings, it also was reported that at least the last four employee contributions into their 401(k) and health savings account deductions from their wages wasn’t paid into their retirement and HSAs.
Blackjewel has since secured $5 million in emergency funding and has ousted Hoops and any of his family members. The money isn’t enough to reopen its mines and instead is intended to pay for a few employees to provide security and necessary maintenance at Blackjewel’s shuttered operations.
In a Monday statement to employees, Blackjewel’s new reorganization team said it’s “fully committed to securing the additional financing necessary to resume its normal operations and to bring employees back to work as quickly as possible.”