CHEYENNE — Half a dozen bankruptcies have rocked Wyoming coal country since 2015, the latest of which ground two of the nation’s largest coal mines to a temporary halt last summer. State lawmakers on Monday advanced a pair of bills drafted in direct response to the bankruptcy of coal operator Blackjewel and others in the Powder River Basin.
The proposed legislation aims to address the legal predicaments faced by workers and county governments in the harrowing months following Blackjewel’s collapse.
When Blackjewel filed for bankruptcy on July 1, it owed over 500 miners hundreds of thousands of dollars in unpaid wages and benefi ts. But only a few dozen workers ultimately filed wage claims for the compensation the insolvent company owed them. Several workers chose not to pursue a claim out of concern the company would retaliate against them, according to the Labor Standards Office in the Wyoming Department of Workforce Services. Many workers feared for their job.
Under current law, Wyoming labor statutes do not protect workers who file wage claims from employer retaliation. House Bill 132 — approved by the committee Monday — would add an anti-retaliation requirement to protect employees who choose to file a claim.
But that’s not all. The bill will move to the floor with the inclusion of some additional worker protections from another draft labor bill: House Bill 131.
Lawmakers initially introduced House Bill 131 to allow the Labor Standards Office to pursue an investigation into a company’s wage or employee records in the event of a bankruptcy. That’s because when Blackjewel slid into bankruptcy, the Labor Standards Office had difficulty collecting the company records needed to fight on behalf of workers.
Though House Bill 131 was ultimately laid back Monday by the committee, some elements of the legislation will be combined with House Bill 132, the anti-retaliation legislation. Together, the bills could create a mechanism for the Department of Workforce Services to investigate and resolve more unpaid wage claims if additional bankruptcies occur.
While lawmakers noted the hybrid bill still needed work, the legislation passed introduction by a near-unanimous vote Monday in the House Committee on Minerals, Business and Economic Development. When it moves to the floor later this week, the bill will likely be subject to a number of amendments to clean up the language and merge both bills together.
But Michael Duff, a University of Wyoming law professor specializing in bankruptcy, remains skeptical.
“I don’t think any of these bills are likely to be effective in assisting workers in recovering wages during the bankruptcy process,” he stated.
Instead, he encouraged the state to set up a performance bond requirement for new coal companies. The state could draw on the fund to compensate workers for lost wages in the event a company suddenly goes bankrupt.
“I think the most effective thing the state could do would be to establish a performance bond requirement like Kentucky,” Duff explained. “This is your rainy day fund for workers who may be left high and dry if the company files for bankruptcy.”
Located in the heart of the Powder River Basin, Campbell County also contended with its own suite of hurdles during the heat of last summer’s wave of coal bankruptcies.
Another piece of legislation discussed Monday would provide counties with expert representation when entering into bankruptcy litigation against an out-of-state operator.
Counties could face millions of dollars in legal costs if they continue fighting bankrupt companies in court down the road, according to Johnson County Commissioner Bill Novotny. And counties typically recover only about 18 percent of what they’re owed in the average bankruptcy proceeding.
House Bill 181, which cleared committee by unanimous vote, would permit the state attorney general’s office to step in and offer its support to legal efforts against bankrupt companies. It’s a “common sense” partnership that could allow the state to represent both local governments and itself in securing unpaid tax revenues shirked by bankrupt companies, lawmakers said.
“It’s kind of soft, but at least it opens an avenue for a discussion,” said House Majority Leader Eric Barlow, R-Gillette. “With the previous attorney general, there wasn’t even an interest in having that discussion, and that’s something my county commissioners have dealt with.”
Attorney General Bridget Hill’s office helped develop the legislation and supported the measure Monday. She explained that there have been a number of cases where counties have requested assistance from the state attorney general’s office but lacked the statutory ability to help.
While Hill noted there may be some inherent conflicts created when counties and the state battle over the same pool of money, Novotny – speaking on behalf of the Wyoming County Commissioner’s Association – said it was critical to stand with municipalities in-need of legal aid in their battles against large, multi-million dollar companies.
“We think it’s critical that the A.G.’s office is willing to stand shoulder-to-shoulder with the counties who are dealing with this,” Novotny said.
Wyoming lawmakers launched a committee last year to ensure the state is better prepared if more bankruptcies rock the Powder River Basin. One of the committee’s goals included improving protections for workers in the event a mining company falls into Chapter 11. The bills discussed Monday emerged from the Select Committee on Coal and Mineral Bankruptcies during the interim session.