Massey Energy Case

Presenters:
Theresa Chong
Kathrene Genosa
Tracy Leung

Chitra Ramdoyal
Brian Harrison
Kelvin Ling

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Case analysis
Underlying issues
Concepts
Application to the case
Alternatives and evaluation
Conclusion

Company: Massey Energy

Founded in 1920 by A. T Massey and started as a
coal brokering business in Richmond, VA
produces, processes and sells coal

Competitors: Arch Coal, CONSOL Energy and

Peabody Energy

Known for several lawsuits, bad environmental

record and poor mine safety. Past cases:

deaths of miners
waterway pollution in Kentucky and West Virginia
mine placement near schools

Upper Big Branch: Massey Coal Mine

Located in Raleigh County, West Virginia
In production for
Coal mining is one of the key industries in
West Virginia
Don Blankenship, CEO responsible for this case

Event

April 5, 2010: Mine explosion disaster at UBB mine

29 workers killed
Greatest mine disaster since 1970s
Company is being sued for homicide (federal and state)

Prior to explosion

Signs of danger
Wrong direction of air flow of deadly gases and coal dust
Workers told not to worry
Whistle blowing was not present

Internal environment

Vertical structure, hierarchy

Workers conform to rules and regulations (loyal)

Don Blankenship
Massey President, CEO and Chairman (since 1992)
Recently stepped down December 30, 2010
Money and profit goal orientated
1100 safety violations in the past
three years
"If any of you have been asked by your group presidents, your
supervisors, engineers or anyone else to do anything other than run
coal you need to ignore them and run coal. This memo is necessary
only because we seem not to understand that coal pays the bills." Don Blankenship

Everett Hager
Superintendent
Told Massey workers not to worry about the
unsafe conditions
Possible involvement with company politics
Terry Moore
Mine Foreman
Felt unsafe about the mine conditions

brought issue to superintendant

Almost internal whistleblower

wanted to remain loyal

consequences of losing his job

Workers/Miners
Without a union
Psychological instinct

pressure to obey instructions

Community
Successful local business owners
Coal is the only thing that brings money into the
area
Did not do much to raise issue about poor working
conditions, assuming:

lack of knowledge of conditions in the mind

did not want to lose those jobs

Frame of reference: sustainability, economic ties

MSHA
Safety governmental agency
Flagged Massey Energy Co. for not
obeying standards
Frame of reference: politics
Shareholders
Investors of the company
Interested in revenues, profits

Should Massey Energy be held liable

or responsible for the death of the
mine workers?

Whistle-blowing
Rights of employees within a firm
Equal treatment
Employee duties
Unions
The right to strike

Changes in society which partially caused this

problem

The economic downtown which causes the town to

depend on the mines as a major source of income.

there has been a lack of internal whistle-blowing since

employees did not want to risk loosing their jobs due to
this economic downturn
The MSHA did not want to lose a section of the major
source of income of the West Virginia state, the coal
industry
Massey sued MSHA because they needed better ventilation
MSHA confuted by saying that the equipment Massey
wanted to use for ventilation only increased coal
production which Harvey denied

Workers have rights, but also have tasks they were

hired to do
Varies for every job position but there are basic
obligations that apply to every worker

For example, morally obligated to follow moral law, and

legally bound to civil law

Employees must think about the good of the

company that they work for.

For example, should not work/leak secrets to the

competitor

Often, workers are told more often what they must do

rather
than their rights so workers learn their expectations
quicker
than knowing when their rights are violated.

"No one is morally obliged to do what is immoral"

Corporations expect that workers are obedient and
follow
orders as they are told to.
But limits to which orders to follow - moral or
immoral?
However, habitual obedience occurs often.
Possibility why miners at the Upper Big Branch mine
obeyed orders even though they knew that their
safety was compromised

Stems from the rights of individuals to attain

their own goals and rights to associate with
others to achieve common ends

Unrestricted membership for workers to a

union

Morally obligated to protect the interests of

members

Prioritizes good for all workers before good of

society

Almost no mention of the miners' union,

United Mine Workers of America, in the
Upper Big Branch articles

Unions should have renegotiated until

working conditions have been improved
for the miners in the Upper Big Branch
mine

Possibility of corruption within the union,

threats and intimidation

Freedom to refuse employment under certain

conditions

Exceptions: for example, national army

draft

Two moral restrictions:

Respect for valid contract

Consideration of rights of general public to
necessities of life

 Striking

employees run the risk of being

replaced

Techniques to ensure that employees are

not replaced

For example, solidarity of workers

Ceasing

mining would not be lifethreatening

Non-public sector industry

 Varying

definition depending on moral

values and point of view
Several types:

Internal
Personal
Governmental
Non-governmental, impersonal, external

Popular

references to whistle blowing:

Erin Brockovich

Determining moral status of whistle-blowing

Five conditions that, if satisfied, change the moral
status of whistle blowing:

Civil right: legal right that entitles each person

covered by them to certain treatment or that
guarantee non-interference in their acting in
certain ways

Moral right: does not have to be based on law,

but a moral right may also be a civil right.

"If you have construction jobs at your mine that need to be done
to keep it safe or productive, make every effort to do thos jobs
without taking members and equipment from the coal producing
sections that pay the bills"
- From Don Blankenship's memo

Employees only have rights and duties that they

negotiate with their employers as conditions of
employment. However,

This can be misleading

bounded not only by law but by by moral obligations
and other conditions such as local custom and existing
social circumstances in which the contract is made

Rights of employees who are more skilled than

others- they demand certain rights and
privileges

The Central Ethical Dilemma

Negligence about miners' safety- money over safety?

Miners' safety at the workplace is a moral right even if

it is not explicitly mentioned in the conditions of
employment

By whistle-blowing, we are ensuring that these rights

are protected

Internal whistle blowing occurred but was ignored even

though it was permissible and morally justified
"When questioned, Terry Moore, mine foreman, said he knew
of [the] condition and that he asked Everett Hager,
superintendent, about it and he was told not to worry about it

Our solutions are based on the goal of saving

workers and the communityrather than
punishing
theexecutives because:
1.

corporate personhood (corporation shield)

2.

it is hard to see who is to blame for what

3.

ultimately if we hurt the executives then we

hurt the workers

MSHA use power to enforce existing

regulations:
More frequent & detailed inspections

increase budget
Surprise checkups

MSHA

in closer contact with miners

MSHA reps working at company to act as +

support whistle blowers

Change the mentality of the company

Help subsidize the proper safety
equipment
Harsher laws and greater penalties

Give incentives to change

Meetings/mine tours every quarter

Improve
Shorten

Law system
the appeal process

Unite miners across to prevent another

tragedy
Annually/semi annually conference with
union reps from all over the country
Closer ties to union (UMWA)
Increase exposure of current issues
Ads
Social

media

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Stricter enforcement (MSHA)

New regulations and law(government)
Change industry culture(union)

Industry evolution (union)

There is limit of what MSHA and
Government can do
Miners should take charge over their
own health and safety
Correspond to the key ethical issues
Focuses on the whole industry

 Address

the dependency of community

balance between economy and safety issues

Case

is an on-going process
Ethical issues in this cases apply to other
businesses as well
Employees have to step up against
immoral actions