Lively spied on the United Mine Workers of America in West Virginia and five other states, sometimes while working as a coal miner.
After fatally shooting a striking miner during the Colorado Coalfield War, Lively spent several years working for Baldwin–Felts in the Great Plains before his assignment in Matewan, West Virginia.
The following year, Lively and another Baldwin–Felts operative killed Sid Hatfield, Matewan's pro-union police chief, and his associate Edward Chambers, apparently at the behest of the detective agency.
His participation in three killings, with scant consequences, cemented his reputation as one of the most violent opponents of efforts to unionize the coal fields.
[3] As a youth he was "friendly and persuasive", and became close to Fred Mooney, a future leader of District 17 of the United Mine Workers of America.
[4] Lively joined the United Mine Workers of America in Kanawha County, West Virginia, in 1902, and remained in the union even after his work began with the Baldwin–Felts Detective Agency.
He testified before Congress that he joined the detective agency in late 1912 or early 1913 in Fayette County, West Virginia.
Since miners had little mobility at the time due to their poverty, it is entirely possible that he began work with Baldwin-Felts two years earlier than stated in his testimony.
[9][3][10] In 1914, during the Colorado Coalfield War, Lively fatally shot a striking miner, a Swedish immigrant named Swan Oleen, in a saloon in La Veta.
At the behest of Albert Felts, co-owner of the agency, Lively's stay in the jail was extended to 16 months for information-gathering purposes.
[3][10][11] Lively subsequently pleaded guilty to involuntary manslaughter and was sentenced to ten days in jail, with credit for time served.
After his firing, he was assigned to Williamson, Merrimac and then to Matewan in Mingo County, West Virginia, a scene of labor unrest, drawing a salary of $225 a month plus expenses from Baldwin-Felts.
Other accounts indicate that he was running the restaurant three weeks before the gunfight and continued to operate it until February 1921, when he was called to witness at a trial stemming from the battle.
[3][16][17] Lively was in Charleston, West Virginia, at UMWA headquarters at the time of the battle,[10][18] in which ten men were killed, including seven Baldwin-Felts operatives and several others were wounded.
Lively was now instructed to cultivate friendships with the union participants in the gunfight, and obtain information that would lead to the conviction and execution of Hatfield and the others who were involved in the killing of the Felts brothers.
[21] Lively was among several Baldwin-Felts men who infiltrated the union to obtain information on the Battle of Matewan, but was the only one who was publicly identified.
[3] In July 1921, Lively was called to testify before the United States Senate, where he was sternly questioned by Sen. Kenneth McKellar of Tennessee regarding the practice of agencies infiltrating union organizers.
[28] One of the Baldwin-Felts men fired shots into the granite face of the courthouse and placed the guns in the dead hands of Hatfield and Chambers in order to lay the groundwork for a self-defense claim.
In December 1921, Lively and two other Baldwin-Felts employees, George Pence and William Salters, were acquitted of murder charges in the Chambers killing.
[32] In his biography of Lively, author R. G. Yoho writes that there is "no conclusive proof" that the leadership of Baldwin-Felts conspired to kill Hatfield and Chambers, but that "circumstances and evidence strain credulity to think otherwise."
[34] Lively disappeared from public view after the murder trials, and in 1923 was working as McDowell County Deputy Sheriff and Prohibition officer, a position he acquired in January 1921.
Their marriage was unhappy due to his frequent absences, unfaithfulness and abuse toward his wife and children, which included beatings with a phone cord and locking one son in the cellar.
[42] He maintained the family's residence in Bluefield, West Virginia even while working as a union spy in western states.