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Continuing low oil prices have left tens of thousands of oil workers out of a job. Now, a growing number of oil workers are turning to the courts, saying they weren’t paid fairly even when times were good.
With the exception of a couple weeks in November, 28-year-old oil driller Kody Armajo has been out of work for a year. He has returned home to live with his parents in Riverton, Wyoming.
“I should have saved a lot more,” said Armajo, his long brown hair tied back with a bandanna. “I should be debt free and have thousands in the bank, but I don’t.”
Then one day last winter, Armajo received a letter about a class action lawsuit, saying that his former employer, Precision Drilling, didn’t pay him enough overtime when he worked for it.
“Yeah, I was way surprised, like what the heck is going on?” he said. “I had no idea.”
As oil prices started dropping a year and a half ago, class action lawsuits like Armajo’s jumped in numbers. In Colorado, where he worked, there were nine times as many wage suits against oil and gas companies as there in 2010. In Texas, the biggest oil state, there were nearly 10 times as many lawsuits.
Federal records show oil and gas companies are among the top violators of wage laws – particularly in not paying overtime. The Department of Labor’s Wage and Hour Division was seeing sufficient problems with apparent violations by 2012 to investigate the oil and gas industry in some parts of the country.
Since then, the office has recovered about $40 million in unpaid wages.
“We have found cases where workers were not even paid the minimum wage, because they’re working so many hours,” said Tess Castilleja, Wage and Hour Division planning and review officer. “So the idea that they’re being highly compensated, in some cases, they’re not.”
The biggest case her team has settled, by far, was against oilfield services giant Halliburton this past summer. The investigation found that Halliburton owed about 1,000 workers a total of $18 million.
When asked about the litigation and settlement, Halliburton responded with a statement: “Throughout this process, Halliburton has worked earnestly and cooperatively with the U.S. Department of Labor to equitably resolve this situation.”
“It’s the way the industry operates,” said Brian Gonzales, a Colorado lawyer representing workers in wage cases. “They see what their competitors are doing and they just do the same thing and no one stops to say, ‘Hey this isn’t really compliant with the law.'”
Gonzales said not properly paying overtime is a conscious business decision for a lot of oil companies.
The Department of Labor has about 1,000 investigators nationwide to cover wage laws in every industry, according to a department spokesperson. That could mean a violator has minimal risk of getting caught by the government.
When workers decide to take matters into their own hands and sue their employer, Gonzales said, companies often pay out a fraction of what they saved.
Oil companies and industry representatives did not respond to requests for comment on the spike in wage-related lawsuits. All declined.
Kody Armajo was eventually awarded $6,000 through the class-action lawsuit against his former employer, but that money’s gone now, too. He said he would go right back to work in the oilfield if he could, even knowing there’s a chance he’d get paid less than what he’s owed.
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