Oilfield bankruptcies of companies large and small have surged as prices remain at their lowest levels in a decade or more.
But a bankrupt company is not the only way industry workers can be left underpaid.
An Inside Energy analysis shows a growing number of oil workers are turning to the courts, saying they were not paid fairly even when times were good.
As oil prices started dropping a year-and-a-half ago, class-action lawsuits to recover lost wages have spiked dramatically. In Colorado, there were nine times as many wage lawsuits against oil and gas companies in 2015 as there were in 2010.
Federal records show oil and gas companies are among the top violators of wage laws – particularly in not paying overtime.
The U.S. Department of Labor Wage and Hour Division was seeing sufficient problems with apparent violations by 2012 to specifically target the industry in some regions of the country. Since then, the office has recovered about $40 million dollars 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.”
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 from an oil and gas job in Colorado 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, which said that his former employer, Precision Drilling, didn’t pay him enough in overtime when he worked for them. He was eventually awarded $6,000.
“Yeah, I was way surprised, like what the heck is going on? I had no idea,” he said.
The biggest case Castilleja’s team has settled, by far, was against oil field services giant Halliburton last summer. Investigation found that Halliburton owed about a thousand workers a total of $18 million.
When asked by Inside Energy 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.”
One Colorado labor attorney sees a common theme.
“It’s the way the industry operates,” said Brian Gonzales, a Colorado lawyer representing workers in wage cases. “They (oil and gas companies) 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 believes not properly paying overtime is a conscious business decision for some 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.
Inside Energy attempted numerous times over a period of months to get an oil company or industry representative to respond to the spike in wage-related lawsuits. All declined.
Dan Boyce is a Denver-based reporter for Inside Energy, a collaborative journalism initiative among public media with roots in Colorado, Wyoming and North Dakota and growing to include other states. Contact Dan at danboyce@rmpbs.org. The Durango Herald brings you this report in partnership with Rocky Mountain PBS News. Learn more at rmpbs.org/news.
