With regards to the number of oilfield workers experiencing potential violations of their wage and employment rights, Vaught, who heads Baron & Budd’s Employment Law Group, was quoted as saying “I’ve never seen anything like this.” He and his team of attorneys are currently representing laid-off oil and gas workers in dozens of different cases nationwide.
The FLSA mandates that companies must pay employees at least one and one-half times their regular pay rate for all weeks they work more than 40 hours. Although independent contractors are generally not entitled to receive overtime pay, many oilfield companies label some workers as contractors although they should be considered employees – and as such, entitled to overtime pay and other benefits.
That misclassification has contributed substantially to the rise in litigation.
Vaught said that oilfield-related independent contractor lawsuits are especially pervasive. In many cases, these workers get no benefits whatsoever, such as overtime, health insurance and others, even though the only reason they are labeled as contractors is that companies are trying to get around employment laws to save money. When they are laid off, they often do not apply for unemployment benefits because they are told that independent contractors do not get such benefits. However, those workers should know that, despite the label of independent contractor, they may still be able to get unemployment benefits depending on the facts of their situation.
WARN Act Cases
But the increase in oilfield-related labor litigation is not limited to FLSA and independent contractor cases. Many lawsuits are also being filed due to alleged WARN Act violations.
The WARN Act is a federal law that requires companies with 100 or more employees to provide them 60-day notice of any mass layoffs or plant closures. The advanced notice is required so laid-off workers have enough time to either look for other jobs or get training in another field. Courts describe the WARN Act as being a law to “protect a worker from being told on payday that the plant is closing that afternoon and his stream of income is shut off, though he has to buy groceries for his family that weekend and make a mortgage payment the next week.”
Vaught pointed out one particular example of an oilfield worker who regularly drove to the Bakken Shale in North Dakota from Tennessee (an approximately 2,600-mile round trip) for two-week shifts. According to the article, not only did his employer fail to provide advance notice of a layoff, the company did not even bother to tell him he was out of work until he had yet again driven to North Dakota.
As Vaught said, when people are treated that badly, they are more likely to do something about it.