With Oil Still In The Doldrums, Wage Theft Claims Have Jumped In Colorado
Bankruptcies of oilfield companies large and small have grown as prices remain at their lowest levels in a decade or more. But company insolvencies aren't the only way a worker can be left underpaid. A growing number of oil workers are turning to the courts, saying they weren't paid fairly — even when times were good.
In Colorado, there were nine times as many wage suits against oil and gas companies in 2015 as there were in 2010.
With the exception of a couple of weeks in November, 28-year-old oil driller Kody Armajo has been out of work for a year. He's back at home, living 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, 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 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.
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's Wage and Hour Division was seeing sufficient problems with apparent violations by 2012 to specifically investigate the oil and gas industry in some parts of the country.
Since then, the office has recovered about $40 million in unpaid wages. Tess Castilleja, a Wage and Hour Division planning and review officer, said they have found cases "where workers were not even paid the minimum wage, because they're working so many hours."
"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. In that case, the investigation found that Halliburton owed about a thousand workers $18 million.
When asked about the litigation and settlement, Halliburton responded with this statement:
"Throughout this process, Halliburton has worked earnestly and cooperatively with the U.S. Department of Labor to equitably resolve this situation."
For Brian Gonzales, a Colorado lawyer representing workers in wage cases, "it's the way the industry operates." He believes not properly paying overtime is a conscious business decision for a lot of oil companies.
"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.'"
The Department of Labor has about 1,000 investigators nationwide covering wage laws in every industry, according to a department representative. 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.
Numerous attempts were made over a period of months to get an oil company or industry representative to respond to the spike in wage-related lawsuits. All declined.
Inside Energy is a public media collaboration, based in Colorado, Wyoming and North Dakota, focusing on the energy industry and its impacts.