Oil field bankruptcies have surged as oil 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 that oil workers are turning to the courts, saying they were not paid fairly even during good times.
As oil prices started dropping a year-and-a-half ago, class-action lawsuits to recover lost wages 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.
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 1,000 workers a total of $18 million.
When asked about the litigation and settlement, Halliburton replied, “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.
“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,’” said Brian Gonzales, who represents workers.
The Department of Labor has about 1,000 investigators nationwide to cover wage laws in every industry, according to a spokesperson. That could mean a violator has minimal risk of getting caught.
When workers decide to sue their employer, Gonzales said, companies often pay out a fraction of what they saved.
For months, Inside Energy tried to get an oil company or industry representative to comment about wage-related lawsuits. All declined.
Dan Boyce is a Denver-based reporter for Inside Energy, a collaborative journalism initiative among public media.
