Claims Under California Labor Laws Settled for $2.3 Million

An offshore petroleum industry contractor recently agreed to pay $2.3 million to resolve claims that it violated California labor laws by keeping employees on offshore rigs.

The settlement has been proposed to resolve a class action lawsuit against Ardent Companies Inc., a subcontractor for Exxon and Freeport McMoRan Oil & Gas. Plaintiffs in the class action lawsuit claimed that Ardent violated the Fair Labor Standards Act (FLSA) and California labor laws through their actions.

The company was accused of failing to pay their employees sufficient wages despite forbidding them to leave offshore oil and gas platforms. Additionally, while meals and lodging were provided to employees, these benefits were reportedly not considered when calculating regular rate of pay and overtime pay.

Workers also claimed that Ardent employees on offshore platforms allegedly had to remain on call during meal breaks, rest breaks, and after their shifts ended. Definitions of what counts as “on call” vary depending on the applicable laws.

Ardent reportedly argued against these class action allegations, claiming that the employees were sufficiently compensated for their work. They company also argued that California labor laws did not apply to their employees because the oil and gas platforms were in federal waters. Additionally, the company claimed that employees were free to leave the platform if the asked to.

Negotiations for the settlement were reportedly impacted by a pending case in the Supreme Court. A Ninth Circuit ruling in Newton v. Parking Drilling Mgmt. Servs. Ltd. reversed a lower court dismissal and upheld the legal standard that California labor law applies to oil platform workers stationed on the Outer Continental Shelf. That case has now been appealed to the Supreme Court. The court’s decision, which is expected in June, would reportedly have had an effect on the case proceeding.

Federal employment laws including FLSA consider an employee to be on call only if they are required to remain onsite.

“An employee who is required to remain on call at home, or who is allowed to leave a message where he/she can be reached, is not working (in most cases) while on call,”the U.S. Department of Labor says. However, the federal authority notes that “additional constraints on the employee’s freedom could require this time to be compensated.”

California laws regarding on call work offer more protection, as is common with labor laws in the Golden State. These laws force employers to pay their employees more frequently with stricter on call definitions.

These laws were reportedly expanded when a state court of appeals determined that workers may be entitled to payment for on call time even if they had not been scheduled to work.

The decision was made in a case that took issue with employees being forced to stay on call and only having two hours of warning before being called into work. Despite being on call, the employees were reportedly not paid unless they were called into work. The court eventually ruled that employees were “reporting for work” at the time that they were called in, meaning that they were entitled to pay.

The Oil Platform Workers On Call Work Class Action Lawsuit is Orozoco v. Ardent Co. Inc., Case No. 2:18-CV-02763, in the U.S. District Court for the Central District of California.

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