Oil and Gas Company Settles Allegations of Overtime Pay Violations

On Dec. 19, 2018, U.S. District Judge David Cercone issued final approval of a $2.9 million overtime pay settlement between defendant Rice Energy, Inc., and 94 employees.

The lawsuit, originally filed by lead plaintiff Burton W., alleged that the defendant had wrongfully classified workers as “independent contractors” and failed to pay overtime wages, violating both federal and state labor laws. The class action settlement covers workers who were employed as “drilling/completion consultants” between July 8, 2014 and Sept. 19, 2018.

Case Background

Burton, whose duties included the operation of drilling equipment, alleged that he regularly worked more than 40 hours a week. Ultimately, an investigation by the law firm found that he and other class members had been paid a “day rate” and regularly worked 12-hour shifts, seven days a week. Meanwhile, a number of Rice employees were reclassified as “independent contractor[s],” according to a motion for preliminary approval of the settlement.

More Overtime Pay Violations in the Industry

Unfortunately, Rice Energy and its parent company are not the only alleged offenders when it comes to wage and hour violations. Gas and oil workers, as well as those in other industries, have filed a number of class action lawsuits in recent years over wage issues that include:

• misclassification that exempts employees from receiving overtime
• being wrongly classified as independent contractors
• failure to pay earned overtime wages
• failure to pay promised bonuses
• violations of day rate requirements

Industries in which various companies have settled alleged violations include sanitation, manufacturing, health care, transportation and even retail and the entertainment and recreation sectors.

About the FLSA

Overtime pay regulations are governed by provisions of the Fair Labor Standards Act. Unless an employee is exempt, workers who are covered by the law must be paid a rate of at least 150 percent of his or her normal wage for all hours worked beyond that standard 40 per week. This does not apply to weekends or holidays unless those shifts are in excess of 40 hours. While a “work week” may begin on any day of the week (not necessarily a calendar week), the law states that employers may not average hours over two or more weeks. Under normal circumstances, all overtime as defined under the FLSA must be paid on the normal payday for the period for which earned wages are due.

Penalties

In addition to compensation for unpaid wages, an employers who willfully violates overtime pay regulations can be liable for fines of as much as $10,000. Repeat violators can be fined up to $1,100 for each violation.

The judge in the current lawsuit also approved a similar settlement with defendant Rice Energy’s parent company, ETQ Corporation. In a separate action, ETQ employee and lead plaintiff Tejon Adams claimed that he and more than 100 of his fellow workers were misclassified as independent contractors and did not receive overtime wages as required under state and federal law.

The Oil & Gas Overtime Lawsuit is Case No. 2:17-cv-oo945-DSC, U.S. District Court for the District of Western Pennsylvania.

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