Halliburton’s Large Overtime Settlement Followed Self-Disclosure

By Allen Smith Sep 28, 2015
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Turning yourself in to the U.S. Department of Labor (DOL) for wage and hour violations won’t necessarily result in lenient treatment.

Case in point: the DOL socked oil and gas company Halliburton with an $18 million settlement of overtime grievances on Sept. 22, resolving the claims of 1,016 employees nationwide.

“Halliburton self-disclosed its errors and went to the DOL to work out the means for bringing it into full compliance,” said Robert Boonin, an attorney with Dykema in Detroit and Ann Arbor, Mich.

Despite the company’s efforts in discovering and then trying to atone for its errors, the DOL has described the settlement as “one of the largest recoveries of overtime wages in recent years.”

“The DOL has recently taken the position that it needs to routinely impose the maximum penalties possible to have employers comply,” Boonin said.

28 Positions Incorrectly Exempt

“Ignorance is never an excuse for violating the law,” said Betty Campbell, the DOL Wage and Hour Division’s acting southwest regional administrator, in a news release.

Halliburton is headquartered in Houston and has locations around the U.S. and the world, employing more than 70,000 workers. It achieved revenues of $32.9 billion in 2014.

According to the DOL, the oil and gas company incorrectly categorized employees in 28 positions as exempt from overtime. These positions included field service representative, pipe recovery specialist, drilling tech advisor, performing specialist and reliability tech specialist.

“Employers who don’t pay their employees the wages they have earned don’t just hurt their workers, they undercut employers who play by the rules. That’s why we work every day to help level the playing field,” stated Secretary of Labor Thomas Perez.

But Boonin said Halliburton was trying to play by the rules. The company “brought the settlement upon itself by disclosing its internal findings of noncompliance to the DOL,” he remarked. The company had conducted audits and found compliance issues that had inadvertently arisen and needed to be resolved.

Available Penalties

By going after the maximum penalties, the DOL is acting on “misplaced assumptions that most employers are indifferent about compliance,” Boonin remarked. “To the contrary, most employers strive to comply, but the law is nuanced and there are legitimate reasons to disagree as to what’s needed for compliance.”

Under federal law, wage and hour liability includes:

  • Unpaid overtime for two years, or three years if the DOL or a plaintiff proves a willful violation.
  • Liquidated damages in an amount up to the full value of the unpaid overtime (a double-damages provision subject to a lesser amount if an employer can show it acted in good faith).
  • Civil penalties of up to $1,100 per affected employee if the department concludes the violation was repeated or willful.
  • In private litigation, attorneys’ fees and costs if the plaintiffs prevail.

The DOL did not state whether it imposed liquidated damages or penalties on Halliburton.

“Many times, in collective or class actions, each employee in the class may get as little as a few hundred dollars, which is much less than what they claimed they were entitled to when they sued,” Boonin said. Since Halliburton reported the problems on its own, there are no attorneys’ fees factored into the settlement—an advantage of self-reporting even if the settlement amount is high.

In litigated class actions, “the employer may still have to pay hundreds of thousands of dollars towards the employees’ attorneys’ fees, as well as its own attorneys’ fees. Often, the cases seem to become more about those fees than the merits of the claims.”

Allen Smith, J.D., is the manager of workplace law content for SHRM. Follow him @SHRMlegaleditor.

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