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Drop in oil prices leaves loose ends

Some laid off workers fighting back with lawsuits

The Columbian
Published:
2 Photos
Abel Nino plays pool with his 4-year-old son, Santiago Nino, at their home on Monday, Feb. 16, 2015, in Little Elm, Texas. Nino, 36, was laid off from his oil field job with Patterson-UTI Drilling Company earlier this month. (G.J.
Abel Nino plays pool with his 4-year-old son, Santiago Nino, at their home on Monday, Feb. 16, 2015, in Little Elm, Texas. Nino, 36, was laid off from his oil field job with Patterson-UTI Drilling Company earlier this month. (G.J. McCarthy/Dallas Morning News/TNS) Photo Gallery

DALLAS — The drive from Ken Mercer’s home in Tennessee to the oil fields of western North Dakota takes 20 hours if you drive straight through.

Every month, Mercer, an Army veteran who served in Iraq, would make the trip as part of his two-weeks-on, two-weeks-off hitch with the Houston oilfield services company Patterson-UTI. Rotating 12-hour shifts aboard a drilling rig, Mercer worked day and night until it was time to go home, rest and do it all again. That was until one day he arrived at the equipment yard after driving from Tennessee to be informed along with 50 other workers that he was being let go, according to a lawsuit Mercer and another worker filed in federal court in Houston earlier this month.

So goes an oil boom that is sending workers packing almost as quickly as it drew a couple hundred thousand of them back to the oil fields. In locales where not long ago a vacant apartment could command big-city rents, drilling rigs are piling up in equipment yards. As the layoff announcements mount — 6,400 at Halliburton, 9,000 at Schlumberger — a five-year-long hiring boom that earned workers six-figure salaries and had companies jumping over each other to hire even unskilled workers is collapsing.

With oil prices half what they were seven months ago, the tables have turned. The Federal Reserve Bank of Dallas is predicting 140,000 jobs in Texas alone could be lost by next year if crude prices don’t rebound.

As more pink slips flow across office towers and equipment yards, some are fighting back.

In Dallas, attorney Allen Vaught has amassed hundreds of clients among the laid-off ranks and has filed lawsuits against companies including Patterson-UTI and smaller firms GoFrac in Fort Worth and Brazos Rock in Weatherford.

“Oil fields are not unionized. This is an industry that has come to believe this is a workforce we can do with what we want,” Vaught said.

The workers are claiming violations of a federal law requiring larger employers to give at least 60 days’ notice ahead of layoffs. Within the law, there is an exemption for layoffs caused by “unforeseeable business circumstances.” And the sudden drop in crude prices is likely to be a part of any defense.

A spokesman for Patterson emailed, “We believe the lawsuit is without merit, and we intend to defend ourselves vigorously. We value the contributions made by our team members and regret that current market conditions have required these actions.”

Working drilling rigs has always been a feast-or-famine trade. Some veterans who have been around long enough to remember the oil price crashes of the 1980s preach thrift and savings during flush times in preparation for the next downturn.

But this latest boom has brought a whole new generation into the fields. As drilling ramped up, companies needed far more workers than the industry employed. So they increased salaries to fantastic levels, drawing workers from around the country who’d never seen a drilling rig.

According to federal employment data, the number of people working directly for the U.S. oil and gas industry, as opposed to those who are classified as “supporting” the oil and gas industry, was almost 200,000 in January.

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