A Canadian energy company will have to drill deep into its bank account to pay a $1.8 million settlement for unpaid overtime to a group of salaried employees in Colorado who alleged they were misclassified as exempt from the overtime requirements of the Fair Labor Standards Act (FLSA).
Ensign Energy Services, Inc. provides oilfield services for the North American and international markets and claims to be one of the strongest, fastest-growing energy services companies in the world. In Colorado and elsewhere, they engage in hydraulic fracturing activities, commonly known as fracking.
The plaintiffs in the recently settled federal lawsuit weren’t alone in claiming that Ensign Energy was misclassifying employees to avoid paying overtime. In a three-year span, nearly 60 Ensign Energy workers filed complaints claiming they were misclassified and owed overtime wages for services they performed for the operation.
The FLSA requires that non-exempt employees be paid overtime at a rate of one and one half their regular hourly rates. While many salaried employees are exempt from this requirement, they must meet specific duty-based requirements in order for an employer to claim the exemption. In this case, the plaintiffs argued that their roles did not meet those standards and therefore they should have received the overtime pay required under the FLSA.
A successful plaintiff in a wage and hour lawsuit can obtain back wages, liquidated (double) damages, and reasonable attorneys’ fees and costs for willful violations of the FLSA. Those risks were enough to motivate Ensign Energy to agree to the settlement, pursuant to which $693,000 of the $1.8 million in settlement proceeds will be paid to the plaintiffs’ attorneys. Ensign Energy has declined to comment on the settlement.