Michael Strauss just wanted the oil workers to get paid appropriately for their dangerous, demanding jobs. That’s why he filed the lawsuit against their employer. “In our view, it’s a small case,” the California-based labor attorney told me. He never imagined it would attract the attention of powerful oil industry groups and the federal government—or that it would go all the way to the United States Supreme Court.
But it has. And on Tuesday, the Supreme Court will hear arguments in Parker Drilling Management Services vs. Newton, an appeal of Strauss’s class action lawsuit against Parker Drilling, a now-bankrupt offshore oil platform operator. The case seeks back pay for more than 25 employees who lived and worked on island-like structures off the California coast. For 14-day stints, the employees would spend 12 hours per day actively working, and the other 12 hours on “controlled standby”—meaning they could do whatever they wanted on the platform, but could be called back to work at any time. California wage law requires employees to be paid for such “on call” time, but Parker Drilling employees were paid only for their 12-hour active shifts and not for the standby. Ergo the lawsuit.
The case, so far, has gone mostly unnoticed, and in a way, it echoes the entire conversation about offshore drilling in the U.S. As the Trump administration seeks to expand and deregulate the controversial practice, the rest of the country has been largely distracted.
The oil industry, however, is not distracted. They’ve been watching Parker Drilling vs. Newton closely. Now, a coalition of powerful trade associations and companies—including the U.S. Chamber of Commerce, the National Association of Manufacturers, and ExxonMobil—and the federal government are urging the Supreme Court to reverse the lower court’s ruling in favor of the workers, and hold that only federal wage law can apply to oil platforms located on the Outer Continental Shelf, the area of ocean that surrounds the United States, but that is not technically part of any state. The petitioners say the entire oil industry has much to lose—“hundreds of millions,” according to them—if the Supreme Court doesn’t do this. But it also has much to gain if it does.
To understand Parker Drilling vs. Newton, one must also understand what it’s like to work on an offshore oil rig. And Shane Newton—unrelated to the case’s lead plaintiff, Brian Newton—worked on more than 300 of them over the course of 26 years, from 1991 to 2015.
The first thing, Newton said, is that almost every offshore platform operator requires employees to live there while they work. The stints—or “hitches,” as they’re known in the industry—vary in length. “In the Gulf of Mexico, I’d be out there for 6 to 8 weeks at a time,” he said. “But with ExxonMobil, there’s a rule where you have to leave the premises after 14 days.” With Parker Drilling, the mandated stints were 14 days on the platform, followed by 14 days on land.
A platform itself varies in size. “I’ve been on some that’ll handle 30 people, about the size of a good-sized store. Two layers, 50-by-50 feet,” Newton said. “Then I’ve been on some that are the size of a Walmart.” The fixed layout means personal space is generally lacking, and workers almost always share a room unless they’re supervisors. “Most of the time, you’re looking at anywhere from four to twelve [roommates],” Newton said. “The privacy is the biggest issue.”
Make no mistake, though—Newton liked working out there. “What kept me doing it was the constant moving,” he said. “I like getting things done, I like new things, and it didn’t matter being away from home.” Others, however, weren’t as mentally well-equipped for the conditions. “I’ve sent more people on boats going home because they couldn’t handle it than I can count,” he said.
The biggest mental toll is isolation. Newton recalled one co-worker whose pregnant wife went into labor earlier than expected, and who wasn’t able to access a boat in time to get home for the birth. “Instead of seeing his child born, all he could do was hear his child born over the phone,” Newton said. “He never came back to work after that.” Newton himself was unable to rush home when he got a call that his house was on fire in 2010. “It took about 8 to 10 hours before someone could come get me,” he said. His house burned down.
Unlike his co-worker, though, Newton kept going back to work offshore. As a result, his personal relationships suffered. “I’m on my third marriage,” he said. “My son’s 18, and I might have seen him five of those 18 years.” The realization that he had missed much of his son’s life was why Newton ultimately decided to leave the profession in 2015. “Up until then I hadn’t realized I was doing anything wrong,” he said.
Offshore platform work does pay well compared to the average hourly job. Such is a big reason why oil companies and their trade associations say the California plaintiffs in Parker Drilling vs. Newton shouldn’t be paid for their 12-hour on-call shifts. An electrician averages about $30-$35 an hour off the coast of California, Newton said, and about $18 to $26 an hour in the Gulf of Mexico. Workers also tend to save money faster than the average person because they’re not spending while they’re on the platform. They’re not driving to work, going to happy hours, or paying for their own food. And when they’re not actively working, they always have plenty to do, according to the drilling companies. “The platforms are equipped with various amenities for employees to use free of charge, including cable, internet access, and fitness and recreation facilities, allowing employees to engage cost-free in many of the same personal-time activities they enjoy on land,” the groups wrote in one legal brief.
The industry’s rosy picture of life offshore isn’t entirely accurate, however. Yes, some platforms have gyms, according to Newton, but not all of them. The Internet is also a fairly new addition to platform life, and rarely works correctly. And contrary to the picture industry paints, time spent on-call isn’t play time. When they’re not actively on the job, platform workers live with the knowledge that they could have to throw their hard hat back on at any moment—even while they’re sleeping. And they are dealing with a social dynamic that is far from equivalent to the average workers’ free time spent at home.
But even if it were a paradise on oil platforms, Newton said he still thinks workers off the coast of California should be paid for their on-call time because everyone else who works in the state is paid for it. “I give you a fair days’ work, and I’m waiting there on call, and I should be compensated for it,” he said. Newton does not sympathize with oil companies’ sob stories about their bottom lines. “They make a lot of money,” he said. “They should have a little bit to go out to the employees.”
The key point for Andrew Ellison, who’s also representing the workers in Parker Drilling vs. Newton, is fairness. “If they were on land in California, they’d be paid for this work,” he said. “Why, when you cross an arbitrary line in the water, do you cease to be paid for something you would be paid for in California?”
But for the oil industry, the key point is that arbitrary line. Because legally, anything beyond three miles off the California coastline is not California. It’s the Outer Continental Shelf. That’s governed by the Outer Continental Shelf Lands Act—or OCSLA. And OCSLA says out there, federal law applies.
OCSLA also says, however, that the adjacent state’s laws can apply out there as well—but only if they’re “applicable and not inconsistent with” federal law. The workers say California’s wage law meets that standard; the oil industry says it doesn’t. That’s the legal question at the heart of the dispute before the Court, but the decision could also affect the future of the offshore oil industry.
If the Supreme Court were to rule in the workers’ favor, Parker Drilling (now in chapter 11 restructuring) would eventually be forced to pay its former employees for the time they worked on-call. But that wouldn’t be all it would do.
In a brief filed to the high court last year, the oil industry coalition warned of broad financial consequences to its operations if the justices found that California wage law can apply to platforms off its coastline. Any California-based offshore oil company that didn’t previously pay its workers for on-call shifts would be open to lawsuits from workers seeking backpay. That could “inflict hundreds of millions of dollars of liability” on companies. “Such a result would give employees—already generously compensated under existing arrangements—a windfall of backpay, plus interest and penalties,” they wrote.
But the industry coalition also issued another warning: to its own workers. If the Supreme Court didn’t rule in its favor, they wrote, “It is doubtful that employers could offer such generous compensation and benefit terms, if relationships are subject to state-law overtime and other requirements enacted without regard for the unique circumstances of [offshore] work.”
A ruling in Parker Drilling’s favor, on the other hand, could seal the offshore industry off from state wage claims. And depending on how broadly the Supreme Court rules, it could protect much of the industry from other state regulation, as well, whether labor, environmental, or otherwise.
Such potential is likely why the federal government intervened in the case, too. The Trump administration has been hell-bent on expanding and deregulating the offshore oil industry from its earliest days, but has faced strong opposition and roadblocks from coastal states. To solve that problem, the administration has been exploring various ways to take states out of the picture. The Los Angeles Times reported last month, for example, that Trump’s been “quietly laying the groundwork to weaken a decades-old federal law that empowers California and other states to slow and even stop offshore development in federal waters.”
In its Parker Drilling brief, the federal government urged the Supreme Court to rule against the workers, and protect “the federal government’s paramount interests on the Outer Continental Shelf.” Doing so would certainly reduce the oil industry’s liability, and thus their costs. But if the case itself shows one thing, it’s that those costs won’t ever really go away. They’ll just be absorbed by workers who, until now, have been largely invisible.