A second lawsuit we’re reporting on today that had previously slipped by our usually good radar. A former Cabot Oil & Gas employee filed a lawsuit in October 2017 alleging that he and a number of other “employees” had been stiffed out of overtime payments by Cabot–that Cabot had treated them as independent contractors rather than as employees. The lawsuit was granted class certification.
Ultimately Cabot decided to settle the case, rather than have it drag on for years. The deal struck and approved by the court has Cabot paying ~80 employees $2,307,000 (or an average of $28,837 each), along with paying the lawyers for the plaintiffs an obscene $1,253,000, meaning a total tab of $3.56 million out of pocket for Cabot. The company could have built a second hospital in Montrose with that kind of money, like they did in 2012 (see Cabot Effort Raises $4.4 Million for PA Physicians Clinic). But we digress.
As part of the settlement, Cabot was not declared guilty by the court of violating overtime regulations. Period. This is a “make it go away” payment with no blame attached.
//A Pennsylvania federal judge on Tuesday gave the final okay to a $3.56 million deal to settle a class and collective action claiming Cabot Oil and Gas Corp. stiffed workers out of overtime by misclassifying them as independent contractors.
U.S. District Judge Cathy Bissoon granted former Cabot worker Jackie D. Conley’s motion for final approval of the settlement in his federal Fair Labor Standards Act and Pennsylvania Minimum Wage Act suit, saying the deal would cover just above 80 participating claimants. The judge also granted Conley’s bid for $1.188 million in attorneys’ fees, up to $25,000 in costs class counsel incurred, and up to $25,000 for arbitration costs, as well as his bid to get a $15,000 enhancement payment.
“The court makes no finding or judgment as to the validity of any claims released under the settlement or whether Cabot Oil and Gas Corporation is liable under the Fair Labor Standards Act or any other applicable law,” the judge’s order said.
Conley sued the oil and natural gas exploration and production company in October 2017. He worked for it in Pennsylvania between 2013 and 2015 and had a variety of responsibilities, like operating oilfield machines and doing equipment maintenance, he said.
He argued in his suit that he and other workers routinely worked more than 40 hours a week but were never paid overtime. The company did this, Conley said, by classifying them as independent contractors, only paying them a flat amount for every day they worked.
Conley was classified as such, he claimed, even though Cabot had control over a significant part of what he had to do on the job, and it dictated how much he was paid and even the tools he used. Cabot responded to the complaint last year, denying that it employed Conley and also arguing he failed to state a claim.
He asked for final approval of the deal last month, noting at the time that after a notice was sent out to the class and collective members, there was an “overwhelmingly positive” response. Conley said at the time that the deal was “a reasonable compromise that will adequately compensate the participants for the unpaid overtime hours alleged and will eliminate the need for the parties to engage in protracted and expensive litigation.”
Counsel for the class declined to comment on Tuesday. Representatives for Cabot were not immediately available for comment.*
*Law360 (Apr 2, 2019) – $3.56M Settlement Ends Cabot Misclassification Suit
The official court blessing of the “make it go away” deal:
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