Will Phillips 66’s $5.5M Wage Deal Receive Approval?

by Norman B. Blumenthal on December 20, 2017

blumenthal nordrehaug & bhowmik, southern california employment law, southern california employment law attorneys, wage deal, wage suit, wage and hour lawsuit, wage lawsuit, Phillips 66 wage dealOn Tuesday a California federal judge game preliminary approval for Phillips 66’s $5.5 million settlement. If offered final approval, the settlement will resolve a putative class action alleging the energy company shorted refinery operators’ pay in violation of wage and hour statutes. When offering preliminary approval, the judge did require the parties to adjust the class notice so that it is easier to understand.

U.S. District Judge Yvonne Gonzalez Rogers asked the parties involved to use a specific format to create the class notice during the Oakland, California hearing. The suggested format allows for simple reading and includes all the terms and details of the settlement. The judge has found it to be successful in past settlement cases where she had other parties use the format. It keeps things simple and accessible to all members of the class.

Lead plaintiffs, Kyndl Buzas, Raudel Covarrubias, and Daniel Runions, filed the lawsuit in January. The Defendant, Phillips 66, faces allegations of failing to provide appropriate rest breaks for their oil refinery workers. Instead they offered workers to take “on call” rest breaks. During “on call” rest breaks oil refinery workers were required to keep their radios on. These were the only rest breaks offered during their 12-hour shifts.

As a result of the lack of adequate rest breaks, plaintiffs allege that Phillips 66 failed to pay workers for overtime and failed to keep accurate payroll records. These are in violation of state labor statutes and the Private Attorneys General Act. Plaintiffs also allege that Phillips 66 requires their operators to be on call continuously without rest breaks. This is particularly disturbing as the workers are charged with monitoring the often hazardous and potentially catastrophic oil refining process.

The parties involved agreed on a deal to resolve the matter in which the class counsel would receive up to 25% of the common funds ($1.375 million) in fees and up to $40,000 in costs. The three lead plaintiffs would receive $7,500 each as an incentive award and the company will make a $37,000 payment to the state as resolution of PAGA claims. Approximately 530 class members will receive an average of $5,500 depending on the number of shifts they worked.

Judge Gonzalez Rogers asked parties involved to submit detailed statements from individuals justifying incentive award amounts as well as administration costs as they are higher than she normally approves. She also asked for information on how each class member would be paid their portion of the funds. Legal representation for the workers advised the judge that each class member would receive a customized payment depending on the number of shifts they worked. He also stated that there would not be much variation in the payouts since turnover in the oil refinery workforce hovers around 5-7% annually and most of the class worked an equal number of shifts (720).

The class was conditionally certified for employees working as Phillips 66 operators (three refineries: Rodeo, Santa Maria and Los Angeles) since January 12, 2013. The final approval hearing is scheduled for March 6th. When the suit was filed, Phillips 66 requested an exemption from the state Supreme Court’s interpretation of rest breaks. The California Division of Labor Standards Enforcement granted Phillips 66’s request effective May 22, 2017 through January 31, 2019.

If you have questions regarding statutes governing rest breaks, or the Supreme Court’s interpretation of rest breaks, please get in touch with one of the experienced California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.

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