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Offshore Firms to Settle Wage Suit

More than a dozen offshore drilling firms have agreed to pay about $75 million to settle and antitrust lawsuit that alleged fixing of offshore laborers' wages and benefits for three decades.

Up to 60,000 workers or their estates could be affected.

Minor details of the settlement, which was reached last April, were worked out during a hearing in U.S. District Judge Sim Lake's courtroom Thursday.  Final approval will be granted in April.

The 15 groups of companies, representing about 50 affiliated businesses, are essentially the bulk of the offshore firms that primarily drill in the Gulf of Mexico.

The class-action lawsuit filed in August 2000 alleged the companies "conspired to avoid competition amongst them for drilling labor by illegally fixing the wages and benefits paid their drilling employees."

The companies conducted quarterly surveys to ensure that all were adhering to the agreed-upon wages, the suit alleged.  It said the fixed wages meant lower turnover, decreased training costs and the reduced likelihood of widely fluctuationg labor costs.

The affected laborers will receive notice of the settlement by early next year.  Those eligible to participate include all those aboard offshore rigs from drillers and mechanics to the maintenance crew and kitchen staff.

"I'm very proud these workers are going to get this money, they deserve it," said Anthony G. Buzbee, an attorney representing the plaintiffs.

The offshore laborers would likely receive back paychecks by spring.  Each employee's amount will depend on the number who file claims to participate and the amount of time on the job.

Attorneys representing the drilling firms declined to comment or were not available.

Buzbee said offshore employees complained to him last year about their wages, and he found that wages had remained fairly constant over the years despite market trends.

Robert Palmer, chairman and CEO of oil service giant Rowan Cos., testified during previous court proceedings that wages "paid in the offshore drilling industry are 25 percent too low across the board."

Transocean Sedco Forex Inc., one of the largest offshore drillers, agreed to settled for $15 million, the most by any firm named in the suit.  Transocean recently merged with R&B Falcon, also involved in the litigation.

The settlement will cost other firms about $9 million to $600,000.

Pride International Inc., which bills itself as "one of the world's largest drilling contractors," will pay $9 million, Nabors Drilling Inc. $9.7 million.

Marine Drilling will pay out $5 million, Diamond Offshore Inc. $9.5 million and Chiles Offshore Inc. $1 million.

The other firms, whose payouts were not available, include Parker Drilling Offshore Corp., Pool International, Noble Driling, Sundowner, Helmerich & Payne International, Santa Fe International, Cliffs Drilling Co., Enso International Offshore Co. and Atwood Oceanics Inc.

Two experts retained by the defendants in their bid to prevent class certification argued that the wage surveys "can increase competition," records show.

One expert, Michael Keely, testified that "wage suppression could have led to higher-quality individuals leaving the industry, which could have led to lower-quality workers being hired."

Buzbee characterized Keely's arguments that the wage suppression was of benefit to some employees as "silly," according to court records.

One could argue, Buzbee wrote, that "because of wage supression, there was less money for high-cholesterol foods; thus individuals wre benefited by eating more healthy.  The point is that individuals working for supressed wages are damaged."

Attorneys representing the larger firms objected Thursday to paying for the bulk of the notice fees.  If necessary, another hearing will be conducted Nov. 23 to iron out any loose ends in the settlement.

Details of the settlement are set out in the Court's Final Judgment.  For a copy, see below.

Rosanna Ruiz
Houston Chronicle
November 9, 2005
Houston