Supreme Court rules against oil drilling platform workers

National News

The Supreme Court ruled unanimously Monday against workers on oil drilling platforms off California who argued they should be paid for the off-work time they spend on the platform, including sleeping.

The high court said that federal law applies to the workers and doesn’t require them to be paid for nonworking time spent at their work location on the Outer Continental Shelf. The workers had argued that California law, which would require them to be compensated for that time, should apply.

Justice Clarence Thomas said in an opinion that “federal law is the only law” that applies on the Outer Continental Shelf and “there has never been any overlapping state and federal jurisdiction there.” The question, he said, was whether federal law addressed the question of off-work time spent on the oil rig. He said it did and didn’t require the workers to be paid.

The case before the Supreme Court involved Brian Newton, who worked on drilling platforms off California’s coast near Santa Barbara from 2013 to 2015. Like others living and working on the platform, he worked 14-day shifts, spending 12 hours working and 12 hours off work but on standby, where he could not leave the platform.

In 2015, Newton filed a class action lawsuit arguing that his former employer, Parker Drilling, was violating California law by, among other things, failing to pay workers for the time they spent on standby, including the time they spent sleeping.

In making their ruling, the justices had to grapple with a 1953 law called the Outer Continental Shelf Lands Act. It says federal law applies on the Outer Continental Shelf. But the law also says the laws of the adjacent state are federal law to the extent they are “applicable and not inconsistent” with other federal law. If “federal law applies to a particular issue, state law is inapplicable,” Thomas wrote.

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Workers’ Compensation Subrogation of Administrative Fees and Costs

When a worker covered by workers’ compensation makes a claim against a third party, the workers’ compensation insurance retains the right to subrogate against any recovery from that third party for all benefits paid to or on behalf of a claimant injured at work. When subrogating for more than basic medical and indemnity benefits, the Texas workers’ compensation subrogation statute provides that “the net amount recovered by a claimant in a third‑party action shall be used to reimburse the carrier for benefits, including medical benefits that have been paid for the compensable injury.” TX Labor Code § 417.002.

In fact, all 50 states provide for similar subrogation. However, none of them precisely outlines which payments or costs paid by a compensation carrier constitute “compensation” and can be recovered. The result is industry-wide confusion and an ongoing debate and argument with claimants’ attorneys over what can and can’t be included in a carrier’s lien for recovery purposes.

In addition to medical expenses, death benefits, funeral costs and/or indemnity benefits for lost wages and loss of earning capacity resulting from a compensable injury, workers’ compensation insurance carriers also expend considerable dollars for case management costs, medical bill audit fees, rehabilitation benefits, nurse case worker fees, and other similar fees. They also incur other expenses in conjunction with the handling and adjusting of workers’ compensation claims. Workers’ compensation carriers typically assert, of course, that, they are entitled to reimbursement for such expenditures when it recovers its workers’ compensation lien. Injured workers and their attorneys disagree.

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