Thorny Issues in Using Independent Contractors in Shale Drilling

Most exploration & production (E&P) companies–the ones who risk the money to have oil and gas wells drilled–don’t actually DO the drilling themselves. They hire it done by using oilfield services companies like Schlumberger, Halliburton and Baker Hughes. In addition, they hire just about everyone done–from security at well pads to earth moving to water trucking to you name it. The shale drilling industry, particularly in the Marcellus and Utica, is a bonanza for local businesses or “independent contractors” that plug in to the industry supply chain. However, there are some negatives for E&Ps when it comes to using independent contractors rather than having employees on the payroll do the work. The sharp lawyers at Vorys, Sater, Seymour and Pease say lawsuits alleging violations of the Fair Labor Standards Act are now more common than employment discrimination cases for oil and gas companies. They’ve just issued an alert/advisory on the pros and cons of using independent contractors in the oil and gas industry…

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