American Oil and Gas Reporter - July 2016 - 16

IndustryDigest
not send (UOG) wastewaters to
POTWs."
"This final rule fills a gap in federal
wastewater regulations to ensure the
current industry practice . . . continues
into the future," EPA adds.
The rule, which is to become
effective 60 days after publication in
the Federal Register, may be found at
https://www.epa.gov/eg/unconventional
-oil-and-gas-extraction-effluentguidelines. ❒

Federal Court
Sides With Driller
On WARN Act
TULSA-A federal court has
validated a drilling contractor's
interpretation of the Worker Adjustment
and Retraining Notification (WARN)
Act by counting each of a company's
rigs as a separate work site under the
act.
According to Crowe & Dunlevy,
which argued the case for Latshaw
Drilling Co. LLC, the U.S. District
Court for the Northern District of Texas
has granted Latshaw's motion for
summary judgment, denying the WARN
Act's applicability to the company's
2015 layoffs, meaning Latshaw was not
required to follow that law's
requirements for providing notice to
employees.
The law firm explains that the
WARN Act requires companies with at
least 100 employees to give 60 days'
advance written notice when a layoff or
plant closing affects 50 or more people.

It adds that state agencies and local
municipalities also must be notified,
and that the U.S. Department of Labor
may penalize noncompliant companies
as much as $500 a day.
Crowe & Dunlevy indicates that
Latshaw employed 1,100 employees in
multiple states at the time of its 2015
layoffs, but the court determined that
each of Latshaw's land-based oil rigs
equated to a single site of employment,
at which no more than 24 workers were
employed. Had the court ruled
differently, the firm says, Latshaw
"most likely would have been required
to pay 60 days' wages and benefits to
hundreds of employees, as well as
attorneys' fees to the employees' legal
counsel. Plaintiffs counsel also was
seeking class certification-which was
not granted in light of the case's
dismissal."
According to the firm, the decision
appears to be the first of its kind in the
country, but multiple district court cases
are pending on the WARN Act's
applicability to land-based drilling rigs.
Crowe & Dunlevy filed for summary
judgment before provisional class
certification could be granted and
before discovery was complete.
"This nontraditional approach
resulted in an immediate decision
regarding the seminal issue of whether a
drilling rig is a single site of
employment under the WARN Act, or
whether employees working at drilling
rigs located miles apart should be
combined for purposes of determining
whether WARN Act notification is
required," Crowe & Dunlevy explains.
"The court's finding that consolidation

The California Independent Petroleum Association recognized four
individuals for their contributions to the state's oil and gas industry
at its annual convention, held June 9-12 in Napa, Ca. LEFT: CIPA
Chief Executive Office Rock Zierman (left), presents state Assemblyman
Rudy Salas, D-Bakersﬁeld, with the C.C. "Bud" Albright Award. CENTER: Bart LeFevre (second from left), president of Commercial
Global Insurance Services of California, and Kristen Kang, the com-

16 THE AMERICAN OIL & GAS REPORTER

was not appropriate is beneficial not
only to the oil and gas industry, but also
is instructive for other employers facing
layoffs and/or plant closings involving
multiple sites of employment." ❒

Texas Supreme Court
Rules Against Producer
On Sales Tax Question
AUSTIN, TX.-The Texas Supreme
Court has unanimously rejected an oil
and gas company's claim that tubing
and casing should be eligible for the
state's sales tax exemption covering
manufacturing equipment because they
process hydrocarbons, report the Texas
Alliance of Energy Producers and Texas
Independent Producers & Royalty
Owners Association.
The Alliance quotes Justice Phil
Johnson's opinion in Southwest
Royalties Inc. v. Glenn Hegar,
Comptroller of Public Accounts, in
which the court found no evidence that
tubing and casing changed oil, liquids
and natural gas "other than by being the
vehicle through which they exited the
underground formation and traveled to
the surface."
Instead, the two associations
indicate, the opinion deemed mineral
extraction akin to gathering raw
materials.
According to the Alliance, the court
also determined that the tax statute's
ambiguity made it proper to defer to the
comptroller's interpretation.
Hegar had estimated a ruling in favor
of the operator could have put the state

pany's vice president, accept the Lee McFarland Award from CIPA
Chairman Steve Layton (left) and Zierman. RIGHT: Layton and
Zierman ﬂank Gregory Brown, recipient of the association's Glenn
C. Ferguson Award. Brown is executive vice president, general
counsel and chief administrative office of Breitburn Energy Partners
LP. Convention coverage begins on Page 89.

American Oil and Gas Reporter - July 2016

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