ExxonMobil has found itself in hot water after improperly dismissing two of its employees in violation of several statutes of the US Department of Labor’s Occupational Safety and Health Administration (OSHA) Act.
The OSHA in a release yesterday informed that it has ordered ExxonMobil Corp. to immediately reinstate two employees and pay them more than $800,000 in back wages, interest and compensatory damages. A federal whistleblower investigation found the company terminated them illegally after suspecting them of leaking information to the Wall Street Journal.
According to an article in the Washington Post, ExxonMobil had announced unexpectedly bullish targets for pumping oil out of Texas and New Mexico in the spring of 2019, the news sparked confusion for two scientists at the company.
It added that the two scientists, Damian Burch, a mathematician, and Lindsey Gulden, a geoscientist, became alarmed when they began to suspect management was planning to pin what they considered as a potentially fraudulent forecast on them. They complained to ExxonMobil’s human resources investigators that Burch’s team was pressured to doctor data to make it look like the company was poised to generate billions of dollars more in oil than it was, according to interviews and the findings of a Labor Department investigation.
According to the OSHA, in September 2020, the Wall Street Journal had alleged that the global oil-and-gas company may have inflated production estimates and the reported value of oil and gas wells in the Texas Permian Basin. The newspaper reported ExxonMobil’s assumption that drilling speed would increase substantially in the next five years may have been inaccurate. These assumptions were included in company filings with the U.S. Securities and Exchange Commission in 2019.
OSHA’s investigation found ExxonMobil fired two computational scientists who raised concerns about the company’s use of the assumptions in late 2020. The company claimed it terminated one of the scientists for mishandling proprietary company information and the second for having a “negative attitude,” looking for other jobs, and losing the confidence of company management.
OSHA learned that ExxonMobil knew that one of the scientists was a relative of a source quoted in the Wall Street Journal article and had access to the leaked information. The investigation determined that the communication with the newspaper, related to alleged company violations, is protected activity under the Sarbanes-Oxley Act. The act also protects the scientists despite ExxonMobil’s belief that they had access and possibly leaked information to the publication. Neither was revealed as a source for the article.
“ExxonMobil’s actions are unacceptable. The integrity of the U.S. financial system relies on companies to report their financial condition and assets accurately,” said Assistant Secretary for Occupational Safety and Health Doug Parker. “Whistleblower protection is integral to ensuring that financial disclosure laws work. As was the case in this instance, OSHA will aggressively protect the rights of employees who raise concerns related to financial improprieties or potential fraud against shareholders.”
The Washington Post quoted Exxon’s response. “We reject all claims made by the former employees and will defend the company accordingly,” Exxon spokesman Casey Norton said in an email. “The terminations in late 2020 were unrelated to the ill-founded concerns raised by the employees in 2019.”
Further, “As we have stated throughout, we welcome the opportunity to meet with OSHA to provide additional information or witness interviews, as necessary,” Norton wrote. Company officials said the scientists were not fired for blowing the whistle to federal agencies, but for violating company policies.
The company argued that the scientists misunderstood the data and that Exxon was able to exceed targets they disputed. “The employees were neither qualified nor informed enough to offer an opinion, let alone a make a credible complaint,” Norton said.
OSHA’s Whistleblower Protection Program enforces the whistleblower provisions of the Occupational Safety and Health Act and more than 20 whistleblower statutes. These statutes protect employees from retaliation for reporting violations in the workplace.
