© Reuters. FILE PHOTO: Members of the United Steelworkers (USW) union picket outside Exxon Mobil’s oil refinery amid a contract dispute in Beaumont, Texas, U.S., May 1, 2021. Photo taken on May 1 May 2021. REUTERS/Erwin Seba/File Photo
By Erwin Seba
HOUSTON (Reuters) – A 10-month walkout by union workers at a exxonmobil (NYSE:) was done to save costs and improve profits at the Beaumont, Texas, facility, not to eliminate union representation, an Exxon Mobil official told an administrative judge Monday.
The National Labor Relations Board (NLRB) last year asked the company to compensate the facility’s roughly 650 workers for lost wages during what it called a 10-month “illegal” lockout.
An Exxon spokesman called the complaint “an attempt to overturn decades of labor laws and Supreme Court precedents,” and said Exxon hopes to prevail. Exxon could face millions of dollars in back wages for hourly workers. The NLRB judge is due to rule after hearing from company and United Steelworkers officials.
Union representatives will testify this week. In the past, they have argued that the lockout was unnecessary and designed to decertify or drive out the union at the plant.
“Decertification was never a factor in the lockout,” Exxon attorney Eva Shih said in opening remarks before Administrative Law Judge Jeffrey Wedekind. Operating losses at the facility and previous costs of replacement workers in previous negotiations were behind the lockout and the demand for changes to job and contract terms, she said.
The company had paid about $30 million to have employees on hold for four months after previous contract negotiations dragged on in 2015, he said.
In 2020, as the company began preparing for the subsequent contract, Exxon decided it “could not go back to EMCO mode,” Shih said, referring to standby workers.
That same year, Exxon lost $22 billion overall, partly due to lost demand for its oil and motor fuels due to shutdowns and work-from-home programs tied to stopping the spread of COVID-19, said.
In planning for the 2021 talks, company managers “discussed the need to execute an offensive lockout because they knew the negotiation would be contentious,” Shih said. “The company could not accept the costs and dangers of a possible strike.”
She said it was unprecedented for Exxon to fire workers in the absence of a strike. But possible shutdowns and start-ups of processing units that could stem from a strike posed a high risk.
The union had issued a notice of a possible strike on May 1, 2021, and the company threatened to fire the workers on that date. The union did not call a strike, but Exxon initiated the lockout.
The company also felt it needed to cut costs, Shih said. In 2012, the Beaumont refinery had the worst financial performance of the company’s refineries and faced a potential sale. Exxon instructed plant managers to improve performance in order to be considered for a $2 billion expansion that is now beginning.
