HOUSTON (CN) – A staffing company claims in a federal racketeering lawsuit that a Houston offshore oil services firm saved more than $850,000 in labor costs by hiring foreigners, flouting federal law that mandates the hiring of American workers for jobs in U.S. waters.
Houston-based Vertex Services supplies workers to dismantle and install oil rigs and pipelines in the Gulf of Mexico.
Vertex sued TETRA Technologies Inc. and TETRA Applied Technologies on Thursday in Houston federal court. Founded in 1981, TETRA employs hundreds of workers on six continents.
Vertex claims in the lawsuit it contracted with TETRA to supply workers for three TETRA derrick barges—large vessels equipped with cranes.
U.S. maritime law requires all crew members of vessels operating within the U.S. Outer Continental Shelf to be U.S. citizens or permanent residents, but no more than 25 percent can be residents, according to the lawsuit.
The U.S. Coast Guard can give companies waivers to hire foreigners, but only after the employer can show it made a substantial effort to find American workers.
Vertex says the Coast Guard holds employers to high standards to qualify for the exemption.
At least 30 days before a project’s start date, an employer must give the Coast Guard documentation showing it advertised the jobs in “widely circulated” U.S. newspapers for at least three days, put the openings in at least one edition of an energy industry trade magazine, and documented all applicants, according to the complaint.
“Included should be, by position, a summation of numbers of applications received, numbers of interviews granted, numbers hired, and reasons workers were not qualified,” the lawsuit states.
Vertex claims after it renewed its staffing contract with TETRA in January 2014, it repeatedly offered to staff TETRA’s barges with Americans, but TETRA opted to hire foreigners from Vertex instead because they were much cheaper.
Vertex says in June 2014, TETRA leased the DB-1, a derrick barge, for a project in the gulf and applied for a Coast Guard exemption to staff the vessel with foreigners, even though Americans were available for the project that had recently worked for TETRA on another barge.
“TETRA claimed to the U.S. Coast Guard that no American workers were available for the project involving the DB-1. The projected savings from using illegal workers during this project was $9,600.00 per day. The project lasted over 90 days,” the complaint states.
Vertex says at a December 2015 meeting at TETRA’s suburban Houston headquarters that it told TETRA it could staff a barge, the TETRA Hedron, with Americans.
But TETRA allegedly declined the offer, again snubbing federal law in the interest of its bottom line.
“The use of foreign personnel on the TETRA Hedron allowed the company to save approximately $19,000.00 per day on that vessel alone,” the lawsuit states.
Vertex sued TETRA for alleged violations of the Racketeer Influenced and Corrupt Organizations Act and the Immigration and Nationality Act. It is represented by Francis Spagnoletti in Houston.
A TETRA spokeswoman declined to respond to the lawsuit’s allegations on Friday.
“While we do not discuss ongoing litigation, TETRA Technologies is committed to operating at the highest regulatory, safety and technical industry standards and best practices in accordance with the laws of every country in which we operate,” Rebecca Elliott said in a statement.
The Offshore Marine Service Association is a New Orleans-based trade group composed of more than 225 companies. It represents offshore oil drillers before Congress and federal regulators.
Its president Aaron Smith did not respond by press time Monday when asked about the prevalence of foreign labor in the U.S. offshore industry and if there’s a shortage of American workers for such jobs.