Marathon Settles $9M Class Action over Unpaid On-Call Refinery Shifts

Why It Matters

The settlement exposes significant financial and compliance exposure for energy companies, urging them to treat constrained on‑call time as compensable work under California law.

Key Takeaways

• $9M settlement for 748 on‑call refinery workers.
• Unpaid standby deemed potentially compensable under California law.
• Average payout about $8,800 per employee.
• Similar wage cases rising across California refineries.
• Employers must review on‑call policies for liability.

Pulse Analysis

The Los Angeles refinery, Marathon’s flagship plant with a 365,000‑barrel‑per‑day capacity, became the focal point of a $9 million class‑action settlement announced in March 2026. The dispute centered on the company’s “Primary Relief” scheduling, which forced 748 operators and lab technicians to remain on standby for two‑hour windows, ready to report within 90 minutes, yet paid them only when actually called in. Plaintiffs argued that California’s reporting‑time‑pay statutes treat such constrained standby as work time, a claim the court ultimately accepted enough to negotiate a settlement representing roughly 37 percent of the $24 million exposure estimated by the workers.

California’s reporting‑time‑pay law requires employers to compensate employees for a minimum of three hours when they report for work, and courts have increasingly interpreted extensive off‑duty restrictions as compensable. The Marathon case joins a string of recent settlements against major refiners—including Equilon, ExxonMobil and Dow—where on‑call duties were re‑characterized as work. This legal trend reflects a broader shift toward stricter enforcement of wage‑and‑hour protections in the energy sector, where long shifts and standby requirements are commonplace. Companies that ignore these nuances risk multi‑million‑dollar liabilities and reputational damage.

For human‑resources and compliance leaders, the Marathon outcome is a clear signal to audit on‑call policies. Employers should document actual work performed, provide clear compensation structures for standby periods, and consider redesigning shift schedules to minimize unpaid restrictions on employees’ personal time. Engaging with unions early, as Marathon did with the United Steelworkers, can also smooth negotiations and reduce litigation costs. As California continues to set precedent, firms operating nationwide are likely to adopt similar standards, making proactive policy adjustments a prudent investment to avoid future class actions.