In bare-knuckle negotiations, Exxon slants view of pandemic to suit its aims

HOUSTON (Reuters) - Exxon Mobil Corp is using the coronavirus to increase its leverage in labor and real estate negotiations by alternately doomsaying and dismissing the pandemic’s consequences, labor sources and lawyers dealing with the company said.

FILE PHOTO: A view of the Exxon Mobil refinery in Baytown, Texas September 15, 2008. A big chunk of U.S. energy production shuttered by Hurricane Ike could recover quickly amid early indications the storm caused only minor to moderate damage to platforms and coastal refineries. REUTERS/Jessica Rinaldi

The largest U.S. oil and gas producer this month told workers in Texas and New Jersey to accept contract offers because they would not find other jobs. In California, Exxon rejected a request to delay a property deal, arguing business could proceed normally despite the pandemic, and threatened to keep the buyer’s down payment when it asked for more time due to the lockdown.

Exxon said it has not used the pandemic to enhance its bargaining position.

“We reject these unwarranted claims and any assertions to the contrary are baseless and without merit,” said Exxon spokesman Todd Spitler.

Exxon is known as a tough negotiator. But the coronavirus has provided new talking points during contract disputes, unions said.

“They said, ‘Take a look out there. If you strike or we lock you out, there are no jobs out there,’” said Ricky Brooks, the head of a United Steelworkers local that represents about 800 refinery, chemical plant and laboratory workers at an Exxon facility in Baytown, Texas.

In New Jersey, negotiators representing employees at Exxon’s Paulsboro Lube Oil Manufacturing plant were told the same thing, said an Independent Oil Workers union member who asked not to be named because he was not authorized to speak publicly.

“Exxon has blatantly and intentionally leveraged COVID-19 as a means to get what they want,” said USW official Brooks.

The company offered Baytown union workers 3.5% and 4% annual raises in the first two years of a three-year contract, said Brooks. The union workers in the refinery and laboratory rejected the deal because Exxon proposed new workers wait 4-1/2 years to achieve pay parity with other workers. It now takes four years.

Philip Hilder, a former federal prosecutor who has faced Exxon in negotiations, said the company has “the ability to wear down their opponents financially and mentally” using its deep pockets to avoid settling. The approach, which he described as “a take-no-prisoners’ view of litigation” is designed to deter opponents and win any contest.

Exxon lawyers this month threatened to cancel a California property deal and keep the down payment when a buyer invoked force majeure to postpone a closing date due to the pandemic. Force majeure clauses are common in the energy industry as a way to suspend contracts during natural and man-man disasters.

The prospective buyer, Pacific Collective LLC, had sought to delay the $4.2 million purchase of the site of a former service station until county, Culver City and Los Angeles’ stay-at-home directives were lifted.

Exxon on Wednesday filed to move the developer’s breach of contract lawsuit to a federal court.

“There are no conditions to closing that exist in the Agreement that cannot be met,” Exxon wrote in a filing submitted to Los Angeles County Superior Court, noting that property permits, inspections and transfers were essential businesses and able to operate.

“The Title Company has also confirmed that, at this time, it is able to close the transaction,” they added.

Reporting by Erwin Seba; writing by Gary McWilliams; Editing by Cynthia Osterman