Baker Hughes 2014 Annual Report Download - page 44

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During 2014, we investigated customer notifications related to a possible equipment failure in a natural gas
storage system in the Europe/Africa/Russia Caspian region, which includes certain of our products. We are
currently investigating the cause of the possible failure and, if necessary, possible repair and replacement options
for our products. Similar products were utilized in other natural gas storage systems for this and other customers.
At this time, we are not able to predict whether our products will need to be repaired or replaced and are not able to
reasonably estimate the impact, if any, such repairs or replacements or other damages would have on our financial
position, results of operations or cash flows.
We are a defendant in various labor claims including the following matters. On April 28, 2014, a collective
action lawsuit alleging that we failed to pay class of workers overtime in compliance with the Fair Labor Standards
Act ("FLSA") was filed titled Michael Ciamillo, individually, etc., et al. vs. Baker Hughes Incorporated in the U.S.
District Court for the District of Alaska (“Ciamillo”). During the fourth quarter of 2014, the parties agreed to settle the
Ciamillo lawsuit, including certain state law claims, for $5 million, subject to final court approval. On December 10,
2013, a class and collective action lawsuit alleging that we failed to pay a nationwide class of workers overtime in
compliance with the FLSA and certain state laws was filed titled Lea et al. v. Baker Hughes, Inc. in the U.S. District
Court for the Southern District of Texas, Galveston Division ("Lea"). During the second quarter of 2014, the parties
agreed to settle the Lea lawsuit, subject to final court approval, and we recorded a charge of $62 million, which
includes the Lea settlement amount and associated costs and an amount for settlement of another wage and hour
lawsuit. On October 21, 2013, a collective action lawsuit alleging that we failed to pay a class of workers overtime
in compliance with the FLSA was filed titled Zamora et al. v. Baker Hughes Incorporated in the U.S. District Court for
the Southern District of Texas, Corpus Christi Division (“Zamora”). In October of 2014, the parties agreed to settle
the Zamora lawsuit for an amount that was not material to our financial position, results of operations or cash flows.
On May 30, 2013, we received a Civil Investigative Demand ("CID") from the U.S. Department of Justice
("DOJ") pursuant to the Antitrust Civil Process Act. The CID seeks documents and information from us for the
period from May 29, 2011 through the date of the CID in connection with a DOJ investigation related to pressure
pumping services in the U.S. We are working with the DOJ to provide the requested documents and information.
We are not able to predict what action, if any, might be taken in the future by the DOJ or other governmental
authorities as a result of the investigation.
We were among several unrelated companies who received a subpoena from the Office of the New York
Attorney General, dated June 17, 2011. The subpoena we received sought information and documents relating to,
among other things, natural gas development and hydraulic fracturing, and we have responded.
ITEM 4. MINE SAFETY DISCLOSURES
Our barite mining operations, in support of our drilling fluids products and services business, are subject to
regulation by the federal Mine Safety and Health Administration under the Federal Mine Safety and Health Act of
1977. Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the
Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit
95 to this report.