By Liz Hampton and Erwin Seba
HOUSTON (Reuters) - As the world experimented with working from home, U.S. energy firm Phillips 66 (NYSE:PSX) Co went the other way: it imposed a “work-from-work” policy for staff at its Houston headquarters in May even as the city became a hot spot for the pandemic.
After a brief spike in COVID-19 cases in July, Phillips 66 avoided a major outbreak while remaining nearly fully staffed at its 1.1 million-square-foot Houston campus. The policy also put the company’s white-collar workers on the same footing as refinery staff who were unable to work from home due to the nature of their jobs. Phillips 66 told its employees it hoped to pioneer a safe return to the office that would encourage others to do the same and drive a recovery in demand for gasoline, the company’s main product.
But the decision by the fourth-largest U.S. oil refiner has left some workers feeling bruised and has damaged their views of the company, according to five current and former employees. Those workers said they felt the company put them at risk by filling offices while the virus had yet to be contained and expressed concern that safety measures weren’t sufficiently enforced early on. They also expressed frustration that senior managers were kept safer through private elevators and offices, while many employees worked in open-plan spaces.
Cases of COVID-19 did increase among the company’s office workers and at one point the rate of recorded infections was almost twice that of the per capita rate of Harris County where the headquarters is based. On July 8, 24 headquarters employees were listed as active COVID-19 cases, or 1.04% of the building’s roughly 2,300 workers, according to internal company data reviewed by Reuters. The number of active COVID-19 cases that day in Harris County was at 0.55% of the population, according to state health data and a Reuters calculation.
"They've always said employees' health and welfare came first. Pre-COVID, I would say that was true... Now the attitude is we don't care about you. We just care about our company, our stock price and our dividend," said one of the current employees, who asked not to be identified. By early September, the percentage of employees with the virus was in line with that of Harris County, according to the internal and state data.
Phillips 66 spokesman Dennis Nuss said in a statement that the company is “committed to the safety of everyone who works in our operating facilities and offices.” He said the coronavirus data that the company monitors “supports our decision that our dedicated employees can and have safely returned,” without specifying what that data showed.
Nuss also said the company revised its policies based on feedback provided by employees, including implementing flexible guidelines for families. “Our intent is to not address employees’ feedback through public channels,” he added in the statement.
The experience of Phillips 66 illustrates the challenges companies face in assuring employees that workplaces can be made safe before a vaccine becomes available. The United States, which accounts for the bulk of Phillips 66’s revenue, has seen the death toll from COVID-19 surpass 209,000 and cases are rising in about half the U.S. states.
Phillips 66’s policy contrasts to many other companies that allowed office workers to do their jobs from home, including in the energy sector. Chevron Corp (NYSE:CVX)'s Houston campus has remained at less than 25% occupancy. ConocoPhillips (NYSE:COP) until last week allowed staff at its Houston headquarters to remain at home.
Scott Packard, chief communications officer for Houston's health department, said with Harris County's current COVID-19 threat level, "people should minimize contact with others whenever possible and avoid leaving home except for essential needs." He added that to mitigate risk, "employers should provide telecommuting options to the extent possible and follow public health guidelines," including measures such as providing for social distancing, requiring masks and temperature screenings for essential employees.
One former Phillips 66 employee, a financial professional, said the push by management to bring workers back to the office while rival oil and gas companies allowed employees the option of continuing to work from home contributed to the former employee’s decision to leave the company.
Texas let stay-at-home orders expire in late April and began reopening businesses in phases from May 1.
Phillips 66 employee Bryan Kaus wrote in a May blog post on professional networking website LinkedIn (NYSE:LNKD) that returning to the office had "been good in many ways" as it created a sense of normalcy and optimism. "It was surprising to see a packed elevator, people shaking hands, and eating together," he wrote while encouraging colleagues to wear face masks and follow Phillips' safety measures.
When contacted by Reuters, Kaus said that was his personal opinion and he wasn’t authorized to speak on behalf of the company.
BUSINESS IMPERATIVE
Phillips 66 announced its plan to return to the office in an April 21 email from a human resources executive to its Houston and Oklahoma office campuses. The email came about three weeks after the company’s chief executive, Greg Garland, met with President Donald Trump at the White House.
Garland told employees he viewed their return as key to stemming losses in its oil processing business following an unprecedented drop in demand for gasoline. In a May video to staff, Garland said the company "bled $1.6 billion in cash" in the first quarter and could lose at least as much in the second. It was important for the business to get all workers, not just those at Phillips 66, back to work again, he said. “If people don’t commute, we don’t have a viable business model.”
The company also had very few COVID-19 cases and no workplace transmission that it knew of, Garland added in the video.
When Phillips 66 started returning office workers to its campus on the west side of Houston in early May, there had been 22 confirmed cases of COVID-19 at the company, with 17 of those recovered and back at work, according to a company email reviewed by Reuters. The company has about 14,500 staff globally.
Garland was unavailable to comment, said Nuss.
Phillips 66 said the CEO's meeting with Trump had no relation to its return-to-office planning and that Garland attended in his capacity as the American Petroleum Institute chairman.
The White House, which on April 16 outlined guidelines for a phased reopening of the country, declined to comment on whether the President urged the energy executives to bring back their white-collar employees.
SAFETY MEASURES
By June, Phillips had recalled most of the staff at its headquarters.
Phillips 66's senior vice president of health and safety, Jay Churchill, notified employees in a June 15 email of four cases among headquarters staff. "None of these cases were from contact while in the office," he said, acknowledging one illness stemmed from a business trip where adherence to its COVID-19 protocols were not followed.
The company took steps aimed at keeping employees safe, including issuing guidelines about working safely and requiring training for workers, according to Nuss. It also had daily employee temperature checks, performed contact tracing, required exposed workers to quarantine and internally shared information about the number of COVID-19 cases, the spokesman said.
The internal data reviewed by Reuters shows the company shared with employees a case breakdown by location and at the headquarters by floor.
However, the company’s approach to mask wearing was initially lax and confusing, three of the five current and former employees said.
On June 22, Harris County required face coverings be worn “in a commercial entity or working in areas in a commercial entity that involve close proximity with others,” according to a judge-issued order. That same day, Phillips 66 in an internal notice to headquarters’ employees reiterated its policy, requiring masks on elevators, in food service areas and where employees felt they could not maintain physical distance. "Phillips 66 does not provide goods or services directly to the public at our headquarters office and therefore we will continue with our current guidance," it said in the internal notice, adding staff could don masks where they felt a need for added precaution. One employee said mask wearing was not strictly enforced and that they believed they contracted COVID-19 from a colleague who did not wear a mask in their shared office. "They had a mandatory mask policy, yet my co-worker wouldn’t wear a mask. There was no accountability,” said the person.
Phillips 66 spokesman Nuss said the company spent $400,000 on protective equipment at the headquarters to combat the spread and that the changes to where employees were required to wear face masks reflected evolving guidance from public authorities.
Prior to late June, employees were required to wear face covering in certain areas of the headquarters building and when social distancing wasn’t possible, said Nuss. Currently, the company requires employees to wear a face mask in all public areas with the exception of when at their workspace or in a socially-distanced meeting, he added.
“The change in protocols did not impact the relatively low number of cases in the office, although we believe the more frequent use of face coverings made it easier for employees to remember to utilize them both inside the office and away from the workplace,” Nuss said.
“There have been no cases, before or after we instituted additional face covering use requirements, that resulted from a lack of face coverings,” Nuss said. He also said that in response to employee feedback and changes in public health guidelines the company tightened measures and conducted small-group meetings to “analyze safety controls.”
RISE IN CASES
Cases of COVID-19 among headquarters' staff rose during July as Churchill and other executives maintained there was no evidence the illnesses were spread from colleagues, according to internal emails.
By July 31, there had been 238 confirmed cases across the company since it started keeping track, with 16 active cases at its headquarters, according to the data reviewed by Reuters.
As of September 9, the percentage of cases to staff at the headquarters was 0.26%, with 37 active cases across the company, the data showed. On that day, the rate for the county was 0.27% of the population, state health data showed. There had been 318 cases across the company since its first cases in March, according to the data.
Fuel use remains well below pre-pandemic levels across the globe.
Phillips 66, in its responses to Reuters, said that each company must take the right decision for them and that it “strongly believes that a work-from-work model benefits our company and our employees and, most importantly, can be done safely.”
GRAPHIC: Phillips 66's headquarters rate of COVID-19 cases vs. Harris County link: https://graphics.reuters.com/HEALTH-CORONAVIRUS/bdwpkkqkgpm/
GRAPHIC: Reuters' COVID-19 global tracker link: https://graphics.reuters.com/world-coronavirus-tracker-and-maps/