5th Circuit says jury should decide whether mud engineers are owed overtime pay

Mud engineers that sued the employer for overtime pay won an important victory when a federal appellate court found that they should have their claims decided by a jury.  Two oilfield workers sued their employer for unpaid overtime wages. The Defendants moved for summary judgment and the district court granted summary judgment on the defendant’s affirmative defense that the plaintiffs fell under the administrative exemption of the Fair Labor Standards Act (“FLSA”). However, on appeal, the court found there to be genuine issues of material fact that affect whether the exemption applies, so the court reversed summary judgment. 

Defendant M-I SWACO in Matthew Dewan v. M-I- LLC, No. 16-20182 (Tex.App – 5th Cir. 2017) is an oilfield service company that specializes in engineering drilling-fluid systems and activities designed to improve performance for oil and gas well drilling operations. Drilling Fluid Specialists or “mud-engineers” at M-I manage the drilling-fluid system and interact directly with the customers. Mud-engineers test the mud parameters such as testing the mud’s pH, rheology, weight, and viscosity. A mud-engineer works to ensure properties of drilling mud set forth in the mud plan, which was created by a M-I project engineer.

The FLSA requires an employer to compensate any covered employee who works in excess of 40 hours in a workweek “at a rate not less than one and one-half times the [employee’s] regular rate . . . .” 29 U.S.C. § 207(a)(1). Relevant here, the FLSA excludes from its overtime requirement those employees working “in a bona fide executive, administrative, or professional capacity . . . .” Id. § 213(a)(1). 

Administrative Exemption

For the administrative exemption to apply, the employee must be one

  1. who is “compensated on a salary or fee basis at a rate of not less than $455 per week;”
  2. “whose primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers;” and
  3. “whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.” 29 C.F.R. § 541.200.  In Dewan, the Defendant claimed that the workers were not owed overtime because they fell under the administrative exemption.  

The Plaintiffs in Dewan claimed that they did not have the authority to deviate from the mud plan. The Plaintiffs alleged that their job duties were fundamentally different from the kinds of job duties described by the Department of Labor’s regulations that govern the administrative exemption. The Plaintiffs relied on Elliott v. Dril-Quip, Inc., No. H-14-1743, 2015 WL 7302764 (S.D. Tex. Nov. 18, 2015) where the district court stated that “it is the actual day-to-day activities of the employees that determine whether the employee is exempt, not the labels the employer or employee place on those duties.”

Responsibilities under the Administrative Exemption

There is little evidence that the plaintiffs in Dewan were given “authority to formulate, affect, interpret, or implement management policies or operating practices.” 29 C.F.R. § 541.202(b). The Court reviewed the plaintiff’s responsibilities, which included “the use of skill in applying well-established techniques, procedures or specific standards described in manuals or other sources,” and that they primarily performed “inspector-type duties” consisting of “specialized work along standardized lines involving well- established techniques and procedures, which may have been catalogued and described in manuals or other sources. § 541.202(e); Clark v. Centene Co. of Texas, L.P., 656 F. App’x 688, 692 (5th Cir. 2016) (unpublished) (quoting § 541.203(g)). Notably, the Court of Appeals for the Fifth Circuit found that M-I has not established any plausible argument in its affirmative defense, thereby reversing the summary judgment against the Plaintiffs, a victory for the oilfield workers. 

Dewan is a great example of how oilfield workers are gaining a huge advantage over their employer oilfield companies whereby the workers are entitled to their unpaid overtime wages. If you or a family member or friend have questions regarding whether you might be entitled to additional overtime pay, consider speaking with an experienced overtime attorney. Josh Borsellino is an overtime attorney licensed in Texas that represents workers who have been paid unfairly. Josh fights for the rights of workers that have been denied overtime pay. Josh accepts overtime cases on a contingency basis, meaning that he only gets paid if money is recovered from the company being sued. Josh provides free consultations for anyone with questions about overtime pay. He may be reached at 817.778.8670 or 432.242.7118. 

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