A federal judge presiding in Midland recently ruled in favor of a large class of oilfield workers represented by Borsellino, P.C. seeking unpaid overtime under the Fair Labor Standards Act. In the fifty-eight page ruling, Judge Ezra held: (1) that the Motor Carrier Act exemption did not apply to the workers, and thus they are entitled to overtime pay; (2) that Michael Mayer, the President of Rig Power, the primary defendant, was individually liable as a matter of law for the FLSA violations of Rig Power, (3) that the Defendants had not established as a matter of law that they acted in good faith or without willfulness, thus preserving for trial the issues of whether the plaintiffs can recover liquidated damages and whether the three-year statute of limitations applies to the workers’ claims.
The case, styled Morgan, Et Al v. Rig Power, Et Al, Civil Action No. 7:15-cv-00073-DAE, pending in federal court in Midland, was originally filed in May of 2015 by five current and former field technicians of Rig Power. The workers alleged that they worked more than forty hours per week without being paid overtime as required under FLSA. Rig Power paid them a fixed amount for each day an employee worked more than eight hours, regardless of how many additional hours the employee worked on those days or in a given week. In August of 2015, the workers filed a motion to conditionally certify the collective class, which the Court granted. Eventually, thirty-seven workers joined the class, bringing the total number of workers represented by Borsellino, P.C. in the case to forty-two.
Both sides filed summary judgment motions. On September 1, 2017, Judge Ezra issued an opinion ruling on the parties’ respective motions. Both parties asked the Court to rule as a matter of law on the issue of whether Michael Mayer, the President of Rig Power, was an “employer” of the workers under the Fair Labor Standards Act, and thus was jointly and severally liable for the FLSA violations of Rig Power. The Court, finding that three of the four elements of the economic reality test had been met with respect to Mayer, concluded that Mayer was an employer of the workers as a matter of law, and thus is individually liable for the FLSA violations of Rig Power. The Court also granted summary judgment in favor of M3P, an affiliate company of Rig Power, finding insufficient evidence that M3P exercised enough control over the workers to constitute an “employer” of the workers as that term is used by the FLSA.
The Court next addressed the issue of whether the workers were exempt from overtime pay under the Motor Carrier Act exemption. The Court, relying on the plain language of the Technical Corrections Act of 2008, found that the workers were “covered employees” under the statute and thus were not subject to the Motor Carrier Act exemption and therefore were entitled to overtime pay, denying the Defendants’ summary judgment motion on the Motor Carrier Act exemption and granting the workers’ summary judgment motion on this issue.
Lastly, the Court addressed the summary judgment motions filed by the Defendants with respect to the issues of good faith and willfulness. The Defendants claimed that because the Department of Labor had previously conducted an audit of Rig Power’s Wysox, Pennsylvania office and found the workers to be exempt under the Motor Carrier Act exemption, they did not violate the FLSA willfully, and their actions were done in good faith. However, the Court held that fact issues precluded entry of summary judgment on these issues, finding that the workers had presented evidence that on at least two occasions Rig Power’s HR director raised concerns regarding the workers’ compensation with Rig Power’s President and that he conducted no follow-up, internal investigation or external consultation to ensure that Rig Power was complying with the FLSA. As such, the Court denied the Defendants’ summary judgment motion on these issues.
The case will now be set for trial on the issue of damages. A copy of the Court’s summary judgment order can be found here.