{"id":13700,"date":"2021-10-12T15:00:01","date_gmt":"2021-10-12T19:00:01","guid":{"rendered":"https:\/\/oilfieldovertime.com\/?p=13700"},"modified":"2021-10-12T15:00:01","modified_gmt":"2021-10-12T19:00:01","slug":"5th-circuit-day-rate-workers-owed-overtime","status":"publish","type":"post","link":"https:\/\/oilfieldovertime.com\/5th-circuit-day-rate-workers-owed-overtime\/","title":{"rendered":"5th Circuit: Day Rate Workers Owed Overtime"},"content":{"rendered":"<p>Whether a day rate constitutes a salary under the FLSA is an issue that has generated substantial debate in the past few years, nowhere more so than in the U.S. Court of Appeals for the Fifth Circuit.<span class=\"Apple-converted-space\">\u00a0 <\/span>The 5th Circuit recently issued its highly-anticipated opinion in <i>Hewitt v. Helix<\/i>, finding that a day rate is not a salary. This issue is important, as many oilfield workers are paid day rates.<span class=\"Apple-converted-space\">\u00a0 <\/span>If a day rate is a salary under the FLSA, such workers would typically be exempt under the highly compensated employee, executive, professional and\/or administrative exemptions.<span class=\"Apple-converted-space\">\u00a0 <\/span>If a day rate is not a salary, such workers are generally entitled to overtime pay. A number of states, energy companies and industry groups filed amici briefs, arguing on the side of exempt status.<span class=\"Apple-converted-space\">\u00a0 <\/span>Among those filing amicus briefs were:<\/p>\n<ul>\n<li>Independent Petroleum Association of America;<\/li>\n<li>States of Mississippi, Louisiana, Alabama, Montana and Utah;<\/li>\n<li>Offshore Operators Committeee; and<\/li>\n<li>Texas Oil &amp; Gas Association.<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<\/ul>\n<p>The Fifth Circuit originally found that a worker paid a day rate was paid on a salary basis, and thus exempt under the highly compensated exemption in <i>Faludi v. U.S. Shell Solutions, LLC,<\/i> 936 F.3d 215, 219-20) (5th Cir. 2019), though it later withdrew this decision and affirmed in favor of the defendant on a different ground.<span class=\"Apple-converted-space\">\u00a0 <\/span>The Fifth Circuit subsequently held that day rate workers did not meet the salary basis requirement in <i>Hewitt v. Helix Energy Sols. Grp., Inc.<\/i>, 983 F.3d 789, 793-94 (5th Cir. 2020), though it subsequently vacated this opinion and granted an <i>en banc <\/i>hearing, which was held on May 25, 2021. On September 9, 2021, the 5th Circuit issued its <i>en banc<\/i> opinion in <i>Hewitt v. Helix<\/i> (\u201c<i>Helix II<\/i>\u201d), finding in a divided opinion (12\u20136), that payment on a day-rate basis \u201c\u2018does not constitute payment on a salary basis\u2019\u201d for the purpose of the highly compensated employee exemption. In addition, the court concluded that, because the employee was paid on a day-rate basis, the employer could not take advantage of the salary-basis test under 29 C.F.R. \u00a7 541.604(b) because the guaranteed salary did not have \u201c\u2018a reasonable relationship\u2019\u201d to the total income earned by the employee. The court concluded that the more than $900 daily rate was not reasonably related to the more than $3,000 the employee earned on average each week. Thus, the employee did not qualify for the exemption.<\/p>\n<p>The majority opinion, its concurrence and dissent sparred over the interpretive method of textualism.<span class=\"Apple-converted-space\">\u00a0 <\/span>The majority opinion relied heavily on the \u201cplain text\u201d of a Department of Labor Regulation &#8211; 29 CFR 541.604(b) in reaching its conclusion.<span class=\"Apple-converted-space\">\u00a0 In concurrence, r<\/span>ejecting the pleas of Helix and amici, Judge Ho stated: \u201cOur job is to follow the text\u2014not to bend the text to avoid perceived negative consequences for the business community. That is not because industry concerns are unimportant. It is because those concerns belong in the political branches, not the courts.\u201d Addressing the amici\u2019s arguments that a ruling for the workers would devastate the oil industry, Judge Ho\u2019s concurrence states, \u201cJustice Scalia once wrote: &#8216;[S]uch questions as \u2018Who wins?\u2019 \u2018Will this decision help future plaintiffs?\u2019 \u2018Will it help future defendants?\u2019 \u2018Is this decision good for the \u2018little guy\u2019?\u2019 \u2018Is it good for business?\u2019 . . . Questions like these are appropriately asked by those who write the laws, <i>but not by those who apply them<\/i>.&#8217;\u201d Judge Ho concluded his concurrence by stating \u201cAmici may be disappointed, but they should not be surprised that the court today rejects their atextualist theories. There\u2019s no such thing as a part-time textualist. If we\u2019re not textualists in every case, then we\u2019re not really textualists at all. We\u2019re not binding ourselves to the text if we follow it only when we like the result. Textualism is either a matter of principle or a talking point. We follow the text where it leads. Here, the text leads the court to side with labor over industry. So be it. I concur.\u201d In dissent, Judge Wiener argued that the majority\u2019s decision was based on a &#8220;skewed version of textualism while ignoring or misapplying the history of the exemptions,\u201d and that it &#8220;contravenes common sense and provides a detailed but ultimately unnecessary and misguided discussion.\u201d Judge Wiener called the decision and \u201cillogical and unexpected result.\u201d<span class=\"Apple-converted-space\">\u00a0 \u00a0<\/span><\/p>\n<p>It is also interesting to look at the judges who ruled in favor and against the oilfield workers in the <i>Helix II<\/i> opinion. Of the twelve that sided with the workers, were: a Regan appointee, a Clinton appointee, a Bush II appointee, three Obama appointees. The remaining six &#8211; <b><i>half of the majority<\/i><\/b> &#8211; were Trump appointees.<span class=\"Apple-converted-space\">\u00a0 <\/span>Of the six dissenters who sided with the employer were: a Regan appointee, a Bush I appointee, three Bush II appointees and a Clinton appointee.<span class=\"Apple-converted-space\">\u00a0 <\/span>So it is fair to say that the Trump appointees were the deciding factor, as all six of them sided with the plaintiff workers on the day rate issue.<span class=\"Apple-converted-space\">\u00a0 <\/span>That is certainly an \u201cunexpected result\u201d &#8211; to borrow a phrase from Judge Wiener\u2019s dissent &#8211; given that former President Trump\u2019s judicial nominees have been characterized as being as the most conservative in modern times, and thus presumably the most hostile to labor positions.<span class=\"Apple-converted-space\">\u00a0 <\/span>Or perhaps the textualism practiced by the Trump appointees is &#8211; as Judge Ho describes &#8211; an interpretive method that is more concerned about the plain text of the laws and regulations than about which side wins or loses.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>At the end of the day, the <i>en banc <\/i>panel reached the correct decision.<span class=\"Apple-converted-space\">\u00a0 <\/span>A day rate is not a salary.<span class=\"Apple-converted-space\">\u00a0 <\/span>A salary is a guaranteed weekly amount that is paid regardless of whether how much or little the employee works that week.<span class=\"Apple-converted-space\">\u00a0 <\/span>This is both the common sense understanding of the term as well as the way it is defined by 29 CFR 541.604(b). Day rates do not work this way &#8211; day rate workers are only paid if and when they work.<span class=\"Apple-converted-space\">\u00a0 <\/span>On the weeks day rate employees do not work, they are paid nothing. Thus, their pay is not guaranteed, and they are therefore not paid a salary under the FLSA. <span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>The upshot of the <i>Helix II<\/i> decision is that any employees paid day rates may be eligible for overtime pay. Day rates are common in the oilfield industry. If you received day rate pay within the past three years, you should contact an experienced overtime attorney as soon as possible to learn of your legal rights. Josh Borsellino is a Texas attorney that represents workers in overtime cases. Call Josh today at 817.908.9861\u00a0or email him by clicking this <a href=\"mailto:josh@dfwcounsel.com?subject=Overtime%20Inquiry\">link<\/a>\u00a0for a free evaluation of your legal matter.<span class=\"Apple-converted-space\">\u00a0 \u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Whether a day rate constitutes a salary under the FLSA is an issue that has generated substantial debate in the past few years, nowhere more so than in the U.S. Court of Appeals for the Fifth Circuit.\u00a0 The 5th Circuit recently issued its highly-anticipated opinion in Hewitt v. Helix, finding that a day rate is&hellip;<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3872,3871,3868,3869],"tags":[],"_links":{"self":[{"href":"https:\/\/oilfieldovertime.com\/wp-json\/wp\/v2\/posts\/13700"}],"collection":[{"href":"https:\/\/oilfieldovertime.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/oilfieldovertime.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/oilfieldovertime.com\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/oilfieldovertime.com\/wp-json\/wp\/v2\/comments?post=13700"}],"version-history":[{"count":0,"href":"https:\/\/oilfieldovertime.com\/wp-json\/wp\/v2\/posts\/13700\/revisions"}],"wp:attachment":[{"href":"https:\/\/oilfieldovertime.com\/wp-json\/wp\/v2\/media?parent=13700"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/oilfieldovertime.com\/wp-json\/wp\/v2\/categories?post=13700"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/oilfieldovertime.com\/wp-json\/wp\/v2\/tags?post=13700"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}