Toolpusher Not Exempt From Over-Time Pay Under FLSA Highly Compensated Employees Are Not Exempt
Hewitt v. Helix Energy Sols. Grp., 2020 U.S. App. LEXIS 40236 *; __ F.3d __; 2020 WL 7488207 (Dec. 21, 2020)
The opinion of the Fifth Circuit released on December 21, 2020 withdraws and replaces its previous opinion in the same matter dated April 20, 2020 (Hewitt v. Helix Energy Sols. Grp., Inc., 956 F.3d 341 [5th Cir. 2020]). The court consisted of the same panel, Judges, Wiener, Higginson and Ho. In the initial opinion written by Judge Ho, all three panel members agreed to reverse the trial court’s grant of Summary Judgment in favor of Helix. In the noted opinion also written by Judge Ho, Judge Wiener dissented though the court also reversed the trial court and remanded the case for further proceedings.
The issue before the court was whether a toolpusher employed by Helix was exempt from over-time pay under the Fair Labor Standards Act. (29 U.S.C. § 207[a]) He was paid a day rate and earned over $200,000 annually (2020 U.S. App. LEXIS 40236 * at 3) and worked 40 hours per week each hitch which lasted a month. (Id. at * 4) The regulations promulgated under the FLSA, allow an employee paid on an hourly, daily or shift basis to be exempt from over-time pay if two requirements are met: “if the employment arrangement also includes a guarantee of at least the minimum weekly required amount paid on a salary basis regardless of the number of hours, days or shifts worked, and a reasonable relationship exists between the guaranteed amount and the amount actually earned.” (29 C.F.R. § 541.602)
The majority followed the lead of the U.S. Courts of Appeals for the Sixth and Eighth Circuits which jointly held that both requirements must be met for an employee paid on an hourly, weekly or shift basis to be exempt from the FLSA. (Hughes v. Gulf Interstate Field Servs. Inc., 878 F.3d 183 [6th Cir. 2017]; Coates v. Dassault Falcon Jet Corp., 961 F.3d 1039 [8th Cir. 2020]) The employer, Helix, did not satisfy either prong of the regulation. First, it failed to offer a minimum weekly required amount regardless of the number of hours worked. (2020 U.S. App. LEXIS 40236 * at 9) It also did not comply with the “reasonable relationship test” and did not contend that it did. (Id.)
Judge Ho noted that Helix could have invoked the “highly compensated employee exemption by maintaining that the employee was paid on a fee basis; but, Helix failed to make that argument. (Id. at *4)
Judge Wiener strongly dissented.
The request for rehearing en banc remains pending.
