Divided En Banc Fifth Circuit Affirms Certain Highly Paid Employees Entitled to Overtime Pay
Hewitt v. Helix Energy Solutions Group, Inc., No. 19-20023, 5th Cir., en banc, (2021 U.S. App. LEXIS 27215 *, __ F.4th __ , 2021 WL 4099598 [Sept. 9, 2021]).
Michael Hewitt, employed as a toolpusher for Helix Energy Solutions Group, Inc., (Helix) worked offshore on monthly hitches and was paid biweekly earning $200,000 annually. He was paid a set amount for each day worked, and worked more than 40 hours a week.[1] He sued Helix asserting that he was entitled to overtime pay. The trial judge granted summary judgment for Helix which was appealed to the Fifth Circuit; it reversed the district court.[2] On rehearing, the panel withdrew its prior opinion and substituted another one.[3] The trial court was again reversed with a split panel. The case was again reheard before the Fifth Circuit en banc.
Judge Ho[4] again was the author of the majority opinion and was joined by Judges Smith, Stewart, Haynes, Graves, Higginson, Costa, Willett, Duncan, Engelhardt, Oldham, and Wilson. The dissent was lead by Judge Clement who was joined by Judges Owen, Chief Judge, Wiener, Elrod, and Southwick. Again, the Fifth Circuit held that just because an employee is highly compensated does not exempt that employee from overtime compensation.
The majority strictly interpreted the statute and regulations of the Department of Labor.[5] The majority opinion notes that both the Sixth and Eighth Circuit Courts also agree.[6] In order for an employee to be exempt from overtime pay, he or she must be a salaried employee and perform certain duties.[7]
It was uncontested that Hewitt was paid on a daily rate basis and that he met the duty requirements and income thresholds.[8] Special rules promulgated by the Department of Labor apply to employees paid on by an hourly or daily rate basis to be considered salaried employees and thus exempt from overtime pay. 29 C.F.R. § 541.604(b) establishes two criteria which must be satisfied before an employee paid a day or an hourly rate is exempt from overtime pay. First, there must be a minimum guarantee paid regardless of the number of hours worked. Second, there must be a reasonable relationship between the amount of pay guaranteed and the amount of time worked.[9]
The majority succinctly states that Helix could have satisfied these requirements by paying a minimum guaranteed weekly rate of $4000 regardless of the number of hours worked.[10]
A copy of the Fifth Circuit opinion may be found at:
https://www.ca5.uscourts.gov/opinions/pub/19/19-20023-CV3.pdf
[1] Hewitt v. Helix Energy Sols. Grp., Inc., 956 F.3d 341, 342 (5th Cir. 2020), opinion withdrawn.
[2] Id.
[3] Hewitt v. Helix Energy Sols. Grp., 983 F.3d789 (5th Cir. 2020), on rehearing.
[4] Judge Ho also wrote a concurring opinion addressing what he styled as “atexual” arguments of amici as well as additional arguments in the dissent. 2021 U.S. App. LEXIS at *21.
[5] “The plain text of the regulations is decisive of this appeal.” 2021 U.S. App. LEXIS at *12.
[6] Id. See also: McQueen v. Chevron Corp., 2018 U.S. Dist. LEXIS 57751, 2018 WL 1989937 (N.D. Cal.), Wellman v. Grand Isle Shipyard, 2015 U.S. Dist. LEXIS 60631, 2015 WL 2169786 (E.D. La.).
[7] Id. at *3.
[8] Id. at *4.
[9] Id. at *5.
[10] Id.at *6.
