Supreme Court Grants Writ in Offshore Employee Overtime Pay Dispute
Helix Energy Solutions Grp., Inc. v. Hewitt, 2022 U.S. LEXIS 2233 *, 2022 WL 1295708 (May 2, 2022)
There has been a plethora of cases involving wage disputes of offshore workers as well as seaman not only in the Fifth Circuit but also in California. The Fifth Circuit in Adams v. All Coast1 addressed the issue of the seaman’s exemption from overtime pay in the Fair Labor Standards Act and held that personnel on a vessel may be seamen under the Jones Act but not qualify as seamen under the FLSA and thus entitled to overtime pay. Similarly, a California court in Gulf Offshore Logistics v. Superior Ct. of Ventura Cnty.2 held that seamen are entitled to overtime pay under California law when vessels are operating in California state waters.
In Hewitt v. Helix Enery Sollutions Grp., Inc. v. Hewitt,3 the en banc U.S. Court of Appeals for the Fifth Circuit held that certain highly paid employees working offshore are entitled to overtime pay. The court in an opinion by Judge James Ho held that when employees are paid a day rate, the employer must comply with 29 C.F.R. § 541.604(b) in order to be exempt from paying overtime pay to highly compensated employees. This regulation states: An exempt employee's earnings may be computed on an hourly, a daily or a shift basis, without losing the exemption or violating the salary basis requirement, 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. Judge Ho was joined by Judges Smith, Stewart, Haynes, Graves, Higginson, Costa, Willett, Duncan, Engelhardt, Oldham, and Wilson. Judges Edith H. Jones, Owen, Chief Judge, and Wiener, Elrod, and Southwick dissented.
The final result of the Supreme Court opinion could also affect other highly compensated employees. It is interesting to note that Judge Ho, an appointee of President Trump, based the decision on a strict textualist reading of the regulation.4 An overwhelming majority of the court agreed. Judge Edith Jones’s dissent was premised on three bases: 1. The employee was a highly paid employee under 29 C.F.R. § 541.601. 2. This provision along with the regulatory text does not incorporate 29 C.F.R. § 541.604, the fundamental basis of the reasoning of the majority. 3. The construction of the regulations adopted by the majority produces discord.5
1 15 F.4th 289 (5th Cir. 2021)
2 272 Cal.Rptr.3d 356 (Cal Dist. Ct. App. 2020)
3 15 F.4th 289 (5th Cir. 2021)
4 Judge Ho also wrote a concurring opinion to address the multitude of amici briefs and arguments not even the employer made. See: 15 F.4th at 399 et seq. He notes that the Sixth and Eighth Circuits support this approach.
5 15 F.4th at 306
