Highly paid oil rig worker merits overtime, U.S. Supreme Court says

Hornbeck Offshore Services

22/02/2023 17:44

By Daniel Wiessner
       Feb 22 (Reuters) - An oil rig supervisor who earned more
than $200,000 a year working for Houston-based Helix Energy
Solutions Group Inc  HLX.N  is entitled to overtime pay, the
U.S. Supreme Court ruled on Wednesday in a decision with costly
implications for the oil and gas industry.
    The court in a 6-3 decision authored by liberal Justice
Elena Kagan decided that because the rig supervisor, Michael
Hewitt, was paid a daily rate of $963 and not a salary, an
overtime pay exemption in federal wage law for highly paid
workers did not apply to him.
    The justices affirmed a 2021 ruling by the New Orleans-based
5th U.S. Circuit Court of Appeals that Helix must face Hewitt's
2017 lawsuit seeking overtime pay. That lawsuit now goes back to
a federal judge in Houston. 
    A 1940 regulation holds that highly compensated workers -
currently defined as those earning $107,000 a year or more -
would not receive overtime pay if they have supervisory duties
and are paid at least $455 per week in the form of a salary.
    Kagan said the text of the regulation made clear that it did
not apply to employees who are paid based on how many days they
work and are not guaranteed minimum weekly wages.
    Ed Sullivan, a lawyer for Hewitt, said that "my client and
team are appreciative that the Supreme Court applied the plain
text of the law to his case."
    Helix did not immediately respond to a request for comment.
    Helix was backed in the case by oil and gas trade groups
including the American Petroleum Institute, which said in briefs
to the justices that supervisors in the industry are routinely
paid daily rates and work long hours. A ruling favoring Hewitt
would require companies to pay overtime premiums and invite a
flood of lawsuits from highly paid workers, the groups added. 
    Conservative Justices Clarence Thomas, Amy Coney Barrett and
John Roberts joined the court's three liberal members in the
ruling. 
    Justice Brett Kavanaugh, in a dissent joined by fellow
conservative Justice Samuel Alito, wrote that because Hewitt
earned a set daily rate, he knew he would be paid at least that
much for any week in which he worked. That coupled with his
management duties made him exempt from overtime pay, Kavanaugh
said.
    Conservative Justice Neil Gorsuch in a separate dissent said
Helix's appeal should have been dismissed for procedural
reasons.
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 (Reporting by Daniel Wiessner in Albany, New York; Editing by
Will Dunham and Alexia Garamfalvi)
 ((daniel.wiessner@thomsonreuters.com))