The Supreme Court today agreed to weigh in on a labor dispute involving an offshore energy services company that asks whether businesses are required to pay overtime to high-earning supervisors.
In Helix Energy Solutions Group Inc. v. Michael Hewitt, a Texas-based offshore company is fighting a federal appeals court ruling that required retroactive overtime payments to a former “high-ranking” employee — even though his salary exceeded the federal threshold for companies to pay 1.5 times a worker’s hourly rate.
Helix argues that under the Fair Labor Standards Act, the company is exempt from paying Hewitt, the former employee, for work that exceeded 40 hours per week because his salary was over $100,000 annually, or $455 per week.
But a split ruling last year from a full panel of active judges on the 5th U.S. Circuit Court of Appeals found that Hewitt was still owed overtime because his compensation was based on a daily — rather than a weekly — rate, even though that pay amounted to more than double the weekly minimum rate outlined in the FLSA.
“If allowed to stand, the decision below would give rise to massive retroactive liability, especially given the ability to file nationwide collective actions in the Fifth Circuit,” Helix wrote in its January petition to the Supreme Court.
The company is represented by seasoned Supreme Court advocate Paul Clement, a partner at the firm Kirkland & Ellis LLP.
“This Court has repeatedly rejected plaintiffs’ attempts to impose significant FLSA liability on employers who have done nothing more than pay well-compensated workers in conformity with long-settled industry practice,” Helix wrote.
The justices only accept a small fraction of the cases brought before them each term.
Hewitt worked as a tool-pusher for Helix from 2015 to 2017, and he was responsible for supervising employees on the company’s offshore well-intervention vessels, which are used to enhance production or decommission operations.
He would live on the vessel for 28 days at a time and was on duty for 12 hours, but he was paid the same rate regardless of actual hours worked.
Over his time at the company, Hewitt earned a total annual compensation that reached as high as $248,053 in 2015, and he received $143,680 over eight months of work in 2017. Hewitt sued Helix for overtime payment following his “performance related release,” according to the company.
However, an attorney for Hewitt argued in a March brief to the Supreme Court that he had not been guaranteed a pay rate and that his rate had varied throughout his time working for the company.
“Petitioners ignore all that and dismissively assert in eight sentences that they paid Respondent a salary because he received an amount of pay over the FLSA’s then-existing ‘salary level’ of $455 per week,” wrote Edwin Sullivan of the firm Oberti Sullivan LLP.
Helix had urged the justices to take the case to resolve a split between federal appeals courts on when employees are owed overtime.
In its petition, Helix pointed out that the 5th Circuit had said it seemed implausible that a supervisor would be eligible for overtime, but the majority of judges felt they were compelled to reach that ruling because of the text of the statute.
“As the dissenting judges forcefully demonstrated, and as the First and Second Circuits have held, the decision below is wrong as a matter of text, context, and common sense,” the company wrote.
The Supreme Court is expected to hear arguments in the case next term.