18th Annual Workplace Class Action Report - 2022 Edition

244 Annual Workplace Class Action Litigation Report: 2022 Edition that Plaintiffs fell within the “seaman” exemption to the FLSA’s overtime requirement since their services were primarily rendered to assist a vessel as a means of transportation. Id. at *4. On appeal, the Fifth Circuit reversed the District Court’s order. The Fifth Circuit noted that under the FLSA, “an employee is a seaman if: ‘(i) the employee is subject to the authority, direction, and control of the master; and (ii) the employee’s service is primarily offered to aid the vessel as a means of transportation, provided that the employee does not perform a substantial amount of different work.’” Id. at *6. As an initial matter, the Fifth Circuit observed that the parties did not dispute that the first prong of this test was met, as Plaintiffs slept on the vessels and were subject to the captain’s authority. The key dispute then, according to the Fifth Circuit, concerned “whether using a crane aids in a lift boat’s operation as a means of transportation .” Id. at *7. The Fifth Circuit concluded that the FLSA’s plain language suggested that, when a crew primarily assists with loading and unloading, or with mainly industrial tasks, that crew does not perform seaman’s work. In this case, Plaintiffs spent a substantial portion of their time transporting personnel and supplies between lift boats and the dock. The lift boats also supported industrial activity at offshore oil rigs, leading the Fifth Circuit to label Plaintiffs as akin to a support crew assisting the divers and welders at the oil rig with their industrial work. The Fifth Circuit reviewed relevant jurisdictional case law on this topic, which reinforced the holding that Plaintiffs could not be classified as seamen for purposes of the FLSA exemption. Finally, the Fifth Circuit addressed the status of cooks, noting that a “cook is usually a seaman because he usually cooks for seamen.” Id. at *23. However, because the Fifth Circuit reversed the District Court’s order labeling Plaintiffs as seamen, the Fifth Circuit found that the District Court must reconsider the cooks’ status under the FLSA, thus it overturned summary judgment on this issue as well. Consequently, the Fifth Circuit reversed the District Court’s findings and remanded for further proceedings. Hernandez, et al. v. Helix Energy Solutions Group, Inc ., 2021 U.S. Dist. LEXIS 82107 (S.D. Tex. April 29, 2021). Plaintiffs, a group of off-shore oil drilling electricians, filed a collective action alleging that Defendant failed to pay overtime compensation in violation of the FLSA. Plaintiffs filed a motion for partial judgment on the pleadings and for partial summary judgment. The Court denied the motions. Defendant asserted an affirmative defense that “any acts or omissions by Helix with respect to the payment of wages were undertaken in good faith reliance on the regulations and interpretations of the Wage Hour Administration of the United States Department of Labor and/or legal advice or opinions from outside counsel and were based on long-standing industry standards and practices.” Id . at *7. Plaintiffs argued that summary judgment was warranted on Defendant’s affirmative defenses because: (i) Plaintiffs were not seamen, thereby making them non-exempt from overtime requirements under the FLSA; (ii) Defendant abandoned the defenses based on the FLSA’s administrative exemption and highly-compensated-employee exemption; and (iii) Defendant abandoned its good faith defense and lacked summary judgment evidence supporting it. Defendant contended that Plaintiffs’ work directly related to the transportation of a vessel because they worked on systems that kept the vessel afloat and allowed it to be safely navigated. Id . at *12. Defendant submitted the declaration of the vessel’s captain, who stated that electricians spend less than 20% of their time working on non-marine equipment, and over 80% on equipment necessary to keeping the vessel afloat and navigable. Plaintiffs contended that they spent significantly more time on non-marine equipment. The Court ruled that the current record with conflicting testimony showed genuine factual disputes material to determining whether Plaintiffs spent such a substantial portion of their working time on non-seaman duties as to fall outside the "seaman" exemption. Id . at *13. The Court thus denied Plaintiffs’ motion as to the seamen exemption. As to the administrative and highly- compensated-employee exemptions, Defendant produced Plaintiffs’ paystubs, which demonstrated that Plaintiffs earned over $100,000 annually and over $455 per week while working for Defendant. The Court determined that the record showed genuine disputes of fact material to determining whether Plaintiffs qualified as administrative or highly-compensated employees under the FLSA. Thus, the Court denied the motion as to Defendant’s affirmative defense based on the FLSA’s administrative and highly-compensated-employee exemptions. Finally, Plaintiffs contended that they were entitled to summary judgment on Defendant’s good faith defense because it lacked evidence supporting it. In support of its defense, Defendant offered the declaration of Kenric McNeal, its director of human resources, in which he stated that Defendant determined the exempt status of employees based on their "job duties and responsibilities,” and that electricians were "classified as exempt within the industry." Id . at *16. Plaintiffs argued that compliance with industry standards was insufficient to prove good faith. The Court, however, noted that Defendant was not relying solely on industry practices to prove good faith, and instead it was simply invoking it as a relevant consideration. Id . at *17. The Court thus determined that