United States District Court, S.D. Texas, Houston Division
S. HANEN UNITED STATES DISTRICT JUDGE
the Court are Plaintiffs' Notice of Motion for Partial
Summary Judgment [ECF No. 58], their Memorandum in Support
[ECF No. 58-1], and Defendant's Response [ECF No. 62].
Also before the Court are Defendant's Motion for Summary
Judgment and, in the Alternative, Motion for Partial Summary
Judgment [ECF No. 48], Plaintiffs' Memorandum in
Opposition [ECF No. 56], and Defendant's Supplement to
its Motion for Summary Judgment and Supplement to its
Response in Opposition to Plaintiffs' Motion for Partial
Summary Judgment [ECF No. 66].
considered the Motions, the responses, the replies, the
summary judgment evidence, the applicable law, and the
supplemental briefing from the Parties, the Court decides,
for the reasons set forth below, that Plaintiffs' Motion
for Partial Summary Judgment [ECF No. 58] be
DENIED and that Defendant's Motion for
Summary Judgment and, in the Alternative, for Partial Summary
Judgment [ECF No. 48] be DENIED.
David Dean ("Dean"), Bennett Joerger
("Joerger"), and Larry Dore ("Dore") are
Directional Drillers that worked for Newsco International
Energy Services, USA, Inc. (hereinafter "Newsco" or
"Defendant"). As such it was their job on various oil
well drill sites to perform directional drilling services.
Plaintiffs brought this action seeking unpaid overtime under
the Fair Labor Standards Act ("FLSA"), claiming
they worked 12-hour days for weeks at a time and were not
paid overtime wages.
concedes that Plaintiffs were not paid overtime and, while it
differs with Plaintiffs significantly regarding how
frequently Plaintiffs worked overtime, it also concedes that
there were occasions when Plaintiffs worked in excess of
40-hour weeks. Defendant claims that Plaintiffs were not
entitled to overtime because, among other defenses, they are
exempt from the FLSA as highly compensated executive and/or
administrative employees. More specifically, Defendant claims
undisputed evidence establishes that Plaintiffs were exempt
employees who, among other things:
• Made over $ 100, 000 pro rata compensation during each
year they worked for Newsco;
• Did not perform any significant manual labor;
• Supervised the work of all field personnel on every
single job site;
• Performed primary duties that included performance of
office or non-manual work; and
• Performed primary duties that required them to
exercise discretion and independent judgment with respect to
matters of great significance both to Newsco, and to its
undisputed evidence further establishes that, even if
Plaintiffs were not exempt employees, their damages, if any,
should be calculated using the fluctuating workweek method of
calculating damages because:
• Their hours fluctuated from week to week;
• They received a fixed salary that did not vary with
the number of hours worked during the week;
• Their fixed salary was sufficient to provide
compensation for each week at a regular rate that at least
equaled the minimum wage; and
• They had a "clear and mutual understanding"
that Newsco would pay the fixed salary regardless of the
number of hours worked.
[ECF No. 48, p. 2].
First, Defendant's administrative exemption
fails as a matter of law because Defendant cannot prove
either one of the "job duties" prongs of the
defense. To satisfy the first primary duty prong of the
administrative exemption, Defendant must prove that
Plaintiffs' directional drilling duties are directly
related to running Newsco's business itself or
determining its overall policies rather than producing the
commodity Newsco provides to the marketplace. Newsco cannot
meet its burden of proof, however, because it is in the
business of providing directional drilling services, and
Plaintiffs are the ones actually performing this service to
the marketplace. Plaintiffs are exactly the type of
"front-line" employee who is outside the scope of
the administrative exemption. Newsco cannot establish the
second prong of the administrative exemption defense either
because this record establishes that Plaintiffs' primary
job duty-while important to Newsco-does not require them to
exercise discretion and independent judgment with respect to
matters of significance.
Second, Defendant's executive exemption defense
fails as a matter of law as well. Despite the well-developed
factual record establishing that directional drilling is
Plaintiffs' primary job duty, Defendant remarkably
contends that Plaintiffs were high-level managers and that
their primary job duty is management. This argument is
unsupported by the facts. Defendant incorrectly attributes
managerial duties to Plaintiffs that the undisputed record
confirms they simply did not have. Because of this, Defendant
cannot meet its heavy burden of proof on its executive
Defendant also claims the highly-compensated and/or
combination exemption applies, but because Defendant cannot
prove as a matter of law that Plaintiffs' primary duty of
directional drilling and executing the well plan satisfies
any of the primary duty requirements of the executive or
administrative exemptions, it cannot satisfy the requirements
of these exemptions either. 29 C.F.R. § 541.601; 29
[ECF No. 58-1, pp. 1-2] (emphasis in original).
Court first presents the relevant facts agreed to by the
Parties before turning to their respective factual
contentions and the Court's analysis.
Agreed Factual Background: Newsco's Business
is a drilling services company that provides directional
drilling expertise and services to oil and gas companies. It
operates as a third party on drill sites that are owned or
operated by its clients. Part of its services to clients
includes providing equipment and personnel to perform
drilling is steering a well bore to drill a well, usually at
some kind of non-perpendicular angle. In order to steer the
drill toward oil underground, the directional drilling team
follows a "well plan," which consists of the
location of the target oil reservoir and plans to reach it by
drilling. The process involves techniques called
"rotating" and "sliding."
"Rotating" is drilling while the drill pipe spins.
"Sliding" is steering the direction of the drill
bit and pipe. As one of the Plaintiffs described it, what the
Directional Driller is "doing at the end is making sure
that that bit is going . . . [in] the right direction to get
you closer to where you need to be." [ECF No. 58-1, Ex.
E, Joerger Dep. 112:8-23].
process of directional drilling involves two primary types of
employees which Newsco provides to its clients at the
drilling site: Directional Drillers and Measurement While
Drilling ("MWD") operators. Directional Drillers
are the employees responsible for steering the drill
underground toward the oil and making sure that it is
following the well plan. [ECF No. 58-1, Ex. B, Newsco0000243,
-286]. MWDs assemble, install, and monitor survey equipment
used to generate data, such as well bore direction and angle,
which, in turn, is provided to the Directional Drillers to
aid them in steering underground. [Id. at -287].
Directional Drillers use the data provided by MWDs to compare
the survey data to the client's well plan to determine
where the drill is located underground and where it needs to
go to reach the target. [Id. at -286].
Background of the Plaintiffs
might gather from the foregoing, the Plaintiffs and the
Defendant agree on very little. They both agreed that
Plaintiffs, during the time in question, made more than $100,
000 annually (on a pro rata basis), and they both appear to
agree that the job of a Directional Driller is not one that
should be characterized as manual labor. The majority of the
remaining case-controlling facts are disputed. In fact, one
wonders how the daily work of directional drilling ever got
done given the contrary views that the Parties hold about the
duties of a Directional Driller.
Dore started working on a drilling rig the day after he
graduated from high school in 1974. He worked his way up the
drilling rig hierarchy until after five years, he was a
drilling operator. In the following years, depending on the
shape of the oil industry, he either worked on rigs or in
unrelated industries. In 2009, after years of being a
drilling operator, he applied with and was hired by
Halliburton to be a Directional Driller. He went through its
training program which included, among other things, months
of "on the job" training.
later Dore was recruited by Newsco. He made $100, 00 per year
(at least on a pro rata basis) while working for Newsco.
Joerger went to the University of Oklahoma from which he
graduated in 2010. After his formal education, he was hired
by Weatherford as an MWD. He remained there until 2012 when
he jumped both companies and job responsibilities to take a
job at Archer Drilling Services as a Directional Drilling
trainee. As Halliburton did with Dore, Archer prepared
Joerger through an in-house training program until he was
deemed sufficiently proficient to work on his own.
Unfortunately for Joerger, a few months after being trained,
Archer went out of business.
then returned to Weatherford where after a brief training
period he operated as a Directional Driller. Eventually, he
was recruited to Newsco by some of his former co-workers.
Being sufficiently trained by Archer and Weatherford, he
jumped directly into the field as a Directional Driller at
Newsco. He, too, made $100, 000 per year on a pro rata basis.
worked in the oil patch for a good part of his life. In 1999,
he was a Pump Operator, and three years later he became a
hydrostatic tester. He left the oil business for a year or so
but returned soon thereafter as a floor hand. He then became
an MWD at Scientific Drilling. Thereafter he jumped to Nevis
Energy as a Directional Driller trainee. He described this
period as almost entirely consisting of on-the-job training.
worked as a Directional Driller for five more companies
before landing at Newsco. Like Dore and Joerger, he made
$100, 000 (on a pro rata basis) annually at Newsco.
Contentions of the Parties
put, Plaintiffs complain that they worked over 40 hours per
week and were not paid overtime. That being the case,
Plaintiffs claim Newsco violated the FLSA and is obligated to
pay damages to remedy the situation.
contends that Plaintiffs were exempt employees and thus, it
was not required to pay Plaintiffs overtime. It claims that
all three Plaintiffs knew at the time they were hired that
they would be making a salary ($4, 000 per month) plus a day
rate ($750 for Dean, $600 for Joerger and Dore) regardless of
the number of hours they worked. As such, Newsco maintains
that the Plaintiffs were highly compensated and were
therefore exempt from the overtime protections of the FLSA.
Further, Defendant claims that all three Plaintiffs were
covered by the administrative, executive, highly compensated,
and/or combination exemptions as provided for by the FLSA. If
an individual is exempt, his/her employer need not pay that
judgment is warranted "if the movant shows that there is
no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law." Fed.R.Civ.P.
56(a). Once a movant submits a properly supported motion, the
burden shifts to the nonmovant to show that the court should
not grant the motion. Celotex Corp. v. Catrett, 477
U.S. 317, 321-25 (1986). The nonmovant then must provide
specific facts showing that there is a genuine dispute.
Id. at 324; Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 587 (1986). A dispute
about a material fact is genuine if "the evidence is
such that a reasonable jury could return a verdict for the
nonmoving party." Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). The court must draw all
reasonable inferences in the light most favorable to the
nonmoving party in deciding a summary judgment motion.
Id. at 255. The key question on summary judgment is
whether a hypothetical, reasonable factfinder could find in
favor of the nonmoving party. Id. at 248.
summary judgment is sought on an affirmative defense, as
here, the movant 'must establish beyond peradventure
all of the essential elements of the claim or
defense to warrant judgment in his favor.'"
Dewan v. M-I, L.L.C., 858 F.3d 331, 334 (5th Cir.
2017) (quoting Fontenot v. Upjohn Co., 780 F.2d
1190, 1194 (5th Cir. 1986)). "Once the movant does so,
the burden shifts to the nonmovant to establish an issue of
fact that warrants trial." Smith v. Reg'I
Transit Auth., 827 F.3d 412, 420 n.4 (5th Cir. 2016).
The burden of proof regarding exempt status is on the
employer. Owsley v. San Antonio Indep. Sch. Dist.,
187 F.3d 521, 523 (5th Cir. 1999). In a case involving FLSA
exemptions, those exemptions must be given a '"fair
reading,' as opposed to the narrow interpretation
previously espoused by [the Fifth Circuit] and other
circuits." Carley v. Crest Pumping Techs.,
L.L.C., 890 F.3d 575, 579 (5th Cir. 2018) (quoting
Encino Motorcars, LLC v. Navarro, __U.S. __, 138
S.Ct. 1134, 1142 (2018); see also Amaya v. NOYPI Movers,
L.L.C., 741 Fed.Appx. 203, 204-05 (5th Cir.
considering the evidence presented by the parties, the Fifth
Circuit has made clear that "unsubstantiated assertions
are not competent summary judgment evidence" and that
"[s]ummary judgment. . . may be appropriate, even in
cases where elusive concepts such as motive or intent are at
issue, ... if the nonmoving party rests merely upon
conclusory allegations, improbable inferences, and
unsupported speculation." Forsyth v. Barr, ...