JOSEPH HOBBS, Individually And On Behalf Of All Others Similarly Situated;DRAKE FEENEY, Individually And On Behalf Of All Others Similarly Situated, Plaintiffs - Appellees
PETROPLEX PIPE AND CONSTRUCTION, INCORPORATED, Defendant-Appellant
from the United States District Court for the Western
District of Texas
JOLLY, SMITH, and COSTA, Circuit Judges.
GRADY JOLLY, CIRCUIT JUDGE
Hobbs and Drake Feeney are former pipe welders for Petroplex
Pipe & Construction, Inc. Hobbs and Feeney brought this
suit in federal district court, alleging that although they
often worked more than forty hours per week for Petroplex,
they were not paid overtime as required by the Fair Labor
Standards Act of 1938, 29 U.S.C. § 201 et seq.
(FLSA). Following a bench trial, the district court held that
Petroplex was liable to Hobbs and Feeney under the FLSA.
Petroplex appeals, contesting only the district court's
holding that Hobbs and Feeney were employees instead of
independent contractors. We affirm.
is an oilfield contractors and services company located in
Midland, Texas. Pioneer Natural Resources is one of
Petroplex's clients for whom it provides its services.
Beginning in February 2014, Pioneer asked Petroplex to
provide pipe welding services at the locations where
Petroplex was constructing oil treatment and storage
facilities for Pioneer. Petroplex then hired Sam Hardcastle
and Joseph Hobbs to perform pipe welding services. Although
Hobbs and Hardcastle were initially hired as W-2 employees,
Petroplex later reclassified them as independent contractors.
This change in classification occurred after discussions
between the pipe welders and Petroplex's president, T.R.
Bridges. But nothing in the record indicates that the pipe
welders ever signed a contract with Petroplex. Subsequently,
Drake Feeney began to work as a pipe welder for Petroplex.
Feeney worked for Petroplex from July 2014 to October 2014
and then left to work closer to home. Feeney returned to work
for Petroplex in January 2016, and this time stayed with the
company until June 2016. During his fourteen-month absence
from Petroplex, Feeney provided pipe welding services to
other companies. Hobbs worked continuously for Petroplex from
February 2014 until January 2017.
Hobbs and Feeney worked primarily as pipe welders, in the
course of the workweek, they would sometimes perform
structural welding, complete maintenance jobs, and operate
forklifts for Petroplex. Depending on the year, Petroplex
paid the pipe welders at a straight hourly rate of either $70
or $80. The pipe welders testified that they did not
negotiate their rate of pay. Typically, the pipe welders
would work from 7:00 AM to 5:00 PM six days a week. And while
they worked for Petroplex, neither Hobbs nor Feeney provided
pipe welding services to other companies. Hobbs and Feeney,
however, both testified about instances where they missed
work for weeks at a time.
welders supplied their own trucks, welding machines, beveling
machines, grinders, torches, torch hoses, leads, jack stands,
hand tools, levels and squares. The welders were also
responsible for their own meals and housing. For this
purpose, both Hobbs and Feeney purchased campers to live in
while working for Petroplex. In their tax returns, Hobbs and
Feeney listed themselves as self-employed and took thousands
of dollars in deductions on work-related expenses. Petroplex
paid for and supplied the welders with consumables, such as
oxygen acetylene for coating, welding rods, buffing wheels,
grinding disks, face shields, and sanding pads. Petroplex
would typically spend about $500, 000 on all of its equipment
at each construction site. Petroplex would also compensate
the pipe welders for the time they spent undergoing testing
and certification by Pioneer.
set the pipe welders' hours, and if they showed up late,
sent them home for the day. The pipe welders also took their
breaks and lunches at the same time as Petroplex's
employees. But unlike Petroplex's employees, Hobbs and
Feeney did not receive an employee handbook or uniforms. At
first, Bridges was the person who oversaw the pipe welders
and gave them instructions, such as which job assignments to
complete each day. Over time, however, Hardcastle took on a
supervisory role. After assuming this role, Hardcastle would
divide up job assignments among the pipe welders, pull
measurements on the welds, provide diagrams for the pipe
welders, and send the pipe welders home when they showed up
to work late. Hobbs's relationship with Petroplex ended
after he showed up to work late and got into an argument with
Hardcastle over Hobbs's attitude. Feeney's second
stint with Petroplex ended after Hardcastle indicated that
Petroplex was running out of work for him.
and Feeney filed a FLSA collective action, alleging that
Petroplex improperly classified them as independent
contractors and that they should have been paid overtime for
hours worked in excess of forty hours per week.The district court
conducted a bench trial on September 4, 2018. Following the
bench trial, the district court issued findings of fact and
conclusions of law in which it held that the pipe welders
were employees of Petroplex and that Petroplex was liable for
violating the FLSA. The district court then entered final
judgment in the amount of $101, 600 in favor of the pipe
welders. This timely appeal followed.
FLSA requires employers to pay employees at least
one-and-one-half times the regular hourly rate for hours
worked in excess of forty hours per week. See 29
U.S.C. § 207(a)(1). Independent contractors are exempt
from such requirement. In determining employee/independent
contractor status, the "relevant question is whether the
alleged employee so economically depends upon the business to
which he renders his services, such that the individual, as a
matter of economic reality, is not in business for
himself." Thibault v. Bellsouth Telecomms.,
Inc., 612 F.3d 843, 845 (5th Cir. 2010). This court
utilizes "five non-exhaustive factors" to guide
this inquiry. See Hopkins v. Cornerstone Am., 545
F.3d 338, 343 (5th Cir. 2008). These "economic
realities" or Silk factors are: "(1) the
degree of control exercised by the alleged employer; (2) the
extent of the relative investments of the worker and the
alleged employer; (3) the degree to which the worker's
opportunity for profit or loss is determined by the alleged
employer; (4) the skill and initiative required in performing
the job; and (5) the permanency of the relationship."
Id. "No single factor is determinative. Rather,
each factor is a tool used to gauge the economic
dependence of the alleged employee, and each must be
applied with this ultimate concept in mind."
Id. (internal citations omitted).
the district court resolved this case following a bench
trial, we review the district court's historical findings
of fact for clear error. See Brock v. Mr. W. Fireworks,
Inc., 814 F.2d 1042, 1044 (5th Cir. 1987) (citing
Fed.R.Civ.P. 52(a)). The district court's findings as to
the Silk factors are "based on inferences from
fact and thus are questions of fact" that are also
subject to the clearly erroneous standard of review. See
id. But the district court's "ultimate
determination of employee status is a finding of law subject
to de novo consideration by this court."
Id. at 1045.
finding is 'clearly erroneous' when although there is
evidence to support it, the reviewing court on the entire
evidence is left with the definite and firm conviction that a
mistake has been committed." Anderson v. City of
Bessemer City, 470 U.S. 564, 573 (1985) (quoting
United States v. U.S. Gypsum Co., 333 U.S. 364, 395
(1948)). However, "[i]f the district court's account
of the evidence is plausible" in the light of the entire
record, this court "may not reverse it even though
convinced that had it been sitting as the trier of fact, it
would have weighed the evidence differently."
Id. at 573-74.
district court found, based on the underlying historical
facts, that four of the Silk factors-control, investment,
opportunity for profit and loss, and permanency-weighed in
favor of employee status. The remaining factor-skill and
initiative-it found to be neutral. We review those findings,