The past several years have seen an explosion of overtime pay lawsuits involving oilfield workers. To illustrate the dramatic rise in oilfield overtime litigation, one need only look at the docket of the federal court in Midland, which lies in the heart of the Permian Basin that has been ground zero for the fracking revolution that has caused oil and gas drilling and production to increase dramatically in Texas, Pennsylvania, New York, West Virginia, North Dakota, Oklahoma, Arkansas, Louisiana and other states. For the entire year of 2013, when oil prices were over $100 per barrel, only five FLSA cases were filed in the Midland Division, while in 2015, fifty-eight such cases were filed there, and almost all of these were against companies in the oil and gas sector. 2016 was no different, with another sixty FLSA cases being filed in the Midland Division.
2 reasons for the dramatic rise in FLSA claims
There are two primary reasons for this dramatic rise in FLSA claims in this sector.
- The first one is economic – when oil prices plummeted in late 2014, oilfield companies engaged in mass layoffs over the next year to try to survive the bust, and the workers who were laid off began looking into whether they were due overtime pay for the long hours they had worked during the boom.
- The second reason for the jump in FLSA litigation against oilfield service companies is legal and has to do with the narrowing of an exemption under the FLSA, known as the Motor Carrier Act (“MCA”) exemption. This exemption has traditionally been applied to oilfield workers, and a more restrictive interpretation of it has had the effect of increasing the number of oilfield workers eligible for overtime pay.
This article will outline what the MCA exemption is, how it has been narrowed by recent legislation and caselaw, and why this is important in oilfield overtime cases.
Motor Carrier Act Exemption
The MCA exemption provides that overtime pay is not required for “any employee with respect to whom the Secretary of Transportation has power to establish qualifications and maximum hours of service.” Traditionally, this meant that anyone who drove, loaded or rode in a vehicle weighing more than 10,000 pounds was exempt from overtime pay. However, in 2008 Congress narrowed the MCA exemption with the enactment of the SAFETEA-LU Technical Corrections Act (“TCA”). Section 306(a) of the TCA provides that “Section 7 of the [FLSA]…shall apply to a covered employee notwithstanding section 13(b)(1) of that Act.” Section 306(c) of the TCA provides that a “covered employee” is an employee of a motor carrier whose job, “in whole or in part,” affects the safe operation of vehicles weighing 10,000 pounds or less. Courts have interpreted this new language to mean that “it is the employer’s burden to demonstrate that the employees exclusively drove vehicles greater than 10,000 pounds during a workweek.” Roche v. S-3 Pump Service, Inc., Civil Action No. 5:15-CV-268-XR (W.D.Tex. Jan. 4, 2016). The MCA exemption is particularly important in cases involving oilfield workers and those in the oil and gas industry, as these workers frequently drive, load or ride in trucks which are at or just below or above the 10,000 pound threshold. As such, whether these workers are entitled to overtime pay at all could hinge on how the MCA exemption is interpreted.
Technical Corrections Act ambiguity
The TCA only refers to “motor vehicles weighing 10,000 pounds or less.” This language has created some ambiguity as to whether a court should use the Gross Vehicle Weight Ratio (“GVWR”) or the actual weight of a vehicle as the measure when assessing whether employees are covered under the TCA.
This issue is important, as depending on the facts of an FLSA case plaintiffs will sometimes claim that even though the vehicle(s) at issue had a GVWR of more than 10,000 pounds, they fall outside of the MCA exemption because the actual weight of the vehicle was less than 10,000 pounds. Conversely, defendants will sometimes claim that even though the GVWR of the vehicle at issue was less than 10,000 pounds, the actual weight of the vehicle, once all accessories and equipment was included, was more than 10,000 pounds, thus rendering the driver/passengers subject to the MCA exemption. The Eighth Circuit has ruled that it is the GVWR, rather than the actual weight of the vehicle, that is determinative for the purposes of the MCA exemption. McCall v. Disabled Am. Veterans, 723 F.3d 962, 966 (8th Cir. 2013).
Actual weight v. Gross Vehicle Weight rating
In January of 2016, a Texas federal district court was asked to rule on the MCA exemption in a case involving oilfield workers that drove F-250 trucks. In Roche, the defendants argued that it should be the actual weight of the vehicle that is determinative when deciding the applicability of the MCA Exemption. However, the Honorable Xavier Rodriguez, in his opinion, noted that Department of Labor’s Wage and Hour Division states that the DOL “will continue to use the gross vehicle weight rating (GVWR) or gross combined vehicle weight rating in the event that the vehicle is pulling a trailer.” The Court then stated that using the actual weight measurement when deciding the MCA Exemption would be impractical, as “employers would be required to weight trucks and loaded trailers on a regular basis to ensure that they may benefit from the exemption.” The Court then held that it “will provide deference to the DOL’s interpretation,” meaning it “will apply gross vehicle weight rating (GVWR) or gross combined vehicle weight rating in the event that the vehicle is pulling a trailer.” The Roche Court went on to hold that the plaintiffs, by providing evidence that they drove F-250 pickup trucks with no trailers attached on a weekly basis, had provided sufficient evidence to prove the inapplicability of the MCA Exemption. As such, the Court granted the plaintiffs’ summary judgment motion and denied the defendants’ summary judgment motion on the MCA Exemption, holding it to be inapplicable to the plaintiffs’ claims.
It is this author’s opinion that the Eight Circuit and Judge Rodriguez got the issue right in the McCall and Roche opinions. A ruling that it is the actual weight that is determinative of the MCA exemption is not feasible, as it would require an employer to continuously monitor its vehicles to determine the actual weight of them to see whether their employees operating and riding in these vehicles might be subject to the MCA, and given that the weight of a vehicle can change, it could create a multitude of problems, namely that sometimes the workers would be exempt and other times they would be owed overtime. Instead, as held in the McCall and Roche cases, it should be the GVWR of a vehicle that is used in determining MCA exemption coverage. The GVWR of a vehicle does not change – it is is the manufacturer’s safety rating setting the sum of the weight of the [vehicle], accessories, and the maximum weight of the rider, passenger and cargo that can be safely carried. As such, it provides a static, and thus predictable, method for determining whether an employee who operated, loaded or rode in the vehicle at issue is subject to the MCA exemption.
About the Author: Josh Borsellino is a trial attorney based in Fort Worth, Texas. He is the Managing Partner of Borsellino, P.C. and primarily represents oilfield workers and those in the oil and gas industry in cases for unpaid overtime. If you or a family member or friend have questions regarding overtime pay, call Josh Borsellino at 817.908.9861 or 432.242.7118 or complete this online form for a free consultation.