Texas court holds dispatchers entitled to overtime pay

The issue of whether dispatchers are due overtime pay has been heavily debated in recent years.  Last month, a federal court in Houston, Texas ruled that dispatchers for an oil and petrochemicals inspection company were owed back wages for overtime.  Several current and/or former employees sued Camin Cargo Control, Inc., an oil and petrochemicals inspection company, claiming that they were owed unpaid overtime.

Executive Exemption

Camin  argued that its dispatchers, whom it called inspector coordinators, were covered by the executive and administrative exemptions of the Fair Labor Standards Act, or FLSA, the federal law that governs overtime pay in Texas.  To establish that the dispatchers were exempt under the executive exemption, Camin had to show:

  1. they were compensated on a salary basis at a rate of not less than $455 per week;
  2. their primary duty is management of the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof;
  3. they customarily and regularly direct the work of two or more other employees; and
  4. they have the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring, firing, advancement, promotion, or any other change of status of other employees are given particular weight. 29 C.F.R. § 541.100(a).

The plaintiffs contested the second, third and fourth elements. Basing its ruling on the fourth element, the Court held that “[n]one of the evidence cited by Camin suggests that a dispatcher’s recommendation as to the ‘hiring, firing, advancement, promotion, or any other change of status of other employees’ was given ‘particular weight.’ In fact, although there is some evidence that a dispatcher reviewed inspectors’ paperwork and occasionally “wrote up” an inspector, there is no evidence of any instance in which a dispatcher had a role in a hiring, firing, promotion or disciplinary decision.  Based on the record, no reasonable trier of fact could conclude that dispatchers meet the executive exemption of the FLSA and plaintiffs’ are entitled to summary judgment on this issue.”

Administrative Exemption

To prevail on its argument that the administrative exemption precluded the dispatchers from recovering overtime pay, Camin had to show that the dispatchers:

  1. were compensated at a salary of at least $455 per week,
  2. had a primary duty of performing office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers, and
  3. had a primary duty that includes the exercise of discretion and independent judgment with respect to matters of significance.” 29 C.F.R. § 541.200(a).

Basing its ruling on the second element, the Court reasoned as follows:

Factors to consider when determining the primary duty of an employee include, but are not limited to, the relative importance of the exempt duties as compared with other types of duties; the amount of time spent performing exempt work; the employee’s relative freedom from direct supervision; and the relationship between the employee’s salary and the wages paid to other employees for the kind of nonexempt work performed by the employee.  The court looks to the aspect of the employee’s job that is “of principal value to the employer, not the collateral tasks that she may also perform even if they consume more than half her time.” Duties that relate to “general business operations” are those that every business must undertake, not those specifically related to what service or product the business provides. The regulations explain that work directly related to management or general business operations includes work in the following “functional areas”: tax; finance; accounting; budgeting; auditing; insurance; quality control; purchasing; procurement; advertising; marketing; research; safety and health; personnel management; human resources; employee benefits; labor relations; public relations, government relations; computer network, internet and database administration; legal and regulatory compliance; and similar activities.  The evidence supports a finding that the primary duty of dispatchers was to dispatch inspectors to customer locations. While there is some evidence that dispatchers performed various other tasks, this evidence does not support a finding that any of those ancillary tasks were a dispatcher’s primary duty. Moreover, the ancillary tasks identified (such as checking paperwork to make sure inspectors were not making mistakes) relate to producing the services that Camin exists to provide, not the business affairs of the enterprise. [Internal citations omitted].

As such, the Court concluded that plaintiffs are entitled to summary judgment that dispatchers are not exempt from the FLSA’s overtime provisions.

If you are a dispatcher who regularly works more than forty hours per week without receiving overtime pay, consult an experienced overtime attorney to learn your legal rights.

About the author: Josh Borsellino is a Texas attorney who represents workers to get them the overtime pay they deserve.   For a free consultation, call 817.908.9861 or 432.242.7118 or complete this online contact form.

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