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McLendon v. Schlumberger Technology Corporation

United States District Court, E.D. Arkansas, Western Division

August 31, 2017




         Sidney McLendon brings this action against his former employer, Schlumberger Technology Corporation, for failure to pay overtime wages in violation of the Fair Labor Standards Act, 29 U.S.C. §§ 201-219. Schlumberger moves for summary judgment, arguing that it was not required to pay McLendon overtime wages because he was a highly-compensated employee under the FLSA. Because there are genuine disputes of fact as to whether the highly-compensated employee exemption applies, the motion for summary judgment is denied.


         Schlumberger is an oilfield services company. It operates in locations throughout the United States, but McLendon primarily worked out of the Conway, Arkansas location. He became a Tubing Conveyed Perforating Specialist (“TCP” specialist) in February 2011. Perforating creates holes in the casing-sometimes made from concrete-of an oil or natural gas wellbore. These holes create a connection between the wellbore and the reservoir, which is a part of the production process. A perforating gun, which contains explosive charges, is used to create the holes. A drill pipe is used to send the gun down into the wellbore and the charges are detonated according to where holes are required.

         Schlumberger and McLendon give different descriptions of McLendon's duties and responsibilities as a TCP specialist. Schlumberger says that McLendon was responsible for consulting with the client to determine what equipment was most suitable and that he had the discretion to implement that determination and make changes to it. According to Schlumberger, McLendon was responsible for the overall safety of the operation. He supervised a crew, enforced safety rules, and led safety meetings.

         Conversely, McLendon says he did not consult with the client or make decisions about what the job would require. Neither did he supervise the crew or lead safety meetings. McLendon says that a TCP Specialist elsewhere may have those responsibilities but that he worked with smaller-scale operations in Arkansas and was never required to supervise a crew. Instead, he was merely responsible for the equipment he transported from the shop. He built perforating guns in the shop, loaded the guns into his truck, transported the guns to the site, assembled the guns by attaching the firing heads, and then watched from his truck as the guns were run down into the well. Once the guns were in place, McLendon made sure the charges detonated. Then, after the guns were brought back up out of the well, McLendon disassembled and cleaned them.

         McLendon's annual salary in 2011 was $53, 000. By the time Schlumberger terminated McLendon's employment in 2015, his annual salary was $72, 000. In addition to his salary, McLendon earned and received non-discretionary bonuses for each completed job. Schlumberger determined the amount of the bonus by a pre-determined percentage of the net amount of the client's payment. With the non-discretionary bonuses, McLendon's total income exceeded $100, 000 in the years 2012, 2013, and 2014. McLendon's total income also would have exceeded $100, 000 in the year 2015 had he not been terminated in November.


         A court should grant summary judgment if the evidence demonstrates that there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). The moving party bears the initial burden of demonstrating the absence of a genuine dispute for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). If the moving party meets that burden, the nonmoving party must come forward with specific facts that establish a genuine dispute of material fact. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986); Torgerson v. City of Rochester, 643 F.3d 1031, 1042 (8th Cir. 2011) (en banc). A genuine dispute of material fact exists only if the evidence is sufficient to allow a reasonable jury to return a verdict in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). The Court must view the evidence in the light most favorable to the nonmoving party and must give that party the benefit of all reasonable inferences that can be drawn from the record. Pedersen v. Bio-Med. Applications of Minn., 775 F.3d 1049, 1053 (8th Cir. 2015). If the nonmoving party fails to present evidence sufficient to establish an essential element of a claim on which that party bears the burden of proof, then the moving party is entitled to judgment as a matter of law. Id.


         The FLSA requires covered employers to pay additional wages to non-exempt employees who work in excess of forty hours per week. 29 U.S.C. § 207. Schlumberger is a covered employer and admits that McLendon worked in excess of forty hours per week but did not receive additional wages for his overtime work. McLendon was therefore entitled to overtime pay unless an exemption applied. 29 U.S.C. § 213. Schlumberger bears the burden to demonstrate its affirmative defense that McLendon was exempt from the FLSA's overtime requirements. See Beauford v. ActionLink, LLC, 781 F.3d 396, 401 (8th Cir. 2015). Schlumberger raises one affirmative defense in its motion for summary judgment: that McLendon was exempt as a “highly-compensated employee.” Document #25-2 at 1; 29 C.F.R. § 541.601.

         The highly-compensated employee exemption provides that an employee with a total annual compensation of at least $100, 000[1] is exempt from the FLSA's overtime requirements if the employee customarily and regularly performs any one or more of the duties or responsibilities of an executive, administrative or professional employee. 29 C.F.R. § 541.601(a). McLendon does not dispute that he received a total annual compensation of at least $100, 000. But the exemption does not apply if an employee's primary duty is manual labor, even if the employee customarily and regularly performs the duties or responsibilities of an executive, administrative, or professional employee. Id. § 541.601(d). Before determining whether McLendon performs any duties that exempt him under section 541.601(a), the Court must determine whether the exemption applies in the first place. The amount of time McLendon spent performing certain job duties and responsibilities, the importance of those duties and responsibilities, credibility determinations, and the weighing of the evidence are all fact questions for a jury. Grage v. No. States Power Co. Minn., 813 F.3d 1051, 1054 (8th Cir. 2015) (collecting cases). Nonetheless, whether an employee's particular activities exempt him from the FLSA overtime requirements is a question of law. Id.

         An employee's primary duty is “the principal, main, major or most important duty that the employee performs.” 29 C.F.R. § 541.700(a). Manual labor is work involving physical skill and energy and repetitive operations with the hands. Id. 541.3(a). The skills and knowledge required for the performance of manual labor are acquired through apprenticeships and on-the-job training, rather than a prolonged course of study like one a lawyer or doctor would complete. Id. Specific examples of those who primarily perform manual labor are carpenters, electricians, mechanics, plumbers, iron workers, operating engineers, longshoremen, and construction workers. Id. These workers are not exempt under the FLSA “no matter how highly paid they might be.” Id.

         A federal court sitting in Texas recently pointed out that workers in the oil and gas industry are difficult to classify because neither Congress nor the Fifth Circuit has determined whether oil field workers are manual laborers. Galvin v. FTS Int'l Servs., LLC, 7:16CV147-LG-DC, 2017 WL 3012651 at *3 (W.D. Texas June 7, 2017) (collecting cases). Neither has the Eighth Circuit. Whether an oilfield worker's primary duty is manual labor must be determined based on the facts in each case. See Grage, 813 F.3d at 1055. The following factors are relevant to determining an employee's primary duty: “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.” Id. (quoting 29 C.F.R. § 541.700(a)). Furthermore, manual labor may be considered exempt if it is performed incidentally to non-manual labor. “Work that is ‘directly and closely ...

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