Background
The plaintiffs, including Trever Guilbeau, were oilfield workers employed by Schlumberger Technology Corporation. They were paid under a hybrid system consisting of a fixed biweekly salary and variable day rates for work performed or standby time. The plaintiffs sued for overtime pay, arguing their compensation was not on a salary basis. The district court denied the employer’s motion for partial summary judgment regarding the named plaintiff but authorized notice to a collective of similar workers.
The court’s reasoning
The court analyzed whether the plaintiffs’ compensation met the salary-basis requirement for the highly compensated employee exemption. The court determined that Section 602(a) of the regulations applied because the plaintiffs received a predetermined sum calculated on a weekly or longer basis. The court found that the guaranteed biweekly salary was not subject to reduction based on the quality or quantity of work performed. The court held that the additional variable day-rate pay did not violate the salary-basis requirement as long as the guaranteed minimum was met. The court distinguished this case from prior decisions where the guaranteed amount was based on an hourly rate, noting that the basis of payment here was the weekly salary.
We hold that Guilbeau was paid on a salary basis and hence ineligible for overtime compensation.
Opinion at 2
What it means going forward
The decision clarifies that oilfield workers with hybrid pay structures may be exempt from overtime if they receive a guaranteed weekly salary, even if they earn significant additional income through daily rates. It remands the collective action portion to the district court to determine if other collective members meet the specific exemption criteria.