Deep Dive Episode 244 – Litigation Update: Helix Energy v. Hewitt
Some employers were surprised by the en banc Fifth Circuit’s December 2021 decision in Helix Energy Solutions Group, Inc. v. Hewitt that a supervisor for an offshore oil company who received approximately $1,000 per day for a total of over $200,000 annually was eligible for overtime pay under the Fair Labor Standards Act.
The Act exempts from overtime pay workers “employed in a bona fide executive, administrative, or professional capacity,” and the oil company argued that a highly compensated supervisor like Mr. Hewitt qualifies for this “EAP” exemption. The en banc Fifth Circuit applied a Department of Labor regulation requiring EAP-exempt employees to have a fixed weekly salary to conclude that, notwithstanding high pay and supervisory duties, Mr. Hewitt was non-exempt because he was paid on a daily rather than weekly basis.
However, that argument has not been accepted across the bench. Judge Jones dissented that the weekly salary rule is inapplicable for workers who satisfy a separate regulatory requirement for exempt “highly compensated employees” who make over $100,000 per year (now $107,432). Judge Wiener’s dissent added that application of the weekly salary rule—which dates from 1940s—is illogical and unreasonable under the circumstances. DOL took no view on this case.
Additionally, Helix Energy created an apparent split with the First and Second Circuits, and the Supreme Court granted on certiorari May 2, 2022. Oral argument took place October 12. If the Court upholds the decision, employers that relied on the First and Second Circuits may face significant retroactive liability.
In this podcast, experts provide a litigation update on Helix Energy, what it is, what the possible outcomes may be, and the potential consequences of the case.