One thing about FLSA collective actions—right or wrong, win or lose, the legal fees for both sides mount up quickly and almost relentlessly. I often counsel clients to try to get out early of such a case (especially if I perceive there to be a problem, where there usually is). Well, the parties in a recently filed collective action have asked a federal judge to stay the proceedings in their case so they could pursue mediation. The case is entitled Barnett v. EQT Production Co., and was filed in federal court in Western District of Pennsylvania. This is the correct tactic for the employer.
The workers claim that they were misclassified as exempt, thereby denying them overtime. In a joint motion, the parties requested that discovery be stayed and that the action be conditionally certified so that notice could be sent to potential class members. That notice would allow workers to opt in. The conditionally certified class would be comprised of any person who performed completions work for the Company but who were treated as independent contractors; such people are not “employees” under the FLSA. (The mediation is scheduled for October 17).
The named plaintiff alleged that he and other employees on rigs routinely performed non-exempt work in excess of forty per week and were never paid overtime. To evade this obligation, the plaintiff charges that the Company classified the workers as independent contractors.
The plaintiff charges also that the Company exercised sufficient control to label the workers as “employees” and therefore subject to the FLSA. They allegedly took direction from the company as well as being managed and supervised by Company supervisors. They provided regular reports to supervisors; they wore EQT uniforms, attended EQT training/orientation and lived in company-provided housing. Those are several indicia of control, undermining the defense that the people are true independent contractors.
This could be bad for the Employer. By putting all your eggs in the basket of independent contractor status, the battle will be totally lost if the workers are not found to be independent contractors. This is because if a worker is covered by the FLSA and is non-exempt and if they work beyond forty hours, they must get paid overtime. End of story. Then, all there is to quibble about is the number of hours worked and computation issues.
I applaud the action here, especially by the employer. Get out of it early and save the escalating legal fees (on both sides, as this is a fee-shifting statute). If there is something to be fixed or ameliorated, then do it.
And move on…