(Summary prepared by Douglas Bonney, NAA Member)
In Helix Energy Solutions Group, Inc. v. Hewitt, Case No. 21-984, decided on February 22, 2023, the United States Supreme Court held that a “daily rate worker” is not an exempt “bona fide executive” employee within the meaning of the Fair Labor Standards Act (FLSA) because such an employee is not paid on a salary basis. In his job as a tool pusher on an offshore oil rig, Michael Hewitt supervised 12 to 14 workers and typically worked 12 hour shifts, seven days a week over a 28-day “hitch” for which his employer paid him between $963 and $1341 per day. But the employer only paid Hewitt for days he actually worked. The employer contended that Hewitt was exempt from the FLSA’s overtime pay requirements as a highly compensated executive employee. The Supreme Court affirmed the en banc Fifth Circuit decision. Noting that the Secretary’s regulations defining the overtime pay exemption applicable to employees who work in a “bona fide executive, administrative, or professional capacity” have consistently included the salary-basis test since the 1940s, the majority held that “A daily-rate employee like Hewitt is not paid on a salary basis under §602(a) of the Secretary’s regulations.”
Before the Court, the employer also argued that the Secretary’s regulations are inconsistent with the FLSA’s statutory exemption language, 29 U.S.C. § 213(a)(1). The Court declined to address that issue because the employer had never raised it before the lower courts. In dissent, Justice Gorsuch suggested that, because the real issue was not properly raised, the Court should have dismissed the case as improperly granted. So, this may not be the end of this story.
Justice Kagan wrote the Court’s opinion, joined by Chief Justice Roberts, and Justices Thomas, Sotomayor, Barrett, and Jackson. Justice Gorsuch dissented as did Justice Kavanaugh joined by Justice Alito.