A federal judge has doubled the compensation awarded to four fracking crane operators who sued a drilling company for failing to pay overtime wages.
U.S. District Judge Mark Kearney of the Western District of Pennsylvania granted the plaintiffs’ post-trial motion for liquidated damages in Mozingo v. Oil States Energy Services. In October, a jury found Oil States Energy Services “willfully and recklessly” failed to pay overtime wages to the operators, and awarded them each tens of thousands of dollars in compensation.
“As a matter of public policy, Congress mandates these liquidated damages unless the employer shows it subjectively acted in good faith in trying to comply with the law and its attempts to comply with the law are objectively reasonable,” Kearney wrote in his opinion.
“When, as here, the employer disputes its legal obligation but does not show good-faith efforts to comply with the law or demonstrate reasonable efforts to comply with the law, we must follow the congressional mandate,” he continued. “We grant the employees’ post-trial motion for liquidated damages and double the amount of the jury’s unanimous award of overtime compensation to the four crane operators.”
According to Kearney, Oil State misclassified the crane operators as exempt. The company argued they were “highly compensated” and exempt under the Motor Carrier Act.
To avoid liquidated damages, Oil States would have had to prove that it tried to reasonably comply with the act, and it argued that its payment plan did just that.
“Oil States argues paying crane operators a salary and a job bonus, instead of hourly with overtime, conformed to industry standard practice and thus shows good faith. … Oil States offered no evidence it independently researched whether the industry standard salary and job pay plan for crane operators complied with the act,” Kearney said.
The judge also held that Oil States did not act in good faith by determining that the employees were exempt under the highly compensated exemption.
“For the highly compensated exception, Oil States argues it reasonably believed the crane operators were ‘deemed exempt’ because it paid the crane operators over $100,000 a year meaning it was not required to evaluate the nature of the crane operators’ specific duties under the act. Oil States argued even if the jury found it made the wrong call, because it is a ‘close call,’ we should find its belief objectively reasonable,” Kearney said.
He added that Third CIrcuit case law requires the employer produce “record evidence” of implementing a pay plan because it believed it complied with the act relying on “some pervasive legal uncertainty concerning the exemption status of its employees.”
“Oil States offered no testimony its human resource employees even knew of the legal uncertainty around the highly compensated exemption let alone researched conflicting legal authority and made a good-faith effort to rely on a reasonable interpretation,” Kearney said. “While Oil States’ counsel ably argues there is uncertainty in caselaw, there is no evidence an Oil States employee knew of these uncertainties before litigation began.”
A. Patricia Diulus-Myers represented Oil States and Joseph Chivers represented the workers. Neither responded to requests for comment.