Opinion
CAUSE NO. 1:16-CV-8-LY
2021-12-15
John GILCHRIST and Byron Brockman, Plaintiffs, v. SCHLUMBERGER TECHNOLOGY CORPORATION, Defendant.
Jack Siegel, Siegel Law Group PLLC, J. Derek Braziel, Braziel Dixon, LLP, Dallas, TX, for Plaintiffs. Geoffrey A. Mitchell, Robert Peter Lombardi, Samuel Zurik, III, The Kullman Firm, P.L.C., New Orleans, LA, for Defendant.
Jack Siegel, Siegel Law Group PLLC, J. Derek Braziel, Braziel Dixon, LLP, Dallas, TX, for Plaintiffs.
Geoffrey A. Mitchell, Robert Peter Lombardi, Samuel Zurik, III, The Kullman Firm, P.L.C., New Orleans, LA, for Defendant.
INITIAL FINDINGS OF FACT AND CONCLUSIONS OF LAW
LEE YEAKEL, UNITED STATES DISTRICT JUDGE Before the court is the above-styled and numbered cause. On August 13, 2018, the court called the case for bench trial. Plaintiffs appeared in person and by attorney. Defendant appeared through its corporate representative and by attorney. The trial concluded August 15, 2018, and the parties submitted post-trial briefing. Having carefully considered the briefing, proposed findings of fact and conclusions of law, exhibits, arguments of counsel, applicable law, and entire case file, the court makes the following findings of fact and conclusions of law.
All findings of fact contained herein that are more appropriately considered conclusions of law are to be so deemed. Likewise, any conclusion of law more appropriately considered a finding of fact shall be so deemed.
I. Jurisdiction
The court has jurisdiction over this cause because Plaintiffs John Gilchrist and Byron Brockman's claims arise under the laws of the United States. See 28 U.S.C. § 1331.
II. Background
The Fair Labor Standards Act ("FLSA") requires employers to provide overtime compensation to employees who work over 40 hours in a workweek. See 29 U.S.C. § 207(a). Plaintiffs were employed by Defendant Schlumberger Technology Corporation ("Schlumberger"). Schlumberger classified Plaintiffs as exempt from the FLSA's overtime requirements and did not pay Plaintiffs overtime compensation. Plaintiffs sue Schlumberger, alleging misclassification and seeking unpaid overtime pay, liquidated damages, court costs, attorney's fees, and pre- and post-judgment interest.
The central dispute in this case is whether Plaintiffs performed the types of job duties that warrant an FLSA exemption. Generally, an employee's role must meet three conditions to qualify for an exemption: (1) the employee must meet certain minimum income thresholds, (2) the employee must be paid on a "salary basis," and (3) the employee must perform certain executive, administrative, or professional duties. Hewitt v. Helix Energy Sols. Grp., Inc. , 15 F.4th 289, 290-91 (5th Cir. 2021). A separate FLSA exemption exists for a "highly compensated employee" who regularly performs at least one executive, administrative, or professional duty. See 29 C.F.R. § 541.601. The parties stipulate that Schlumberger paid Plaintiffs guaranteed salaries meeting the minimum income thresholds. The parties also stipulate that Schlumberger paid Plaintiffs on a "salary basis." The parties disagree, however, on whether Plaintiffs’ work involved certain administrative or executive duties that would exempt Plaintiffs from the FLSA's overtime-pay requirements. Because this dispute centers around Plaintiffs’ job duties, the court will begin by discussing Plaintiffs’ daily tasks and responsibilities during their employment with Schlumberger.
Schlumberger does not argue that the "professional" exemption applies or that Plaintiffs regularly performed at least one "professional" duty.
A. Plaintiff John Gilchrist
Gilchrist's employment with Schlumberger began June 18, 2012, and ended March 25, 2015. The relevant period of Gilchrist's employment is January 7, 2014, through March 25, 2015. Gilchrist worked as a Measurements-While-Drilling Field Specialist out of Midland, Texas.
The parties stipulate that the relevant time period for each Plaintiff is the working time within the two years prior to January 6, 2016, when Plaintiffs filed consent to participate in this lawsuit.
B. Plaintiff Byron Brockman
Brockman's employment with Schlumberger began June 16, 2013, and ended December 14, 2015. The relevant period of Brockman's employment is January 7, 2014, through December 14, 2015. Brockman worked as a Measurements-While-Drilling Field Specialist out of Conway, Arkansas.
Both Plaintiffs testified at trial and were thoroughly cross examined. The court had ample opportunity to observe and evaluate their credibility and demeanor. The court finds Plaintiffs’ testimony credible in all respects.
C. Field Specialist Job Duties
Schlumberger provides oilfield services to exploration and development clients. Plaintiffs’ role as Field Specialists centered around "measurements-while-drilling" services, which gave Schlumberger's clients "downhole" information such as drilling trajectory, pressure, and temperature. Schlumberger's clients used these measurements to determine how to continue drilling and how to best produce hydrocarbons.
Plaintiffs generally worked "on location," meaning at the site where oil and gas drilling occurs. Plaintiffs’ work centered around the oil "rig"—the structure used to drill a wellbore. Other types of employees that worked on location included "directional drillers" (who steer the drilling along a predetermined path), "drillers" (who supervise the rig crew), "roughnecks" (who work on the rig while drilling occurs), and the "company man" (who leads and supervises the entire operation). The Field Specialist position did not require formal education beyond a high-school diploma, but Schlumberger required in-classroom and on-the-job training for new hires.
Upon arriving on location, Plaintiffs would begin with the process of "rigging up." Rigging up first involved gathering the necessary tools, wires, and cables to be used for downhole measurements. Plaintiffs connected the various cables from computers in an on-site trailer office (the "shack") to sensors on the drilling equipment. Plaintiffs also set up the software needed to run the measurements. Depending on the job site and other factors such as weather, rigging up took between three to six hours. Plaintiffs periodically repeated this process when components of the measuring tool or drilling equipment broke or required adjustment.
After Plaintiffs successfully rigged up the measuring tool, they would return to the shack to monitor the computers for incoming measurement data. Sensors on the downhole equipment sent pulses through the cables to computers in the shack. The computers used various software programs to decode the downhole data and present it to Plaintiffs for review. The computer system generated periodic "surveys" containing different downhole measurements and data points. When the system generated a survey, the computers displayed the information in green or in red. A green survey indicated that the data aligned with Schlumberger's "field acceptance criteria," which was a set of pre-determined numbers and ranges built into the software that indicated whether a survey was "good" (green) or "bad" (red). If the survey was green, Plaintiffs accepted the data and shared the information with the directional driller, who used the information to guide and steer the drill along the drilling path. If the survey was red, Plaintiffs notified the directional driller and the employees controlling the rig equipment, who would run the survey again. If additional surveys continued to come back red, Plaintiffs would try several basic fixes and then contact employees in Schlumberger's off-site "Operations Support Center," who would work to solve the problem. The Operations Support Center would take a variety of actions, including requesting files and screenshots from Plaintiffs, communicating with Plaintiffs by phone or by messaging software, and taking remote control of Plaintiffs’ computers.
Plaintiffs generally worked in 12-hour shifts while on location, and each of Plaintiffs’ job assignments lasted between two to six weeks. Every shift involved between 15 to 50 surveys. Plaintiffs periodically sent reports with information from the surveys to the directional driller and to the client. Plaintiffs also monitored a continuous information log that displayed downhole data on pressure, temperature, vibrations, radioactive activity, and other parameters.
In addition to the job duties surrounding the computer system in the shack, Plaintiffs occasionally attended safety meetings, worked with Field Specialist trainees, and generated reports and forms for Schlumberger and its clients. Plaintiffs generally did not provide input in the safety meetings, and most job-specific safety tasks involved informal discussions between employees. When a Plaintiff worked with a trainee, the trainee shadowed and observed the Plaintiff, but the Plaintiff did not generally provide formal instruction. Plaintiffs did not directly participate in Schlumberger's hiring and firing decisions but would fill out paperwork on a trainee's performance and give input on a trainee when asked. Gilchrist also prepared a state-required document for his job assignments using information from the surveys. Gilchrist would submit the document to Schlumberger, and a higher-level employee would review, sign, and file the document with the Texas Railroad Commission.
At the end of each job assignment (once the well reached "total depth"), Plaintiffs would begin the "rigging down" process. Rigging down required Plaintiffs to complete a final survey, remove the various cables and tools from the rig, and pack up the equipment. After successfully rigging down the well, Plaintiffs gathered information from the computer system about the well site, sent various reports to the Operations Support Center for final review, and then compiled the information for a final end-of-well information packet for Schlumberger's client. Plaintiffs then received information from their supervisor about their next job assignment and repeated the process.
D. Procedural History
Plaintiffs filed this action on January 7, 2016, alleging that Schlumberger willfully failed to pay Plaintiffs overtime wages in accordance with the FLSA. Schlumberger timely answered, asserting a variety of affirmative defenses and arguing that it properly classified Plaintiffs as exempt.
Prior to trial, the court granted a motion for summary judgment by Schlumberger on the issue of willfulness, finding that Plaintiffs failed to establish that Schlumberger willfully misclassified Plaintiffs as exempt.
Following trial, Plaintiffs moved to reopen the evidence and discovery, seeking additional information that came to light in a similar lawsuit against Schlumberger filed in Louisiana. See Boudreaux v. Schlumberger Tech Corp. , No. 14-2267, 2014 WL 12950153 (W.D. La. filed July 8, 2014), mandamus granted , 818 F. App'x 304 (5th Cir. 2020). In the Boudreaux case, the parties deposed a former Schlumberger human-resources consultant who worked with Schlumberger's attorneys to review the FLSA status of the directional-driller and Field Specialist positions. 818 F. App'x at 306. Schlumberger refused to disclose testimony and documents about the FLSA reviews, arguing that the information was protected by the attorney-client privilege. Id. The district court granted a motion to compel disclosure, but the circuit court vacated the district court's decision. Id. at 308. In light of the circuit's decision, this court denied Plaintiffs’ motion to reopen the evidence and discovery.
Plaintiffs argue that Schlumberger failed to prove that an FLSA exemption applies. Schlumberger argues that the FLSA's highly-compensated-employee and administrative exemptions apply. For the reasons to follow, the court concludes that Schlumberger misclassified Plaintiffs as exempt under the FLSA. Plaintiffs are therefore entitled to recover overtime compensation from Schlumberger.
III. Analysis
The FLSA requires employers to pay "time and a half" to employees who work in excess of 40 hours during any given workweek. See 29 U.S.C. § 207(a). However, the FLSA also authorizes the Secretary of Labor to promulgate regulations exempting "bona fide executive, administrative, [and] professional" employees from the overtime-pay requirement. 29 U.S.C. § 213(a)(1). Using this authority, the Secretary has exempted certain "executive," "administrative," and "professional" employees, as well as certain "highly compensated" employees who perform at least one executive, administrative, or professional duty. See 29 C.F.R. §§ 541.100, 541.200, 541.300, 541.601.
The employer has the burden of showing by a preponderance of the evidence that an FLSA exemption applies. Hobbs v. EVO Inc. , 7 F.4th 241, 248 (5th Cir. 2021). Courts must give FLSA exemptions a "fair reading," not a narrow one. Encino Motorcars, LLC v. Navarro , ––– U.S. ––––, 138 S. Ct. 1134, 1142, 200 L.Ed.2d 433 (2018). Whether an employee falls within an exemption is a question of law. Hobbs , 7 F.4th at 248. Issues of "how an employee spends his working time" and "[i]nferences about the nature of an employee's work" are questions of fact. Id. The court will address Schlumberger's claimed exemptions in turn.
A. Highly-compensated-employee Exemption
Schlumberger first argues that Plaintiffs are "highly compensated employees" that perform at least one administrative or executive duty and are therefore exempt from the FLSA's overtime-pay requirement. See 29 C.F.R. § 541.601. To succeed in this argument, Schlumberger must establish that Plaintiffs: (1) receive at least $100,000 in annual compensation, (2) perform primary duties of office or non-manual work, and (3) customarily and regularly perform any one or more of the exempt duties or responsibilities of an executive or administrative employee. Hobbs , 7 F.4th at 248. The parties stipulate that Gilchrist received $216,420.47 in total compensation over his relevant 62-week period of employment and that Brockman received $277,312.93 in total compensation over his relevant 90-week period of employment. The parties agree that Plaintiffs’ salaries satisfy the exemption's first requirement. The parties do not appear to dispute the second requirement—that Plaintiffs performed primary duties of office or non-manual work—although Plaintiffs note that the job involved short periods of manual labor, like the hours spent "rigging up" or "rigging down." Because the bulk of Plaintiffs’ work occurred in the shack and involved monitoring the computer system, reviewing surveys, and compiling reports, the court finds that Plaintiffs’ primary duties involved the type of office or non-manual work that satisfies the second requirement. The central issue involves the third requirement—whether Plaintiffs "customarily and regularly" performed at least one of the duties or responsibilities of an executive or administrative employee.
1. Executive Duties
Schlumberger argues that Plaintiffs customarily and regularly performed four separate executive duties: (1) "manag[ing] ... a customarily recognized department or subdivision thereof"; (2) "direct[ing] the work of two or more other employees"; (3) training employees; and (4) "planning the work" at a job site. See 29 C.F.R. §§ 541.100(a), 541.100(a)(3), 541.102.
First, Schlumberger argues that Plaintiffs "manage[d] ... a customarily recognized department or subdivision thereof." See 29 C.F.R. § 541.100(a)(2). A "customarily recognized department or subdivision" refers to "a unit with permanent status and function," not a "mere collection of employees assigned from time to time to a specific job." 29 C.F.R. § 541.103(a). Schlumberger argues that because Plaintiffs achieved the title of "lead" Field Specialists, they therefore "supervised" any junior Field Specialist or Field Specialist trainee that happened to be working at a job site. Though Brockman generally worked with another Field Specialist, Gilchrist more often worked as the only Field Specialist on location. Neither Plaintiff offered testimony that he managed a junior Field Specialist. If a trainee worked alongside a Plaintiff on a particular job, the Plaintiff would allow the trainee to shadow, observe, and ask questions, but the Plaintiff would not otherwise manage the trainee's activities. Schlumberger assigned a variety of trainees and Field Specialists to a particular job, and a Plaintiff did not necessarily work with the same trainee or junior Field Specialist in every assignment. The court finds that an occasional junior Field Specialist or Field Specialist trainee working alongside a Plaintiff does not constitute a "unit with permanent status and function," and therefore the court concludes that Plaintiffs did not customarily and regularly manage a "recognized department or subdivision thereof."
Second, Schlumberger argues that Plaintiffs customarily and regularly "direct[ed] the work of two or more other employees." See 29 C.F.R. § 541.100(a)(3). Schlumberger again notes that Plaintiffs occasionally worked with other Field Specialists or Field Specialist trainees. Schlumberger also argues that Plaintiffs "directed" the rig crew at certain points during the rigging-up or rigging-down process. Plaintiffs testified that any "supervision" of the rig crew was limited to giving the occasional direction or hand signal while the crew lowered the measurement tools into the well. Plaintiffs did not testify that they directed the work of any Field Specialist or trainee that happened to be working on the same job site. The court concludes that Plaintiffs did not customarily and regularly "direct the work of two or more other employees."
Third, Schlumberger argues that Plaintiffs customarily and regularly trained junior Field Specialists. See 29 C.F.R. § 541.102 (" ‘management’ includes ... interviewing, selecting, and training [ ] employees"). Gilchrist testified that he worked alongside a trainee about 50% of the time, and Brockman testified that he worked alongside a trainee about 50 to 75% of the time. Plaintiffs testified that the trainees mostly shadowed and observed Plaintiffs’ work. Plaintiffs also testified that most of the formal training for the Field Specialist position occurs in a classroom-based setting. Though Plaintiffs would fill out paperwork related to a trainee they worked with and would answer questions about the trainee when asked, Plaintiffs did not participate in Schlumberger's hiring decisions. The applicable regulation discusses the executive "training" duty in the context of "interviewing, selecting, and training [ ] employees." 29 C.F.R. § 541.102. Although the occasional trainee shadowed and observed Plaintiffs, the court concludes that Plaintiffs did not customarily and regularly engage in "interviewing, selecting, and training [ ] employees."
For the last executive duty, Schlumberger argues that Plaintiffs customarily and regularly engaged in "planning the work" involved at a job site. See 29 C.F.R. § 541.102. Specifically, Schlumberger argues that Plaintiffs participated in "pre-job planning," where Plaintiffs would receive packets of information about upcoming job assignments and would occasionally attend meetings before arriving on location. However, Gilchrist testified that he referenced the "pre-job packet" mostly for instructions on how to get to the job site. Brockman testified that his role on pre-job calls mostly involved listening while the client relayed information to the directional driller. Neither testified that he played any significant role in developing a plan for a well site prior to a job assignment. The court concludes that Plaintiffs did not customarily and regularly engage in "planning the work" at the job sites.
2. Administrative Duties
Schlumberger also argues that Plaintiffs customarily and regularly engaged in five separate administrative duties: (1) "exercis[ing] [ ] discretion and independent judgment with respect to matters of significance"; (2) performing a "quality control" function; (3) performing "safety and health" duties; (4) performing duties related to "legal and regulatory compliance"; and (5) performing work "directly related to the management or general business operations of [Schlumberger's] customers." See 29 C.F.R. § 541.200(a)(3), 541.201(b) ; 541.201(c).
First, Schlumberger argues that Plaintiffs "exercise[d] [ ] discretion and independent judgment with respect to matters of significance." See 29 C.F.R. § 541.200(a)(3). The applicable regulations note that the phrase "discretion and independent judgment" must be "applied in light of all the facts involved in the particular employment situation." 29 C.F.R. § 541.202(b). Exercising discretion and independent judgment "involves the comparison and the evaluation of possible courses of conduct and acting or making a decision after the various possibilities have been considered." 29 C.F.R. § 541.202(a). The regulations list a variety of factors to consider when determining whether "discretion and independent judgment" exists, including: "whether the employee has authority to waive or deviate from established policies and procedures without prior approval," "whether the employee has authority to negotiate and bind the company on significant matters," and "whether the employee investigates and resolves matters of significance on behalf of management." Id. The exercise of discretion and independent judgment also "implies that the employee has authority to make an independent choice, free from immediate direction or supervision." 29 C.F.R. § 541.202(c). However, employees can exercise discretion and independent judgment "even if their decisions or recommendations are reviewed at a higher level." Id. Exercising discretion and independent judgment involves "more than the use of skill in applying well-established techniques, procedures or specific standards described in manuals or other sources." 29 C.F.R. § 541.202(e).
Schlumberger argues that Plaintiffs exercised discretion and independent judgment when deciding whether to accept or reject surveys and when monitoring the continuous data logs. Specifically, Schlumberger argues that Plaintiffs exercised discretion and independent judgment when a survey came back as red because Plaintiffs would have to troubleshoot and solve the issue. Schlumberger also references testimony from Ruben Perez—a quality compliance manager for Schlumberger—noting that Field Specialists have the ability to reject green surveys and accept red surveys under certain circumstances. Perez testified that the recognition of magnetic interference, for example, might cause a Field Specialist to accept a red survey, or the recognition of incorrect decoding might cause a Field Specialist to reject a green survey. However, Gilchrist and Brockman repeatedly testified that if a survey was green, they accepted it because it fit Schlumberger's predetermined "field acceptance criteria." Even if Plaintiffs could theoretically use discretion and independent judgment to reject a green survey, the testimony did not indicate that this ever occurred, yet alone that it customarily and regularly occurred. Further, Plaintiffs testified that if a survey came up red, their primary troubleshooting method was to re-run the survey. If the survey continued to come back red after additional attempts, Plaintiffs would contact the Operations Support Center, which would take actions such as offering fixes for solving the problem, requesting additional files or screenshots from Plaintiffs, or even assuming remote control of Plaintiffs’ computer systems.
After considering the various definitions and factors listed in Section 541.202, the court finds that Plaintiffs’ duties did not involve the exercise of discretion and independent judgment. Plaintiffs rarely, if ever, deviated from the policies and procedures that they learned in Schlumberger's training for Field Specialists, which were to (1) accept green surveys, (2) re-run any red surveys, and (3) quickly get the Operations Support Center involved if re-running a red survey did not solve the issue. See 29 C.F.R. § 541.202(e) (discretion and independent judgment requires more than "the use of skill in applying well-established techniques, procedures or specific standards"). Both Plaintiffs credibly testified that the process for reviewing surveys and monitoring the measurement logs largely involved following a set of protocols and alerting higher-level employees if the protocols did not solve the issue. Plaintiffs did not exercise "independent choice, free from immediate direction or supervision"; they did not "investigate[ ] and resolve[ ] matters of significance on behalf of management"; and they did not demonstrate "authority to waive or deviate from established policies and procedures without prior approval." See 29 C.F.R. § 541.202(b), (c). Plaintiffs did not "act[ ] or mak[e] a decision" after performing basic troubleshooting techniques on the surveys, but would instead contact higher-level employees. See 29 C.F.R. § 540.202(a); see also Hobbs , 7 F.4th at 250-53 (oil-field engineers did not exercise discretion and independent judgment when monitoring and annotating downhole video footage); Dewan v. M-I, L.L.C. , 858 F.3d 331, 339 (5th Cir. 2017) (genuine issue of fact existed on whether oilfield mud engineers exercised discretion when they needed higher-level approval to deviate from established protocols). The court concludes that Plaintiffs did not customarily and regularly exercise discretion and independent judgment with respect to matters of significance.
Second, Schlumberger argues that Plaintiffs performed a "quality control" function when reviewing surveys and monitoring the logs. See 29 C.F.R. § 541.201(b). There is a distinction between quality-control work related to "production" and quality-control work related to "administration." See Hobbs , 7 F.4th 241 at 255 ; Dewan , 858 F.3d at 337. If a quality-control duty is "functional, not conceptional" and "relate[s] more closely to [ ] production ... than to business administration," the FLSA exemption cannot apply. Hobbs , 7 F.4th at 255. The court finds that Plaintiffs’ duties of reviewing surveys and monitoring logs are "functional, not conceptual" because they largely relate to whether the directional driller can safely continue drilling along the well path. Plaintiffs’ duties are similar to those in Hobbs , which determined that field engineers who produced downhole video footage for clients engaged more in production, not in business administration. See id. Plaintiffs’ tasks of reviewing and monitoring surveys and logs also mirror an example given in Section 541.203(g), which notes that inspection work using "well-established techniques and procedures" and "techniques and skills acquired by special training or experience" does not constitute an administrative duty for exemption purposes. The court concludes that Plaintiffs did not customarily and regularly engage in the type of "quality control" work that warrants an FLSA exemption.
Third, Schlumberger argues that Plaintiffs customarily and regularly performed "safety and health" duties. See 29 C.F.R. § 541.201(b). Specifically, Schlumberger argues that Plaintiffs assumed responsibility for the safety of the rig crew while "rigging up" or "rigging down." Schlumberger also argues that Plaintiffs assumed responsibility for safety issues involving lithium batteries. Gilchrist testified that his interactions with the rig crew during "rigging up" or "rigging down" occasionally involved hand signals, but that he would not discuss safety with the crew unless there was a requested safety meeting. Similarly, Brockman testified that he would give the rig crew directions when they used the hoist, but he would only contribute to safety meetings when asked directly. Although Gilchrist's supervisor testified that Gilchrist received lithium-battery safety training, Plaintiffs did not testify about any event where battery safety became an issue. The record indicates that most safety meetings that Plaintiffs participated in involved more general advice like "drink plenty of water" and "keep [ ] hard hats on." The court concludes that Plaintiffs did not customarily and regularly perform "safety and health" duties warranting an FLSA exemption.
Fourth, Schlumberger argues that Gilchrist performed duties related to "legal and regulatory compliance." See 29 C.F.R. § 541.201(b). Specifically, Schlumberger argues that Gilchrist filled out a state-required form for every job site, and Schlumberger later filed the form with the Texas Railroad Commission. Gilchrist testified that he would fill out a regulatory document describing survey depths at the end of each job. However, Gilchrist noted that he would submit this document to Schlumberger, not to the Texas Railroad Commission. Gilchrist testified that he did not know what Schlumberger did with the document after receiving it. Because Gilchrist submitted the form to a higher-level employee who would sign and submit the document, the court concludes that Gilchrist did not customarily and regularly perform the type of "legal and regulatory compliance" warranting an FLSA exemption.
Finally, Schlumberger argues that Plaintiffs performed work "directly related to the management or general business operations of [Schlumberger's] customers." See 29 C.F.R. § 541.201(c). Schlumberger argues that in reviewing and monitoring the surveys and logs, Plaintiffs "act[ed] as advisers or consultants to [Schlumberger's] clients." Id. In determining whether an employee fits the regulation's concept of an advisor or consultant, courts evaluate whether the employee's activities relate to "management policies," "general business operations," and "policy determinations [for] how a business should be run." Dewan , 858 F.3d at 337 (quoting Bratt v. County of Los Angeles , 912 F.2d 1066, 1070 (9th Cir. 1990) ). Plaintiffs’ duty to monitor surveys and logs related to the drilling process, which in turn related to the client's success in extracting hydrocarbons. However, Plaintiffs’ duties did not directly relate to the client's management policies, general business operations, or policy determinations. Although Plaintiffs did periodically submit reports to Schlumberger's clients, these reports did not relate to the broader business considerations mentioned in Dewan and again in Hobbs . The court concludes that Plaintiffs did not customarily and regularly perform work "directly related to the management or general business operations of [Schlumberger's] customers."
Because the court finds that Plaintiffs’ duties did not include any relevant executive or administrative duty listed in the applicable regulations, the court concludes that Schlumberger did not establish that the highly-compensated-employee exemption applies.
B. Administrative-employee Exemption
Schlumberger also asserts that Plaintiffs fell within the FLSA's administrative-employee exemption. For this exemption to apply, "the employee must be one (1) who is ‘[c]ompensated on a salary or fee basis at a rate of not less than $455 per week;’ (2) ‘[w]hose primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers;’ and (3) ‘[w]hose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.’ " Dewan , 858 F.3d at 334 (citing 29 C.F.R. § 541.200). The parties do not contest that Plaintiffs received the requisite level of compensation or that Plaintiffs’ primary duty involved non-manual work. The heart of the dispute again concerns whether Plaintiffs performed the types of job duties contemplated in the applicable regulations. However, Schlumberger must meet an even higher bar for the administrative-employee exemption, as it requires that Plaintiffs’ "primary duty" include the exercise of discretion and independent judgment with respect to matters of significance. See 29 C.F.R. § 541.200 ; Hobbs , 7 F.4th at 256 (noting that administrative-employee exemption is a "more ambitious theory" than highly-compensated-employee exemption). The court concluded that Plaintiffs did not "customarily and regularly" exercise discretion and independent judgment with respect to matters of significance and the court now similarly concludes that Plaintiffs’ "primary duty" did not include the exercise of discretion and independent judgment with respect to matters of significance. Schlumberger did not establish that Plaintiffs fell within the FLSA's administrative-employee exemption.
C. Schlumberger's Liability
Having concluded that Schlumberger failed to establish any applicable FLSA exemption, the court now turns to the issue of what Plaintiffs can recover from Schlumberger. To recover unpaid overtime pay, Plaintiffs must prove: "(1) that there existed an employer-employee relationship during the unpaid overtime periods claimed; (2) that the employee engaged in activities within the coverage of the FLSA; [and] (3) that the employer violated the FLSA's overtime wage requirements." See Parrish v. Premier Directional Drilling, L.P. , 917 F.3d 369, 379 (5th Cir. 2019). The parties agree that (1) Plaintiffs and Schlumberger engaged in an employer-employee relationship, and (2) Schlumberger engaged in activities within the coverage of the FLSA. The court concludes that Plaintiffs proved the third requirement—that Schlumberger violated the FLSA's overtime-pay requirements—because the parties stipulate that Plaintiffs worked in excess of 40 hours per week without receiving overtime pay and Schlumberger failed to establish that an FLSA exemption applies. The court concludes that Plaintiffs may recover overtime pay from Schlumberger.
IV. Conclusion
The Fair Labor Standards Act and the Regulations promulgated under it often present a difficult path for a court to follow. The express policy of the FLSA is to eliminate "labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers." 29 U.S.C. § 202. Here, Schlumberger paid Gilchrist $216,420.47 for 62 weeks’ work and Brockman $277,312.93 for 90 weeks’ work. They clearly were highly-compensated employees, compensated well above the "standard of living necessary for [their] health, efficiency, and general well-being." At first blush, one would think they would fall well within the highly-compensated-employee exemption. But that exemption requires more than high compensation. It requires that in addition to high compensation, each must have performed at least one administrative or executive duty. Congress has rejected efforts to establish a category of employees exempt from the FLSA overtime requirements solely because of the employees’ high compensation. See Hewitt , 15 F.4th at 290. None can doubt that the removal of hydrocarbons from below the earth's surface has evolved into a highly technical and sophisticated process. But the level of expertise that Plaintiffs possess and exercised while employed by Schlumberger does not ipso facto create an exempt category. Schlumberger has failed in its burden to prove that either Gilchrist or Brockman performed an administrative or executive duty. In spite of their high compensation and arguably falling outside the class of employees Congress originally sought to protect under the FLSA, Schlumberger must pay them overtime compensation.
The court concludes that Plaintiffs did not fall within either the highly-compensated-employee or administrative-employee exemption of the FLSA, and Schlumberger is liable to them for overtime compensation.
The parties shall meet and confer and on or before January 18, 2022, provide the court with an agreed calculation of the damages to which Plaintiffs are entitled under these findings and conclusions.