The Fair Labor Standards Act (the Act or the FLSA); Whether plaintiff was a “salaried” worker under the Act; Effect of Gentry v Hamilton-Ryker IT Sols, LLC (5th Cir); “Offensive issue preclusion”; Parklane Hosiery Co v Shore; Whether plaintiff was entitled to overtime under the Act; 29 USC § 213(a)(1); 29 CFR § 541.200; The “salary-basis test” (§ 541.602); Helix Energy Sols Group v Hewitt

The court held that defendant-employer (Hamilton-Ryker IT Solutions) was improperly granted summary judgment on plaintiff-employee’s (Pickens) claim for overtime pay under the FLSA where under the “salary-basis test,” Pickens was actually an “hourly” and not a “salaried” worker. Pickens is a pipe inspector. Hamilton-Ryker, an employment agency, assigned him to a natural-gas export terminal in Texas. It paid him a “guaranteed weekly salary” of $800, based on $100 an hour daily wage. If Pickens worked more than eight hours in any given week, it paid him an additional $100 per hour. His average earnings were $5,200 per week, with an average annual salary of $270,400. He was not paid overtime because Hamilton-Ryker classified him as a salaried worker exempt from the Act. Pickens sued, arguing that he was a non-exempt hourly worker, and other employees joined “the lawsuit, filed as a ‘collective action’ under the Act.” The district court granted Hamilton-Ryker summary judgment, finding Pickens was a salaried worker. On appeal, the court first addressed his argument that a Fifth Circuit case, Gentry, already decided that Hamilton-Ryker had to pay overtime to workers under the same circumstances. The court held that “offensive issue preclusion” was unavailable here where Pickens could have joined that suit but instead “chose to carve out his claims and pursue separate litigation.” Turning to the merits, the court applied the salary-basis test and held that “[t]o be paid on a weekly basis, . . . an employee must be paid for a regular week’s worth of work. . . . [T]he week must serve as the fundamental unit around which the payment is structured.” It determined that “a salary that does not compensate an employee for his ‘regular work’ is not a salary.” In this case, Pickens was not paid a salary but was “guaranteed payment for a single day’s work. . . . [T]he rate Pickens received compensated him for either an hour’s work or eight hours’ work.” He was not paid “a ‘full salary for any week in which’ he ‘perform[ed] any work,’” and instead was paid “‘with[] regard to the number of . . . hours worked . . . .’” As a result, his “supposed ‘salary’ of $800—for one day’s work—simply did not count as a salary under” § 602(a)(1). Reversed and remanded.