A U.S. Supreme Ct Justice Invites The Oil And Gas Industry Challenge To Labor Law

Is he worried that Saudi Aramco and Exxon Mobil Corp. are being cheated by greedy American workers?

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U.S. Supreme Court Justice Brett M. Kavanaugh recently invited the oil and gas industry to challenge a U.S. law that requires employers to pay overtime to highly compensated employees who don’t earn a salary.

It not easy to empathize with highly compensated people … but if your employer chooses not to pay you a salary, and you are the equivalent of a day laborer, then why shouldn’t you get overtime?

The employer could give you a predictable salary and benefits, and avoid paying overtime.

Why is this a problem for Justice Kavanaugh?

Have Saudi Aramco and Exxon Mobil Corp. found a new champion on the U.S. Supreme Court?

Reuter reported that Justice Kavanaugh made his provocative comment during oral arguments last month in the oil and gas industry’s appeal of a 12-6 decision by the U.S. Court of Appeals for the Fifth Circuit in New Orleans ordering Helix oil rigs to pay overtime to Michael Hewitt, a non-salaried supervisor on Helix oil rigs.

“If the statutory argument is not here,” said Justice Kavanaugh, “I’m sure someone is going to raise it because it’s strong.” But is it strong?

The crux of the matter is that the U.S. Congress included a loophole in the Fair Labor Standards Act of 1938 (FLSA) that allows employers to refuse to pay overtime to ”highly compensated executives.” The FLSA also states that employers must pay overtime to non-salaried employees who earn $455 per week. The key is the non-salaried part - if you are not entitled to a predetermined salary, you get overtime.

The full Fifth Circuit Court of Appeals in New Orleans overturned a 2-1ruling by a three-judge panel of the court that workers who are paid a daily rate do not receive a “salary” under the FLSA and are eligible for overtime pay. The oil and gas industry appealed to the U.S. Supreme Court.

Textualism v. What Justice Kavanaugh is Selling