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Company sues Department of Labor over employee classification dispute

By Gheni_Platenburg
Dec. 1, 2010 at 6:01 a.m.

A debate over contractors' classification as employees rather than independent contractors has led one Corpus Christi-based company to file a lawsuit against Hilda Solis, Secretary of Labor for the United States Department of Labor.

Gate Guard Services filed the lawsuit on Nov. 19 in Victoria's federal court.

The lawsuit alleges that following a department of labor investigation earlier this year, the department issued an enforcement action against the company in November, claiming the company was in violation of the Fair Labor Standards Act of 1938.

The company contracts with individuals and or entities to log vehicles that enter and depart oil fields during drilling and production operations.

The plaintiff denied the contractors could be identified as employees under FLSA standards based on the nature of their jobs.

According to the lawsuit, when vehicles enter or depart an oil field, the contractors are responsible for recording the drivers' names, companies, license tag numbers, dates and times in traffic logs, which are used to identify persons present at the oil field in case of an emergency.

Each contractor provides his own tools, equipment and camper or recreational vehicle to sleep in, is allowed to sleep at least five to eight hours per 24-hour period, is paid between $100 and $175 a day, has three uninterrupted meals a day and is allowed to pursue personal activities when no vehicles are present, according to the lawsuit.

The company claimed to provide no instruction to the contractors regarding the manner in which their work is performed and otherwise have no contact with the contractors other than interacting with them while servicing the provided septic tank every week or every other week.

In addition, the Department of Labor also ordered the company to be in compliance with the Fair Labor Standards Act; contractors must be compensated at the federal minimum wage for 24 hours each day they are assigned to an oil field operation with no deductions for sleep time, meal time or the time the contractors spend engaged in personal activities.

The department also found the company owed $6.19 million in back wages, which includes overtime payments, accumulated from July 2008, according to the lawsuit.

Gate Guard Services disputed all the allegations.

The plaintiff requested the court declare the workers as independent contractors and not employees, that the guard services had complied with the minimum FLSA wage provisions and declared that contractors are "waiting to be engaged" at times they are not logging vehicles and subsequently should not be paid during those times.

A Department of Labor spokeswoman declined to comment on the case, and calls made to both Gate Guard Services and its Houston-based attorney, Daniel Pipitone, were not immediately returned.

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