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Judge orders US government to pay company's legal fees

By Jessica Priest
April 12, 2014 at 10:01 p.m.
Updated April 12, 2014 at 11:13 p.m.

A South Texas oil-field services company that was embroiled in a three-year dispute with the U.S. Department of Labor is getting some relief to the tune of almost $600,000.

Federal Judge John D. Rainey issued a 20-page opinion last week ordering the government to pay Gate Guard Services' legal fees.

Gate Guard Services never wavered in its assertion that its gate attendants should be contractors, not employees, said its Atlanta-based attorney, Annette Idalski.

Small businesses across the nation will reap benefits from this most recent decision.

"Oftentimes, employers will be afraid when they are audited and turn their workers into employees before a case is resolved to minimize damages," said Idalski. "I think what will happen is more businesses will start to fight back."

The U.S. Department of Labor received the decision and is evaluating its options, spokeswoman Diana Petterson wrote via email Thursday.

In 2010, the government sought more than $6 million in back pay from the company. Rainey ruled in favor of Gate Guard, though, in February 2013.

For this most recent decision, Rainey examined whether the government's position was "substantially justified."

The government stonewalled Gate Guard Services at every turn, refusing to turn over documents and filing a duplicate lawsuit in another court, Idalski said.

"When we questioned DOL investigators during depositions, they admitted to multiple errors, mistakes and poor judgment," she said.

Rainey took the government to task for not following procedures, too, pointing out it interviewed only a handful of gate attendants when there were hundreds available.

"Also unsettling is the fact that (one investigator) destroyed all of his interview notes taken between July and November 2010 by shredding and/or burning them," Rainey wrote.

Gate Guard Services initially requested the government pay about $800,000 in legal fees.

The company was worth a little more than $6 million and had 37 employees at the time the lawsuit was filed, one of the other things Rainey was required to evaluate.

Today, the company has about 600 gate attendants, classified as contractors, not employees, Idalski said.

Gate attendants, paid between $100 and $175 daily, log vehicles that come through drilling operations. They may engage in other activities when not busy, according to earlier reports.



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