A U.S. appeals court on Thursday said workers who use cranes attached to boats to load equipment onto offshore oil rigs are not "seamen" exempt from overtime pay under federal wage law, reviving a collective action against liftboat operator All Coast LLC.
The full 5th U.S. Circuit Court of Appeals voted 15-2 to deny en banc review to All Coast and reinstated a three-judge panel's unanimous February ruling that said the workers were engaged in industrial activities that had no bearing on the operation or navigation of liftboats.
Liftboats are self-propelled supply vessels with three column-like legs, which can be quickly lowered to the sea floor to raise the vessel out of the water.
Former All Coast employee William Adams says he and other liftboat workers were misclassified as seamen exempt from the Fair Labor Standards Act, and unlawfully deprived of overtime pay. Workers like Adams spent up to 90% of their time operating cranes and not servicing the boats, according to filings in the case.
Circuit Judges Edith Jones and Jennifer Elrod dissented from the denial of en banc review, saying the panel decision "threatens uncertainty throughout the maritime industry" and marks the second time in a month that the 5th Circuit had misapplied FLSA exemptions.
Louisiana-based All Coast and its lawyers at Balch & Bingham and The Moeller Firm did not immediately respond to requests for comment.
Curt Hesse of Moore & Associates, who represents Adams, said the suggestion that the decision could upend the industry is untrue.
"As we pointed out in the briefs, there was actual evidence in the record ... that other liftboat companies in fact pay overtime to their workers," Hesse said. "This decision levels the playing field."
In a 2016 lawsuit in Louisiana federal court, Adams claimed the various job titles All Coast gave to liftboat workers, such as mates, deckhands, and seamen, concealed their true jobs as crane operators. Since they were not seamen involved primarily in servicing ships, they should have been paid overtime, Adams said.
U.S. District Judge Jane Milazzo in Lafayette, Louisiana disagreed and granted summary judgment to All Coast in 2019. Citing 5th Circuit precedent, she said the services provided by the workers aided "in the operation of such vessel as a means of transportation," making them seamen.
The 5th Circuit panel in the February ruling reinstated on Thursday reversed. The court said that while the workers "acted as a normal nautical crew" when a boat was on the move, the loading and unloading duties they primarily performed had no connection to liftboat operation.
The court remanded the case to Milazzo to determine whether the plaintiffs qualify for the FLSA exemption on other grounds.
The panel included Circuit Judges Edith Clement, Jerry Smith and Andrew Oldham.
The dissenting judges who voted for en banc review said on Thursday that even when liftboats were jacked up and not in motion, the crew members performed quintessential seaman's work such as standing lookout, checking engines and cleaning.
And "without the cranes, the liftboat serves no transportive purpose," Smith wrote, joined by Elrod.
Smith said the panel had adopted too narrow a view of the FLSA exemption and ignored the U.S. Supreme Court's holding in the 2018 case Encino Motorcars LLC v. Navarro that exemptions from the law must be given a "fair reading."
The 5th Circuit, Smith said, made the same mistake in its Sept. 9 en banc ruling in Hewitt v. Helix Energy Solutions Group Inc, which said a management-level oil rig worker who earned $200,000 a year must be paid overtime because he was compensated at a daily rate and thus not FLSA exempt.
The case is Adams v. All Coast LLC, 5th U.S. Circuit Court of Appeals, No. 19-30907.
For Adams: Melissa Moore and Curt Hesse of Moore & Associates
For All Coast: Armin Moeller of Balch & Bingham; and Matthew Moeller of The Moeller Firm