Dole v. Petroleum Treaters, Inc., 88-3445

• Decision Date: 06 July 1989
• Docket Number: No. 88-3445,88-3445
• Citation: 876 F.2d 518
• Parties: 29 Wage & Hour Cas. (BN 582, 1989 A.M.C. 2679, 112 Lab.Cas. P 35,237 Elizabeth DOLE, Secretary of Labor, U.S. Department of Labor, Plaintiff-Appellant, v. PETROLEUM TREATERS, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 518

876 F.2d 518

29 Wage & Hour Cas. (BN 582, 1989 A.M.C. 2679,

112 Lab.Cas. P 35,237

Elizabeth DOLE, Secretary of Labor, U.S. Department of Labor, Plaintiff-Appellant, v. PETROLEUM TREATERS, INC., Defendant-Appellee.

No. 88-3445.

United States Court of Appeals Fifth Circuit.

July 6, 1989.

Rehearing Denied Aug. 25, 1989.

Rehearing Denied Aug. 25, 1989.

Linda Jan S. Pack, William J. Stone, Dept. of Labor, Washington, D.C., George R. Salem, Sol. of Labor, U.S. Dept. of Labor, Daniel Curran, Atty., Dallas, Tex., for plaintiff-appellant.

Charles E. Lugenbuhl, Lugenbuhl, Burke, Wheaton, Peck & Rankin, New Orleans, La., for defendant-appellee.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before THORNBERRY, WILLIAMS and DAVIS, Circuit Judges.

JERRE S. WILLIAMS, Circuit Judge:

The Department of Labor appeals the dismissal of its case against Petroleum Treaters, Inc., which sought to enjoin Treaters from violating the provisions of Sec. 7 and Sec. 15(a)(2) of the Fair Labor Standards Act of 1938 (FLSA), as amended, 29 U.S.C. Sec. 201, et seq., and to recover withheld overtime compensation that was due Treaters' employees under the FLSA. The district court dismissed the case, finding that Treaters' employees are exempt from the Act because they are "seamen" under Sec. 13(b)(6). We reverse this finding and remand for the calculation of overtime due Treaters' employees under the Act. ¹

I. Facts and Prior Proceedings

Petroleum Treaters is a Louisiana corporation engaged in the servicing of oilfield platforms in south Louisiana. This service consists of clearing flow lines by using a hot oil chemical to remove paraffin build-up from the wells. The work is performed from barges that are anchored or tied to the oil wells. A two-man crew performs the maintenance of the wells and operates a "push-boat." The push boat tows the barge, which is immobile on its own, from one location to another. The crew typically works 7 days and then is off 7 days, although the actual number of days and hours of work vary. According to the uncontradicted testimony of the employees at trial, 50 to 80 percent of the two-man crew's worktime involves maintenance of the wells from the barge, with the remainder of the time spent towing the barge.

Until June 15, 1986, the employees were paid on an hourly basis and received time-and-one-half for the additional hours they worked over 40. After June 15, Treaters introduced a pay plan which provided for a "day rate" to employees. The rate is based upon a twelve hour day, with hourly increments based upon the day rate for each hour worked over the twelve hour base period. Treaters claims it went to the day rate in order to gain better control over labor costs and to maintain all the company's employees despite severe depression of the oilfield economy. While Treaters maintains the new day rate takes into account overtime factors, the employees are simply paid a flat rate per number of hours worked that is equal to the hourly wage rate they were paid prior to the change. ²

The Secretary of Labor brought this action pursuant to Sec. 17 of the FLSA, 29 U.S.C. Sec. 217, to enjoin Treaters from violating the Act's overtime requirements. The Act requires overtime be paid at time-and-one-half. The Secretary sought back wages on behalf of the 32 workers involved for overtime pay earned after June 15, 1986, the date Treaters changed its system of wage payment, plus prejudgment interest on those back wages.

In defending the action, Treaters asserted that the employees were exempt from the FLSA's overtime requirements because they are "seamen" under the Jones Act, 46 U.S.C.App. Sec. 688. Under the FLSA, 29 U.S.C. Sec. 213(b)(6), any employee "employed as a seaman" is exempt. Because the employees are clearly "seamen" under the Jones Act, Treaters argued they should also be considered "seamen" under the FLSA. The district court agreed with Treaters and dismissed the suit. The court found it unlikely that Congress intended to ascribe a different meaning to the term under the two acts.

The court in reaching this decision refused to apply both the Secretary of Labor's interpretation of the FLSA "seamen" exemption and prior precedent of this Court. We reverse the district court's dismissal, finding the court's conclusions incorrect. ³ The court failed to define "seamen" correctly by not undertaking the required analysis under the FLSA. The inquiry must be into the particular work performed by each employee and the relative proportion of actual seaman work as defined by the FLSA to nonseaman work.

II. Applicability of Jones Act "Seamen" to the FLSA

The employees in question are clearly Jones Act seamen. The evidence established that they are more or less permanently attached to vessels in navigation and that the activities in which they are engaged contribute to the function of the vessels. Barrett v. Chevron, U.S.A., Inc., 781 F.2d 1067, 1074-75 (5th Cir.1986). The issue then is whether the use of "seaman" by Congress in the FLSA exemptions without specifically defining the term was an indication from Congress to use the same meaning it has under the Jones Act. Treaters had the heavy burden of demonstrating that its workers "plainly and unmistakably [came] within" the scope of the exemption because of the Jones Act definition. Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392, 80 S.Ct. 453, 456, 44 L.Ed.2d 393 (1960).

Unlike the district court, we find that the definitions of seamen under the two acts are separate and independent of each other. We reach this conclusion by looking to prior precedent, the Department of Labor's interpretations of the FLSA, the legislative histories and purposes of the statutes, and the structure and wording of Sec. 13 of the FLSA.

A. Prior Precedent: W.D. Haden

In Walling v. W.D. Haden, 153 F.2d 196 (5th Cir.), cert. denied, 328 U.S. 866, 66 S.Ct. 1373, 90 L.Ed.2d 1636 (1946), this Court addressed the applicability of the seaman exemption to workers on dredgeboats. We found the exemption inapplicable by looking to what the workers were "employed as," and by looking to the meaning of "seaman" under the FLSA.

After noting that the FLSA does not define the term, this Court gave the term "seaman" its ordinary meaning by looking to Webster's International Dictionary, which defines it as " 'one whose occupation is to assist in the management of ships at sea; a mariner.' " 153 F.2d at 198. The Court then analyzed what the workers principally were hired to do using this ordinary meaning of the term.

We recognized that the workers had some "seamen" duties. They had to manage the dredgeboats and barges as vessels. We went on, however, to find that their primary duties involved the production of shells by dredging, a duty the Court found more properly characterized as "industrial" and "nonseamen." 153 F.2d at 199. The Court thus found that since the workers were principally "employed as" industrial workers and not seamen, the exemption preventing application of the FLSA to them did not apply.

W.D. Haden controls this case. Here, the workers clearly have some seamen duties in that they must operate their vessels, the push-boat and the barge, between oil wells. They are principally employed, however, to service and maintain the wells, a duty that is properly characterized as a "nonseamen" duty. It is uncontroverted that at least half of their time is spent in this maintenance. Thus, under the reasoning of W.D. Haden, the exemption does not apply to the two-man crews, and they are entitled to receive the overtime provided for them under the FLSA. But to Treaters' claim that the law has changed since 1946 and the W.D. Haden case, we find other support as well for our holding. ⁴

B. The Secretary's Interpretations of the Seaman Exemption

The interpretation of the seaman exemption by the Secretary of Labor has always been consistent with W.D. Haden. The interpretation of the exemption states:

[A]n employee will ordinarily be regarded as "employed as a seaman" if he performs ... service which is rendered primarily as an aid in the operation of [a] vessel as a means of transportation, provided he performs no substantial amount of work of a different character.

29 C.F.R. Sec. 783.31. ⁵ The Secretary's interpretation also provides:

[A]n employee will be regarded as "employed as a seaman" if his work as a whole meets the test stated in Sec. 783.31, even though during the workweek he performs some work of a nature other than that which characterizes the service of a seaman, if such nonseaman's work is not substantial in amount. For enforcement purposes, the Administrator's position is that such differing work is "substantial" if it occupies more than 20 percent of the time worked by the employee during the workweek.

29 C.F.R. Sec. 783.37. ⁶ These findings of the Department of Labor are entitled to great weight by the courts. Tony & Susan Alamo Foundation v. Secretary of Labor, 471 U.S. 290, 297, 105 S.Ct. 1953, 1959, 85 L.Ed.2d 278 (1985). The fact that the interpretation has not varied since the FLSA's enactment also entitles it to "great respect." Chemehuevi Tribe of Indians v. Federal Power Commission, 420 U.S. 395, 410, 95 S.Ct. 1066, 1075, 43 L.Ed.2d 279 (1975).

The Secretary's interpretation, as did this Court in W.D. Haden, calls for an examination of the nature of the work actually performed by the employees and of the comparative amount of seamen versus nonseamen duties, without making any reference to the Jones Act. This inquiry is consistent with the entire FLSA's underlying theme that "what each employee actually does determines its application to him." 153 F.2d at 196.

The Ninth Circuit has expressly adopted the Secretary's interpretation and other circuits have applied an analysis that parallels W.D. Haden and the Secretary's interpretation. See Worthington v. Icicle Seafoods, Inc., 796 F.2d 337, 338 (9th Cir.1986) (decision...