Directional Driller was Independent Contractor

Engineer near oil well

From JDSupra, Richard Reibstein discusses a recent case in which a highly skilled directional driller was found to be an independent contractor working for a company that used both employees and independent contractors as directional drillers. Richard writes:

OIL AND GAS COMPANY WINS SUMMARY JUDGMENT IN CLASS ACTION ALLEGING IC MISCLASSIFICATION.  An oil and gas directional drilling company prevailed in a worker misclassification case before a Texas federal district court, which granted its motion for summary judgment, holding that the plaintiff driller is an independent contractor and not an employee. Aim Directional Services LLC provides oil and gas directional drilling, as well as other types of drilling and measurement services to various clients throughout the U.S. and Mexico. To conduct drilling operations, the company engages services from directional drillers like plaintiff, who assist drilling operations by guiding the path of the drill-bit consistent with the plan requested by the client. Plaintiff posted his availability through a third party staffing agency and the company engaged his services as an independent contractor in New Mexico and Texas. Plaintiff later brought suit against the company alleging that he was denied overtime compensation in violation of the FLSA and the New Mexico Minimum Wage Act as a result of his misclassification as an independent contractor.

In granting the company’s motion for summary judgment, the court applied the economic realities test and relied heavily on a prior Fifth Circuit decision, Parrish v. Premier Directional Drilling, which also involved an FLSA overtime dispute against a business in a similar energy service industry. As to the control factor under the test, the court found that although the plaintiff was provided with a well-plan, he made that plan work and the Company did not control how he completed particular calculations. The court found that although the plaintiff was required to turn in reports, the decision in Parrish considered them to be “good-client service” and not meaningful control.  With regard to the argument that the company exercised control by mandating that the plaintiff wear a hardhat and steel-toes boots, the court found that those measures are safety-related and not the type of control indicative of employee status. The court also concluded that the opportunity for profit and loss, the skill and initiative needed for the engagement, and lack of permanency of the relationship also favored IC status.  Hargrave v. Aim Directional Services, No. 18-cv-00449 (S.D. Tex. May 24, 2021).

Source: Direct Selling and Door-to-Door Sales Under Attack: May 2021 IC News Update | Locke Lord LLP – JDSupra

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