Tuesday, August 30, 2011
Houston Chronicle
by L.M. Sixel
Some are winter Texans looking for extra cash to supplement their retirement. For others, it's a job like any other.
Either way, the Department of Labor believes the Gate Guard Services attendants who live in their recreational vehicles while logging traffic at oil and gas drilling sites were improperly classified as independent contractors.
Last year the government told Gate Guard that it owes its 345 attendants $6.2 million in minimum wage and overtime for the 24-hour/seven-day-a-week job. The back wage tally also includes overtime pay for service technicians who empty the septic tanks and provide fuel for the attendants' RVs. Some worked as many as 96 hours a week, according to the Labor Department.
But Gate Guard and its Houston-based owner, Bert Steindorf, reject the government's position.
Anticipating a Labor Department lawsuit, Gate Guard sought legal action through a declaratory judgment in a Victoria federal court, hoping to gain the upper hand on procedural issues such as choosing where the case will be heard.
The government filed its lawsuit in February, three months after Gate Guard filed its case.
Corpus Christi-based Gate Guard provides gate attendants at drilling sites all around Texas, including several locations near Houston and San Antonio.
"Companies believe they have to accept what the government tells them," said Annette Idalski, an employment lawyer with Chamberlain Hrdlicka in Atlanta who is representing Gate Guard. "They don't. They can fight back."
Other experts question that aggressive stance, noting that Gate Guard's preemptive declaratory judgmentlawsuit won't keep the government's wage and hour case from going forward.
Nor will it provide much in the way of procedural advantages, predicted Houston employment lawyer Rex Burch of Bruckner Burch, who is not involved in the case.
The company's strategy was the brainchild of Daniel D. Pipitone, a maritime and commercial litigation lawyer at Chamberlain Hrdlicka in Houston. He figured he could borrow some of the same aggressive litigation techniques he uses when he's wrestling with a commercial case.
"Why can't we be proactive here?" said Pipitone, recounting a conversation he had with Idalski, his colleague in Atlanta. Idalski said she explained that companies typically wait for the Labor Department to take legal action and then respond.
Pipitone said being first to file gives a party the advantage of being the plaintiff, the side that gets the first and last word in jury arguments.
But Burch said that, from his reading of the ruling last month by senior U.S. District Judge John D. Rainey, he expects the court will end up hearing the case in traditional fashion with Gate Guard as the defendant.
Rainey's order combined the two cases into one and moved it to Victoria. That was Gate Guard's choice because many of its gate attendants live there. The Labor Department's preference was federal court in Corpus Christi.
Ed Sullivan, an employment lawyer who represents management clients with Oberti Sullivan in Houston, agrees that the ruling will have little effect. It's a novel strategy, he said, but one that won't likely change the course of the case.
"At the end of the day, the question will be whether they're independent contractors," said Sullivan, who regularly represents clients in wage and hour disputes. And companies typically lose, he added, citing the Labor Department's high rate of success in cases it brings.
A Labor Department spokeswoman said the agency doesn't comment about ongoing cases.
Legal wrangling aside, Pipitone agrees that the heart of the issue is whether the 345 attendants are independent contractors who are responsible for paying all their own taxes and providing their own benefits, or whether they're employees who are subject to federal wage and hour laws such as minimum wage and overtime.
The attendants are on site 24-hours a day and earn $100 to $175 a day. Nothing prevents them from hiring someone else to watch the gate, said Idalski. And nothing stops them from reading, watching television or even drinking beer while they're in their trailers.
The gates are rigged with a bell to summon the attendants, said Idalski, estimating that they only spend a few hours a day actually working.
They're not supervised, she said, and the workers sign contracts agreeing they are independent contractors.
If Gate Guard doesn't convince a jury that its workers are independent contractors, it will argue that they're not really working when they're in their RVs, said Idalski.
The Labor Department has already agreed to subtract eight hours a day per attendant for sleeping and eating, which reduces the company's back wage bill to $2 million, she said.
Generally speaking, people who work from home can take care of their children, cook dinner and do laundry while they wait for assignments and that personal time isn't considered work time, she said.
Similarly, full-time employees who are on-call are free to do what they wish unless they're called in, according to the Labor Department rules.
They make a distinction between workers who are "waiting to be engaged" and those who are "engaged to wait" -- such as firefighters who play checkers while waiting for alarms or factory workers who chat with their co-workers while machinery is repaired.
(c)2011 the Houston Chronicle. Distributed by MCT Information Services.
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