Petition for Writ of Certiorari — Helix Energy Solutions Group, Inc., et al., Petitioners v. Michael J. Hewitt

APPENDIX

TABLE OF APPENDICES

Appendix A

Opinion, United States Court of Appeals

for the Fifth Circuit, Hewitt v. Helix

Energy Sols. Grp., No. 19-20023 (Sept. 9,

2021)............................................................. App-1

Appendix B

Opinion, United States District Court for

the Southern District of Texas, Hewitt v.

Helix Energy Sols. Grp., No. 17-cv-2545

(Dec. 21, 2018) ........................................... App-77

Appendix C

Relevant Statutory Provision and Federal

Regulations ................................................ App-88

29 U.S.C. § 213(a)(1)........................... App-88

29 C.F.R. §541.601 [Version effective

until Jan. 1, 2020] .............................. App-89

29 C.F.R. §541.602 [Version effective

until Jan. 1, 2020] .............................. App-91

29 C.F.R. §541.604 [Version effective

until Jan. 1, 2020] .............................. App-95

App-1

Appendix A

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

________________

No. 19-20023

________________

MICHAEL J. HEWITT,

v.

Plaintiff-Appellant,

HELIX ENERGY SOLUTIONS GROUP, INC.;

HELIX WELLS OPS, INC.,

Defendants-Appellees.

________________

Filed: Sept. 9, 2021

________________

Before: OWEN, Chief Judge, and JONES, SMITH,

WIENER, STEWART, DENNIS, ELROD, SOUTHWICK,

HAYNES, GRAVES, HIGGINSON, COSTA, WILLETT,

HO, DUNCAN, ENGELHARDT, OLDHAM, and WILSON,

Circuit Judges.

________________

OPINION

________________

JAMES C. HO, Circuit Judge, joined by SMITH,

STEWART, HAYNES, GRAVES, HIGGINSON, COSTA,

WILLETT, DUNCAN, ENGELHARDT, OLDHAM, and

WILSON, Circuit Judges:

The Fair Labor Standards Act (FLSA) establishes

a standard 40-hour workweek by requiring employers

App-2

to pay “time and a half” for any additional time

worked. See 29 U.S.C. § 207(a).

Congress has repeatedly rejected efforts to

categorically exempt all highly paid employees from

overtime requirements. See, e.g., 84 Cong. Rec. 545859 (1939) (bill to exempt “employees employed at a

guaranteed monthly salary of $200 a month or more”);

H.R. 8624, 76th Cong. (1940) (bill to exempt all

employees receiving a guaranteed monthly salary of

$150 or more); 143 Cong. Rec. E317-04, E318, 1997

WL 79643, at *2 (Feb. 26, 1997) (proposing a bill to

“create an income threshold that automatically

exempts from FLSA scrutiny the highest paid strata

of the workforce”).

Accordingly, both the Secretary of Labor and the

Supreme Court—as well as our court—have observed

that “employees are not to be deprived of the benefits

of the [FLSA] simply because they are well paid.”

Jewell Ridge Coal Corp. v. Local No. 6167, 325 U.S.

161, 167 (1945). See also Parrish v. Premier

Directional Drilling, 917 F.3d 369, 388 (5th Cir. 2019)

(same); 69 Fed. Reg. 22,122-01 (2004) (same).

Instead, Congress has authorized the Secretary to

promulgate regulations exempting “bona fide

executive,

administrative,

[and]

professional”

employees from overtime. 29 U.S.C. § 213(a)(1). Under

that authority, the Secretary has exempted “highly

compensated” (29 C.F.R. § 541.601) as well as more

modestly paid “executive,” “administrative,” and

“professional” employees (id. §§ 541.100, 541.200,

541.300).

To fall within any of these exemptions, however,

three conditions must be met: First, the employee

App-3

must meet certain criteria concerning the

performance of executive, administrative, and

professional duties. Second, the employee must meet

certain minimum income thresholds. Finally, the

employee must be paid on a “salary basis.” And

although the duties criteria and income thresholds

vary from exemption to exemption, the regulations

apply the same salary-basis requirement to all four

exemptions. See id. § 541.100(a)(1) (applying the

salary-basis test to executive employees); id.

§ 541.200(a)(1) (administrative employees); id.

§ 541.300(a)(1)

(professional

employees);

id.

§ 541.601(b)(1) (highly compensated employees).

So earning a certain level of income is necessary,

but insufficient on its own, to avoid the overtime

protections of the FLSA. The employee must also be

paid on a salary basis, as well as perform certain

duties. And unless those tests are met, the employee

is “not exempt . . . no matter how highly paid they

might be.” Id. § 541.601(d) (emphasis added)

(specifying various professions that are subject to

overtime regardless of the amount of income earned). 1

1 The lead dissent opens by emphasizing the “uncomfortable”

fact that Hewitt is highly paid. But then it concedes in footnote 6

that the regulations expressly contemplate the potential for

overtime “no matter how highly paid” the employee. 29 C.F.R.

§ 541.601(d). Moreover, the dissent does not deny that all three

branches of government—Congress, the Labor Department, and

the Supreme Court—agree with that conclusion. Nor should this

consensus surprise anyone—to the contrary, we all agree that an

employee who satisfies the income and duties requirements must

also comply with (and thus potentially fail under) the salarybasis test.

App-4

It is the salary-basis test that is sharply contested

in this case. Helix Energy Solutions Group claims that

Michael Hewitt is exempt from overtime as a highly

compensated executive employee under § 541.601.

The parties agree that Hewitt meets both the duties

requirements and income thresholds of both

exemptions.

The company admits, however, that Hewitt’s pay

is “computed on a daily basis,” rather than on a

weekly, monthly, or annual basis.

As a matter of common parlance, we typically

associate the concept of “salary” with the stability and

security of a regular weekly, monthly, or annual pay

structure. By contrast, we do not ordinarily think of

daily or hourly wage earners—whose pay is subject to

the vicissitudes of business needs and market

conditions—as “salaried” employees.

FLSA regulations reflect this dichotomy—

defining salary as compensation paid “on a weekly, or

less frequent basis,” “without regard to the number of

days or hours worked.” Id. § 541.602(a) & (a)(1).

That is not to say that an hourly or daily rate can

never meet the salary-basis test. But the Secretary has

promulgated a special rule that must be satisfied

before an hourly or daily rate will be regarded as a

“salary.”

That regulation is found in 29 C.F.R. § 541.604(b).

And it explicitly states that an employee whose pay is

“computed on a daily basis” must meet certain criteria

to satisfy the salary-basis test:

An exempt employee’s earnings may be

computed on an hourly, a daily or a shift

App-5

basis, without losing the exemption or

violating the salary basis requirement, if the

employment arrangement also includes a

guarantee of at least the minimum weekly

required amount paid on a salary basis

regardless of the number of hours, days or

shifts worked, and a reasonable relationship

exists between the guaranteed amount and

the amount actually earned.

Id. § 541.604(b) (emphases added). So a daily-rate

worker can be exempt from overtime—but only “if” two

conditions are met: the minimum weekly guarantee

condition and the reasonable relationship condition.

Helix does not even purport to meet these

conditions. Instead, Helix asks us to ignore them

altogether.

But respect for text forbids us from ignoring text.

As a matter of plain text, we hold that, when it comes

to daily-rate employees like Hewitt, Helix must

comply with § 541.604(b).

The same textual approach has been taken by

both the Sixth and Eighth Circuits as well as the

Labor Department—regardless of how much the

Likewise,

the

employee

is

compensated. 2

For example, the Sixth Circuit agrees that “[t]he text of

§ 541.602(a) does not tell us what to do when an employee’s

salary is not clearly calculated ‘on a weekly, or less frequent

basis.’” Hughes v. Gulf Interstate Field Servs. Inc., 878 F.3d 183,

189 (6th Cir. 2017). Moreover, it specifically rejects the notion

floated by the lead dissent here—namely, that in cases involving

highly compensated employees, “we should pay no attention to

§ 541.604(b),” but should instead follow Litz v. Saint Consulting

Group, Inc., 772 F.3d 1 (1st Cir. 2014), and Anani v. CVS RX

2

App-6

overwhelming majority of federal district courts to

have addressed the issue have made clear that

§ 541.604(b) applies to daily-rate employees

throughout the energy industry, regardless of the

amount of their pay.

Helix could have easily complied with

§ 541.604(b)—for example, by offering a minimum

weekly guarantee of $4,000 based on Hewitt’s daily

rate of $963. See, e.g., Hewitt v. Helix Energy Sols.

Grp., 983 F.3d 789, 801 (5th Cir. 2020) (Ho, J.,

concurring), vacated on petition for rehearing en banc,

989 F.3d 418 (5th Cir. 2020). It has not done so. Under

the plain text of § 541.604(b), that is all that matters.

We reverse and remand for further proceedings.

I.

Hewitt worked as a tool pusher for Helix for over

two years. In that position, Hewitt managed other

Services, Inc., 730 F.3d 146 (2nd Cir. 2013). Id. As the Sixth

Circuit notes, “what [the dissent here] misunderstands about

[Litz and Anani] is that the situations in which those authorities

ignore § 541.604(b) are situations in which . . . plaintiffs . . . were

undisputedly guaranteed weekly base salaries”—unlike day rate

workers like Hewitt. Id. at 189-90 (emphasis added). Likewise,

the Eighth Circuit agrees that the “general” salary-basis rule set

forth in § 541.602(a) is “subject to numerous interpretive rules”—

including, most prominently, § 541.604(b). Coates v. Dassault

Falcon Jet Corp., 961 F.3d 1039, 1042 (8th Cir. 2020). And the

Labor Department agrees that, absent some special rule, daily

rate workers “would not qualify as highly compensated

employees” because “their day rate does not constitute payment

on a salary basis.” U.S. Dep’t of Labor, Wage & Hour Div.,

Opinion Letter FLSA2020-13, 2020 WL 5367070, *1 (Aug. 31,

2020).

App-7

employees while on a “hitch”—that is, while working

offshore on an oil rig. Each hitch lasted about a month.

Helix concedes that it paid Hewitt based solely on

a daily rate. Helix also concedes that it required

Hewitt to work well over forty hours per week.

The company nevertheless attempts to avoid the

FLSA overtime penalty by characterizing Hewitt as a

highly compensated executive employee. See 29 C.F.R.

§ 541.601.

To prevail, however, Helix must show that it paid

Hewitt on a “salary basis” as defined by the

regulations.

Id.

§§ 541.600(a),

.601(b)(1).

(Alternatively, Helix could have attempted to invoke

the highly compensated employee exemption by

showing that it paid Hewitt on a “fee basis,” see id.

§§ 541.601(b)(1), .605—but it has made no such

argument in this appeal.)

Hewitt contends that Helix did not pay him on a

“salary basis” because the company calculated his pay

using a daily rate without satisfying the requirements

of § 541.604(b). Helix responds that it was not

required to comply with § 541.604(b).

The district court agreed with Helix and granted

the company summary judgment. Hewitt v. Helix

Energy Sols. Grp., 2018 WL 6725267, at *3-*4 (S.D.

Tex.). This appeal followed. We review the district

court’s interpretation of the applicable Labor

Department regulations de novo. See Davis v. Signal

Int’l Texas GP, L.L.C., 728 F.3d 482, 488 (5th Cir.

2013).

App-8

II.

This appeal requires us to do nothing more than

apply the plain text of the regulations. Under 29

C.F.R. § 541.601, a highly compensated employee

must be paid on a “salary basis” in order to avoid

overtime. Under § 541.604(b), an employee whose pay

is “computed on a daily basis” must meet certain

conditions in order to satisfy the salary-basis test. And

Helix admits that Hewitt’s pay is “computed on a daily

basis.” Accordingly, Hewitt is subject to overtime

unless his pay complies with § 541.604(b). If we are

following the plain text of the regulations, that should

be the end of the story.

A.

There are multiple components to the salary-basis

test, as articulated in various Labor Department

regulations. There is the “[g]eneral rule,” 29 C.F.R.

§ 541.602(a)—and then there are various exceptions

and provisos to that general rule. To properly

understand and apply the salary-basis test, we must

examine not only the general rule, but also any

exceptions or provisos that bear upon a particular fact

pattern—such as the daily rate presented in this

appeal. Viewing the regulations as a whole, we

conclude that Helix has failed to demonstrate that

Hewitt is exempt from overtime.

The “[g]eneral rule” begins as follows: “An

employee will be considered to be paid on a ‘salary

basis’ within the meaning of this part if the employee

regularly receives each pay period on a weekly, or less

frequent basis, a predetermined amount constituting

all or part of the employee’s compensation.” Id.

§ 541.602(a) (emphasis added). The rule further

App-9

provides that “an exempt employee must receive the

full salary for any week in which the employee

performs any work without regard to the number of

days or hours worked.” Id. § 541.602(a)(1) (emphasis

added).

Of course, some employers may prefer to pay

certain workers on a daily or hourly rate—rather than

on a “weekly, or less frequent basis,” “without regard

to the number of days or hours worked.” The Secretary

has accommodated this practice by promulgating a

special rule dictating what conditions must be

satisfied before an hourly or daily rate will be regarded

as a “salary”:

An exempt employee’s earnings may be

computed on an hourly, a daily or a shift

basis, without losing the exemption or

violating the salary basis requirement, if the

employment arrangement also includes a

guarantee of at least the minimum weekly

required amount paid on a salary basis

regardless of the number of hours, days or

shifts worked, and a reasonable relationship

exists between the guaranteed amount and

the amount actually earned.

Id. § 541.604(b) (emphasis added).

Under this rule, an employee’s earnings can “be

computed on . . . a daily . . . basis, without losing the

exemption or violating the salary basis requirement”—

but only “if” certain other conditions are met. That is,

an employer can pay a daily rate under § 541.604(b)

and still satisfy the salary-basis test of § 541.602—but

only “if the employment arrangement also includes a

guarantee of at least the minimum weekly required

App-10

amount paid on a salary basis regardless of the

number of hours, days or shifts worked and a

reasonable

relationship

exists

between

the

guaranteed amount and the amount actually earned.”

Id.

This two-prong test protects employees in two

ways. First, the “minimum weekly” guarantee ensures

that a daily-rate employee still receives a guaranteed

amount each week “regardless of the number of hours,

days or shifts worked.” Id. In other words, it sets a

floor for how much the employee can expect to earn,

“regardless” of how many hours, days, or shifts the

employee works. Id. Second, the reasonablerelationship test ensures that the minimum weekly

guarantee is not a charade—it sets a ceiling on how

much the employee can expect to work in exchange for

his normal paycheck, by preventing the employer from

purporting to pay a stable weekly amount without

regard to hours worked, while in reality routinely

overworking the employee far in excess of the time the

weekly guarantee contemplates. And as the Labor

Department has explained, without the reasonablerelationship test, “employees could routinely receive

weekly pay of $1,500 or more and yet be guaranteed

only the minimum required $455 (thus effectively

allowing the employer to dock the employee for partial

day absences).” 69 Fed. Reg. 22,184. But “[s]uch a pay

system would be inconsistent with the salary basis

concept and the salary guarantee would be nothing

more than an illusion.” Id. (emphasis added). See also

Brock v. Claridge Hotel & Casino, 846 F.2d 180, 185

(3rd Cir. 1988) (explaining that an employee is not

paid on a “salary basis” if “the employee’s usual

weekly income” calculated on an hourly basis “far

App-11

exceeds the

provided).

‘salary’

guarantee”

the

employer

Helix does not comply with either prong of

§ 541.604(b). First, it pays Hewitt a daily rate without

offering a minimum weekly required amount paid

“regardless of the number of hours, days or shifts

worked.” 29 C.F.R. § 541.604(b). Helix theorizes that

Hewitt’s daily rate is the minimum weekly guaranteed

amount. But a daily rate, by definition, is paid with

regard to—and not “regardless of”—”the number

of . . . days . . . worked.” Id. Second, Helix does not

comply with the reasonable-relationship test. Helix

pays Hewitt orders of magnitude greater than the

minimum weekly guaranteed amount theorized by

Helix (Hewitt’s daily rate). Tellingly, Helix does not

contend that it satisfies the reasonable-relationship

test.

B.

The plain text of the regulations is decisive of this

appeal. But it is worth noting that this textualist

approach is also shared by the Sixth and Eighth

Circuits and the Secretary of Labor—not to mention

the overwhelming majority of district courts that have

confronted these issues across the energy industry.

For example, in Hughes v. Gulf Interstate Field

Servs. Inc., 878 F.3d 183 (6th Cir. 2017), the plaintiffs

admitted that they satisfied both the duties and

income thresholds for highly compensated employees.

See Hughes v. Gulf Interstate Field Servs., Inc., 2016

WL 4197596, at *3 (S.D. Ohio), modified on

clarification, 2016 WL 10592321 (S.D. Ohio), and rev’d

and remanded on other grounds, 878 F.3d 183 (6th

Cir. 2017) (“Plaintiffs do not contest that the other

App-12

requisites for the highly compensat[ed] [employee]

exemption are satisfied.”). The issue was whether

their pay also “satisfied the salary-basis test contained

within 29 C.F.R. § 541.602(a).” Id.

The Sixth Circuit concluded that “[t]he text of

§ 541.602(a) does not tell us what to do when an

employee’s salary is not clearly calculated ‘on a

weekly, or less frequent basis.’” 878 F.3d at 189.

Moreover, it explicitly rejected the notion (floated by

the employer there, and the dissenters here) that “we

should pay no attention to § 541.604(b)” in cases

involving highly compensated employees. Id.

Likewise, the Eighth Circuit has concluded that

the “general definition” of salary basis as set forth in

§ 541.602(a) is “subject to numerous interpretive

rules,” including § 541.604(b). Coates v. Dassault

Falcon Jet Corp., 961 F.3d 1039, 1042 (8th Cir. 2020)

(quoting § 541.604(b)). See also id. at 1048 (relying on

Hughes and § 541.604(b)).

Our reading finds further support in a Labor

Department opinion issued just last year by the

Administrator of the Wage and Hour Division. That

opinion concluded that, absent some special rule, daily

rate workers “would not qualify as highly

compensated employees” because “their day rate does

not constitute payment on a salary basis.” U.S. Dep’t

of Labor, Wage & Hour Div., Opinion Letter

FLSA2020-13, 2020 WL 5367070, *1 (Aug. 31, 2020).

This “conclusion is further supported by [the

Department] having specified certain instances when

exempt executive, administrative, or professional

employees may be paid a daily rate while not more

generally permitting a day rate to satisfy the salary

App-13

basis test.” Id. at *4 n.27 (noting as an example 29

C.F.R. § 541.709, which exempts certain motionpicture employees from complying with the salarybasis test at all). So the Department “knows how to

include in the exemption certain employees whose pay

is calculated on a daily basis; it has chosen not to do

so broadly.” Id. “The familiar ‘easy-to-say-so-if-that-iswhat-was-meant’ rule of interpretation has full force

here.” Id. (cleaned up) (quoting C.I.R. v. Beck’s Estate,

129 F.2d 243, 244 (2nd Cir. 1942)). And that same logic

of course applies to other daily rate provisions like

§ 541.604(b). We agree with the respected

Administrator.

Finally, federal district courts across the country

have repeatedly warned the energy industry that their

daily-rate workers are subject to § 541.604(b)—

regardless of how well they are compensated.

For example, in McQueen v. Chevron Corp., 2018

WL 1989937 (N.D. Cal.), “Chevron argue[d] that the

Plaintiffs are exempt from overtime entitlement under

the FLSA because the day rate they were paid exceeds

$1,000”—higher than the day rate Helix paid to

Hewitt. Id. at *1. Like Helix here, Chevron argued

that “section 541.604(b) . . . does not apply to highly

compensated individuals, such as Plaintiffs, who

earned over $100,000 per year.” Reply in Support of

Motion for Partial Summary Judgment, McQueen v.

Chevron Corp., 2017 WL 6997700. The district court

rejected the argument, holding that “the day rate

compensation scheme . . . does not satisfy the weekly

salary requirement of the exemption defenses.” 2018

WL 1989937, at *1.

App-14

Likewise, in Wellman v. Grand Isle Shipyard,

2015 WL 2169786 (E.D. La.), an energy company

sought to avoid overtime on the basis of the highly

compensated employee exemption. Id. at *2. The

district court noted that the “employees’ compensation

need not be calculated weekly,” provided that the

compensation arrangement complies with the

requirements of § 541.604(b). Id. The company noted

that the plaintiff “received at least $455 in

compensation during each week he worked as a

Project Manager.” Id. at *3. But as the district court

pointed out in response, “this assertion does not

address the regulations’ requirement that the

employment arrangement must ‘include[] a guarantee

of at least the minimum weekly required amount

paid,’” as required under § 541.604(b). 3

3 See also, e.g., Senegal v. Fairfield Indus., 2018 WL 6079354,

at *7 (S.D. Tex.) (entering summary judgment against oil and gas

surveyor because it “multipl[ied] the days worked by the

employee’s day rate,” thereby paying Plaintiffs “based on the

number of days worked and not on a salary basis”); Snead v. EOG

Res., 2018 WL 1151138, at *2 (W.D. Tex.) (rejecting oil and

natural gas company’s argument that “it [was] permitted to

calculate Plaintiff’s pay on a day rate basis without losing this

exemption pursuant to 29 C.F.R. § 541.604(b)” on the ground that

“that regulation, like Section 602(a), requires ‘a guarantee of at

least the minimum weekly required amount paid on a salary

basis regardless of hours, days or shifts worked’”); Keen v. DXP

Enters., 2016 WL 3253895, at *4 (W.D. Tex.) (rejecting oil

company’s claim that its pay arrangement “satisfied the

‘minimum guarantee plus extra’ test set forth at 29 C.F.R.

§ 541.604” because the record showed supervisors “would get

paid for the days they worked, and that if they only worked one

day during the week, they would only be paid for one day”); Cator

v. DXP Enters., 2016 WL 11580735, at *8 (W.D. Tex.), report and

recommendation adopted, 2017 WL 11016498 (W.D. Tex.)

App-15

In short, our decision today is hardly novel—and

can hardly come as a surprise to the oil and gas

industry.

C.

1. Helix’s main response is that it is not required

to comply with § 541.604(b), because Hewitt is a

“highly compensated employee” under § 541.601. In

Helix’s view, if an employee satisfies § 541.601, then

there is no need to “also” satisfy § 541.604(b). But

§ 541.601 expressly imposes a salary-basis test. The

text of § 541.601 makes clear that an employee’s

“‘[t]otal annual compensation’ must include at least

(highlighting “material fact issues,” including whether “plaintiff’s

pay, that was computed at a daily rate and actually received on

a weekly basis, m[et] the salary basis test,” and whether “the

amount expected to be earned and actually earned by plaintiff

during a normal scheduled work week b[ore] a reasonable

relationship to the amount guaranteed, if any”). See also Hiser v.

NZone Guidance, LLC, 2019 WL 2098110, at *4 (W.D. Tex.) (oildrill company admitting that Plaintiffs “were not paid on a salary

basis, and did not receive any guaranteed weekly compensation .

. . irresepective of days worked” because they “were paid a dayrate”).

Indeed, we are aware of just two district courts that have ever

said that day-rate employees in the energy sector are not subject

to § 541.604(b)—and neither offered any analysis other than

citing our withdrawn opinion in Faludi and/or the dissent in

Hewitt II. See Scott v. Antero Res. Corp., 2021 WL 2012326, at *6*8 (D. Colo.); Sanchez v. Schlumberger Tech. Corp., 2020 WL

1445639, at *4 (S.D. Tex.). Neither of the district courts in Faludi

or Hewitt addressed, one way or another, whether daily-rate

workers must comply with § 541.604(b). See Faludi v. U.S. Shale

Sols. LLC, 2017 WL 5969261, at *8 (S.D. Tex.) (citing

§ 541.604(b) only for the proposition that “[a]n employee’s

compensation need not be calculated weekly”); Hewitt, 2018 WL

6725267, at *3 (analyzing only § 541.602).

App-16

$684 per week paid on a salary . . . basis.” 29 C.F.R.

§ 541.601(b)(1) (emphases added). 4 So Hewitt cannot

be a “highly compensated employee” under § 541.601

unless his total annual compensation satisfies the

salary-basis test. And the only way for an employee to

have his pay “computed on a daily basis” “without

violating the salary basis requirement” is to comply

with § 541.604(b). Id. § 541.604(b).

Alternatively, Helix theorizes that it does not

have to comply with § 541.604(b) because it complies

with § 541.602. But even accepting Helix’s premise

about § 541.602, it should go without saying that an

employer must comply with all relevant regulations.

Helix admits that Hewitt’s pay is “computed on a daily

basis,” so it must comply with § 541.604(b). Indeed,

§ 541.604(b) makes this explicit: It says that an

otherwise “exempt” employee who is paid a daily rate

“los[es] the exemption” and “violat[es] the salary basis

requirement” unless the employer complies with

§ 541.604(b).

Notably, nothing in the text of either § 541.602 or

§ 541.604(b) indicates that those provisions apply

differently based on how much the employee is paid.

To the contrary, the same “salary basis” language that

appears in the highly compensated employee

regulation also appears in the regulations governing

more modestly paid executive, administrative, and

professional

employees.

Like

their

“highly

compensated” counterparts, these employees are

exempt only if they are “[c]ompensated on a salary

4 The previous version of § 541.601 (which governs this case)

requires compensation of “at least $455 per week.” Id.

§ 541.601(b)(1) (2014).

App-17

basis.” See id. § 541.100(a)(1) (executive employees);

id. § 541.200(a)(1) (administrative employees); id.

§ 541.300(a)(1) (professional employees). There is no

principled basis for applying or ignoring § 541.604(b)

based on how much the employee is paid.

2. Helix also contends that our understanding of

the salary-basis test conflicts with Litz v. Saint

Consulting Group, Inc., 772 F.3d 1 (1st Cir. 2014), and

Anani v. CVS RX Services, Inc., 730 F.3d 146 (2nd Cir.

2013). To be sure, there is stray language in Anani

that appears to be in tension with the approach we

take today. See Anani, 730 F.3d at 149 (“We perceive

no cogent reason why the requirements of C.F.R.

§ 541.604 must be met by an employee meeting the

requirements of C.F.R. § 541.601.”); see also Litz, 772

F.3d at 5 (quoting Anani but noting that “[p]laintiffs

‘do not take a position on this issue’”).

But there is no actual conflict here. That is for one

simple reason that should be apparent from the face

of the regulations: Litz and Anani involve pay

calculated “on a weekly, or less frequent basis” (29

C.F.R. § 541.602(a))—and not pay “computed on . . . a

daily . . . basis” (§ 541.604(b)). See Litz, 772 F.3d at 2

(employees were “guaranteed a minimum weekly

salary of $1,000 whether they bill[ed] any hours or

not”) (emphasis added); Anani, 730 F.3d at 148

(employee’s “base weekly salary was guaranteed, i.e.

to be paid regardless of the number of

hours . . . actually worked”) (emphasis added).

Indeed, the Sixth Circuit has already

distinguished Litz and Anani on precisely this textual

ground. As that court explained, “Anani and Litz

involved

plaintiffs

who . . . were

undisputedly

App-18

guaranteed weekly base salaries above the qualifying

level.” Hughes, 878 F.3d at 189-90 (emphasis added).

See also id. (rejecting the argument that the court

“should pay no attention to § 541.604(b),” and

explaining that Litz and Anani involved workers

“whose pay was undisputedly calculated ‘on a weekly,

or less frequent basis’”) (citing 29 C.F.R. § 541.602(a)).

We agree. There are both textual and precedentbased grounds for distinguishing this case from Litz

and Anani. By contrast, there are no textual or

precedent-based grounds for distinguishing this case

from the opinions of the Sixth and Eighth Circuits and

the Labor Department.

3. Finally, Helix contends that extending

overtime to highly-paid employees like Hewitt defies

the purpose of the FLSA. In its en banc briefing, Helix

protests that Hewitt’s compensation at “well over

$200,000 each year” is “a far cry from the wage

practices against which the FLSA was created to

protect”—and that “[a] highly compensated employee

like Hewitt is not the worker the FLSA was enacted to

protect.”

But it should go without saying that we are

governed by the text of the FLSA and its

implementing regulations, not some unenumerated

purpose. See Encino Motorcars, LLC v. Navarro, 138

S. Ct. 1134, 1142 (2018). And Congress has never

amended the text of the FLSA to categorically exempt

highly paid employees from overtime—to the contrary,

as previously noted, it has repeatedly rejected efforts

to do so.

Accordingly, the Supreme Court, our court, and

the Secretary of Labor have all acknowledged that

App-19

“employees are not to be deprived of the benefits of the

[FLSA] simply because they are well paid.” Jewell

Ridge Coal Corp, 325 U.S. at 167. See also Barrentine

v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728, 741

n.18 (1981) (same); Parrish, 917 F.3d at 388 (same);

69 Fed. Reg. 22,122-01 (same). In Parrish, for

example, we held that “the FLSA . . . was intended to

cover well-paid, well-trained workers like plaintiffs,”

and thus “rejected[] [the] assertion ‘that [p]laintiffs

are not the sort of low-wage employees the FLSA is

designed to protect.’” 917 F.3d at 388. In fact, we

granted overtime status to workers paid more than

Hewitt—pay that “could well exceed $1,000 per day,”

id. at 384, totaling over “$300,000 per year,” 280 F.

Supp. 3d 954, 962 (W.D. Tex. 2017).

Indeed, if the Secretary had wanted to exempt

employees based solely on the fact that they are well

compensated, the regulations could have been written

accordingly. In fact, as the Labor Department has

publicly noted, “a number of commenters” have

“urge[d] the Department to abandon the salary basis

test entirely, arguing that [the] requirement serves as

a barrier to the appropriate classification of exempt

employees.” 69 Fed. Reg. 22,176. But the Secretary

has so far rejected those requests, and instead

required both that the employee be paid at least a

certain amount of compensation and that the

compensation be paid “on a salary basis.” See id.

(“[T]he Department has decided that [the salary basis

test] should be retained.”). See also 3 Employ.

Coordinator Comp. § 3:26 (“Note that a highly

compensated employee must still meet the

requirements of the salary basis test, being paid at

least $684 on a salary basis, to be exempt from the

App-20

overtime requirements. Thus, an employee earning

over $100,000 will not necessarily be a highly

compensated employee if the employee’s compensation

is paid on an hourly basis.”). 5

***

Our job is to follow the text—not to bend the text

to avoid perceived negative consequences for the

business community. That is not because industry

concerns are unimportant. It is because those concerns

belong in the political branches, not the courts. “We

will not alter the text in order to satisfy the policy

preferences” of any person or industry. Barnhart v.

Sigmon Coal Co., 534 U.S. 438, 462 (2002). “These are

battles that should be fought among the political

branches and the industry.” Id.

We reverse the grant of summary judgment to

Helix and remand for further proceedings consistent

with this opinion.

5 The amici put forth additional atextual theories that even

Helix does not embrace. We likewise decline to entertain them.

App-21

James C. Ho, Circuit Judge, concurring:

The court today holds that Michael Hewitt is not

exempt from overtime under the Fair Labor Standards

Act (FLSA) unless his employer, Helix Energy

Solutions Group, compensates him in accordance with

29 C.F.R. § 541.604(b). As the court explains, its

textualist reading of § 541.604(b) is also supported by

recent opinions of the Sixth and Eighth Circuits as

well as the Labor Department.

As the court also notes, subsequent to our initial

panel opinion in this case, an armada of amici “put

forth additional atextual theories that even Helix does

not embrace.” Ante, at 17 n.5. I concur and write

separately to address amici’s contentions, as well as

various additional arguments by the dissenters that

Helix and amici do not make, and explain why they

are all at war with the text.

I.

To begin with, the amicus brief filed by the States

of Mississippi, Alabama, Louisiana, Montana, and

Utah boils down to the following argument: We should

read the regulations not to impose a salary-basis test,

because the FLSA does not impose such a test. In sum,

the five states ask us to construe the regulatory text

to avoid a conflict with the statutory text. The lead

dissent makes the same point—it emphasizes that the

FLSA “exempts employees based on duties not

dollars.” Post, at 46.

But if it sounds like the five states are actually

inviting us to ignore text, it’s because they are. After

all, the five states fully admit that the regulations

expressly impose a salary-basis test.

App-22

So how exactly do they propose that we construe

the regulations to avoid a salary-basis test, when the

regulations explicitly apply a salary-basis test? See,

e.g., 29 C.F.R. § 541.100(a)(1) (requiring that

executive employees be “[c]ompensated on a salary

basis”); id. § 541.600(a) (“To qualify as an exempt

executive[] . . . employee . . . an employee must be

compensated on a salary basis.”); id. § 541.601(b)(1)

(requiring that a highly compensated employee’s total

compensation include “at least $684 per week paid on

a salary . . . basis”).

Our duty is to interpret the text—not to ignore it.

Recall National Federation of Independent Business v.

Sebelius, 567 U.S. 519 (2012). There the Supreme

Court construed the Affordable Care Act to avoid

invalidity—just as the five states invite us to do here.

But it’s one thing to construe a mandate as a “tax.”

Id. at 574. It’s quite another thing to construe a

mandate as nothing at all. Yet that is precisely what

the five states ask us to do here—to construe the

salary-basis mandate as nothing at all. That is not

interpreting the text—that is invalidating it.

As the lead dissent admits, “whether the salary

basis [test] is invalid is not the question before this

court.” Post, at 50. The question presented by the five

states is not whether we can hold the regulation

invalid, but whether we can construe the regulation to

avoid conflict with statutory text. And the five states

fully acknowledge that, in construing regulatory text

to avoid statutory conflict, we must construe the text

“fairly.”

These admissions should be fatal to this

argument. Because § 541.601 imposes a “salary basis”

App-23

requirement—while § 541.604(b) applies when an

employee’s pay is “computed on a daily basis.” You

cannot “fairly” construe these regulations by simply

reading those words out of the text.

Tellingly, Helix’s supplemental en banc brief, filed

two weeks after the states’ amicus brief, fails to devote

a single word to this theory. Nor was the amicus joined

by the State of Texas—the oil and gas capital of the

world (and Helix’s home state).

II.

For their part, the Independent Petroleum

Association of America and the Texas Oil and Gas

Association theorize that the court’s reading of the

plain text must be rejected because it is

mathematically “illogical.”

Their argument goes something like this: To be

exempt under § 541.601 as Helix claims, an employee

must meet certain income thresholds—namely, a

weekly minimum salary of $455 per week, or $23,660

annualized, and minimum total annual pay of

$100,000. If you divide the latter figure ($100,000) by

the former ($23,660), you get “a correlation between

the guarantee amount and the amount actually

earned of 422.7 percent,” as the Texas Oil and Gas

Association observes. That’s “an over four-to-one

ratio,” the Independent Petroleum Association of

America emphasizes. The lead dissent makes the

same point, albeit with one additional calculation: It

subtracts the weekly minimum salary from the

minimum total annual compensation and notes that

the balance is “three times the base salary.” Post, at

42. But the underlying mathematics remain the same.

App-24

Next, you take that ratio and compare it to the

reasonable-relationship test under § 541.604(b). As

amici point out, the reasonable-relationship test

contemplates smaller ratios—no more than “a weekly

ratio of 150 percent of the guarantee,” according to the

Texas Oil and Gas Association. The Independent

Petroleum Association of America similarly concludes

that “the § 541.604(b) reasonable relationship is

satisfied if the additional amounts do not exceed

approximately 50% of the guaranteed amount.”

Amici have been pressing this mathematical

argument since the en banc petition stage. Yet the

argument appears nowhere in Helix’s briefs.

And for good reason. I’ve heard of using

dictionaries to discern the plain meaning of legal texts.

I’ve never heard of using a calculator. Tellingly, amici

do not cite a single case doing so.

Moreover, this is not the case to start. Because

amici’s mathematical calculations prove exactly

nothing. When all is said and done, amici’s point

amounts to this: An employee’s compensation can

satisfy the income level requirements of § 541.601—

yet violate the salary-basis test requirements of

§ 541.604(b).

Okay, but so what? I thought everyone agreed

that the regulations impose a three-prong test: (1) the

performance of certain duties, (2) income over a

certain level, and (3) the salary-basis test. These are

obviously separate and distinct requirements—the

text makes this clear, and the parties do not dispute

it. So an employer cannot prevail unless it meets all

three requirements. And it is of course possible to

satisfy one prong but not another. If that is all that

App-25

amici is setting out to prove, then mission

accomplished—but how this leads to judgment for

Helix is a mystery.

Bottom line: If our goal is to follow the text, we

should follow the text—not penumbras formed by

emanations divined by a calculator. Cf. Griswold v.

Connecticut, 381 U.S. 479, 484 (1965).

III.

In addition, the dissenters offer three textual

arguments that neither Helix nor any amici embrace.

First, the lead dissent “reiterate[s] that the text of

§ 541.601 makes no mention of § 541.604.” Post, at 38.

But neither do the regulations governing executive,

administrative, and professional employees. See 29

C.F.R. §§ 541.100, .200, .300. So the dissent would

render

§ 541.604(b)

surplusage.

Moreover,

§ 541.604(b) refers explicitly to the “salary basis”

test—so the dissent is wrong to say there is no crossreference here. See id. § 541.604(b). What’s more, over

a century of case law confirms that courts routinely

construe one provision to apply to another, regardless

of the absence of a cross-reference. See, e.g., Lockhart

v. United States, 546 U.S. 142, 148 (2005) (Scalia, J.,

concurring)

(collecting

cases

holding

that

“Congress . . . may [enact] exempt[ions] . . . by ‘fair

implication’—that is, without an express statement”)

(emphasis added). The dissent does not cite any

authority for declining to apply one provision to

another based on the absence of a cross-reference. Not

surprisingly, then, the Sixth and Eighth Circuits have

rejected the dissent’s reading—as do we. See Hughes

v. Gulf Interstate Field Servs. Inc., 878 F.3d 183, 189

(6th Cir. 2017) (rejecting suggestion that “we should

App-26

pay no attention to § 541.604(b)”); Coates v. Dassault

Falcon Jet Corp., 961 F.3d 1039, 1042 (8th Cir. 2020)

(agreeing that the “general” salary-basis rule is

“subject to numerous interpretive rules” including

§ 541.604(b)). 1

Second, the lead dissent relies on the following

two sentences from 29 C.F.R. § 541.0, which

summarizes various FLSA regulations: “Subpart G

contains regulations regarding salary requirements

applicable to most of the exemptions, including salary

levels and the salary basis test. Subpart G also

contains a provision for exempting certain highly

compensated employees.” The dissent claims this

passage somehow must mean that the latter provision

is exempt from the former—that highly paid workers

covered by § 541.601 are exempt from § 541.604(b).

But there’s a difference between merely summarizing

two provisions and specifying how the two provisions

interact with one another. Suppose we sum up our

constitutional amendments as follows: “The

amendments contain various individual rights,

including freedom of speech. The amendments also

contain a provision authorizing states to regulate

alcohol.” Would that mean that the 21st Amendment

1 The dissent by Judge Wiener suggests Hughes and Coates do

not apply here because the workers there did not perform the

duties of highly compensated employees—that is, they were not

“bosses” or “supervisors.” Post, at 56-57. The dissenters’ reading

of case law is as curious as their interpretation of text. Here’s

what Hughes said: “The duties and salary-level tests are not in

question here; the ‘sole issue’ is ‘whether Hughes and McDonald

met the ‘salary basis’ test.’” 878 F.3d at 188. Similarly, Coates

noted that the “salary basis” requirement was the only “issue on

this appeal.” 961 F.3d at 1042.

App-27

is exempt from the 1st Amendment? Of course not.

See, e.g., 44 Liquormart, Inc. v. Rhode Island, 517 U.S.

484 (1996). Moreover, this case is even clearer. The

21st Amendment does not mention freedom of speech.

By contrast, § 541.601 expressly incorporates the

salary-basis test. In sum, nothing in § 541.0 justifies

negating the clear text of § 541.604(b).

Finally, the separate dissent by Judge Wiener

claims that the majority’s textualist approach must

“crumble” because, he worries, a “minimum [weekly]

guarantee” under § 541.604(b) (1) “could be subject to

reduction” (in other words, not “minimum”), (2) “could

be disbursed daily rather than ‘weekly’” (in other

words, not “weekly”), and (3) “could not be

predetermined” (in other words, not “guaranteed”).

Post, at 60. But those worries will be realized only if

you ignore the words “minimum,” “weekly,” and

“guarantee.” Not surprisingly, then, neither Helix nor

any of the amici make this argument, either.

IV.

The implicit message of the industry amici (and

the dissenters) is that it is absurd to grant FLSA

overtime to employees as highly compensated as

Hewitt. But there are several problems with this

absurdity argument. 2

2 For example, in his separate dissent, Judge Wiener says he

“cannot fathom how a majority of the active judges of this court

can vote to require Helix to pay overtime to Hewitt.” Post, at 52.

But earlier in this case, he was able not only to fathom, but to

vote for, that very result. See Hewitt v. Helix Energy Sols. Grp., 956

F.3d 341, 342, 344 n.4 (5th Cir. 2020) (opinion of Ho, J., joined by

Wiener and Higginson, JJ.) (Hewitt was “entitled to overtime”

because “Helix did not pay Hewitt on a salary basis, as

App-28

To begin with, the Supreme Court, our court, and

the Secretary of Labor have all observed that

“employees are not to be deprived of the benefits of the

[FLSA] simply because they are well paid.” Jewell

Ridge Coal Corp, 325 U.S. at 167. See also Barrentine

v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728, 741

n.18 (1981) (same); Parrish v. Premier Directional

Drilling, 917 F.3d 369, 388 (5th Cir. 2019) (same); 69

Fed. Reg. 22,122-01 (2004) (same). In Parrish, for

example, we granted overtime status to workers paid

more than Hewitt—pay that “could well exceed $1,000

per day,” 917 F.3d at 384, totaling over “$300,000 per

year,” 280 F. Supp. 3d 954, 962 (W.D. Tex. 2017).

Congress has likewise rejected efforts to impose

income limits on FLSA overtime protections. See ante,

at 2 (citing examples).

So amici are inviting us to declare all three

branches of government absurd. The court rightly

declines the invitation.

Moreover, the notion that highly compensated

employees should never be entitled to overtime

conflicts with the position of every member of this

court. We all agree—and Helix concedes—that FLSA

regulations impose a three-prong test for exempting

highly compensated employees. Under that threeprong test, it is not enough that an employee is highly

compensated. The employee must also perform certain

duties, as well as satisfy the salary-basis test. A high

income alone is never enough to exempt an employee

§ 541.604(b) expressly requires”). The only thing that has

changed since then (besides the appearance of what the dissent

fondly calls the “oyl biddness” amici, post, at 62) is the additional

authority from the Eighth Circuit and the Labor Department.

App-29

from overtime. See, e.g., 29 C.F.R. § 541.601(d) (“This

section applies only to employees whose primary duty

includes performing office or non-manual work. Thus,

[certain workers] are not exempt under this section no

matter how highly paid they might be.”) (emphasis

added).

Furthermore, what is so absurd about requiring

Helix to follow the regulations? Helix can easily satisfy

the salary-basis test and thereby avoid overtime—as

I’ve previously explained, and Helix has never

disputed. See, e.g., Hewitt v. Helix Energy Sols. Grp.,

983 F.3d 789, 801 (5th Cir. 2020) (Ho, J., concurring),

vacated on petition for rehearing en banc, 989 F.3d 418

(5th Cir. 2020). Just provide Hewitt a minimum

weekly guarantee of, say, $4,000. That’s the economic

equivalent of Hewitt’s daily rate of $963. Id. Such an

arrangement would benefit both parties. Helix would

avoid paying Hewitt overtime. And Hewitt would

enjoy a stable, predictable weekly income.

Finally, amici’s suggestion

misunderstands the FLSA itself.

of

absurdity

Many people conceptualize overtime as an

incentive for workers to seek additional hours in order

to earn higher income. Viewed through that lens—as

an encouragement to work overtime—it may be

tempting to think of overtime primarily as a benefit

for workers at the bottom of the income scale.

But that is not the only way—and perhaps not

even the best way—to understand the FLSA.

Historically, “time and a half” has been understood as

a “penalty” designed to “discourage” overtime. See,

e.g., Missel v. Overnight Motor Transp. Co., 126 F.2d

98, 104-5 (4th Cir. 1942), aff’d, 316 U.S. 572 (1942)

App-30

(collecting cases describing overtime as a “penalty”

designed to “discourage overtime”). Congress

theorized that “the overtime rate . . . will be

sufficiently expensive . . . that employers rather than

pay overtime will spread employment.” Id. at 104.

Congress enacted the FLSA in the depths of the

Great Depression. Unsurprisingly, then, Congress

sought to discourage overtime in order to encourage

employers to hire more workers. As the Supreme

Court explained at the time, “one of the fundamental

purposes of the Act was to induce worksharing and

relieve unemployment by reducing hours of work.”

Missel, 316 U.S. at 577 (quotations omitted). The 50

percent overtime penalty incentivizes employers to

hire two workers to work 40 hours, rather than one

worker to work 80 hours. See, e.g., Mechmet v. Four

Seasons Hotels, Ltd., 825 F.2d 1173, 1176 (7th Cir.

1987) (Congress enacted the FLSA “to spread work

and thereby reduce unemployment, by requiring an

employer to pay a penalty for using fewer workers to

do the same amount of work as would be necessary if

each worker worked a shorter week”).

So the goal of the Act was not to induce overtime,

but to avoid it. The FLSA achieves its ends when no

employer pays overtime—when employers meet their

labor needs by hiring more workers, not by requiring

more hours.

To be sure, the FLSA burdens the business

community and the freedom of contract. But the goal

of the Act is not to benefit employers, but to increase

employment.

And the social benefits of full employment should

be obvious. Communities are better off when people

App-31

are employed rather than idle. Millions of Americans

prefer more free time over more money. And that is so

regardless of how much one is paid. The desire to rest,

recreate, and spend time with loved ones is not

confined to any particular income strata.

V.

Amici do not hide their displeasure with the

court’s reading of the governing regulations. The

Texas Oil and Gas Association groans that “the

Panel’s

Decision

Threatens

the

Country’s

Hydrocarbon Industry”—while the Independent

Petroleum Association of America and the Offshore

Operators Committee blare that “THE PANEL’S

ERRANT HOLDING NEGATIVELY IMPACTS A

VITAL INDUSTRY.” The dissent by Judge Wiener

likewise condemns the majority—whose views he once

endorsed, see ante, at 23 n.2—of causing a “vital

industry” that “provides more than 400,000 direct

jobs” to “suffer needlessly and excessively.” Post, at 62.

As judges, however, we follow the law without

regard to popularity. See, e.g., Gee v. Planned

Parenthood of Gulf Coast, Inc., 139 S. Ct. 408, 410

(2018) (Thomas, J., dissenting from the denial of

certiorari) (“We are not ‘to consult popularity,’ but

instead to rely on ‘nothing . . . but the Constitution

and the laws.’”) (quoting Federalist No. 78, pp. 469470 (C. Rossiter ed. 1961) (A. Hamilton)). We ignore

the booing of the crowd. Cf. Wilson v. Houston

Community College System, 966 F.3d 341, 345 & n.1

(5th Cir. 2020) (Ho, J., dissenting from denial of

rehearing en banc).

In this case, the unhappy crowd happens to be the

oil and gas industry. But it does not matter which

App-32

crowd is booing. We apply the law as written—not as

the industry would have written it. Cf. Ramirez v.

Guadarrama, 2 F.4th 506, 511 (5th Cir. 2021) (Ho, J.,

concurring in denial of rehearing en banc) (“As judges,

we apply our written Constitution, not a woke

Constitution.”).

As demonstrated above, amici’s arguments are at

war with the text. So we cannot credit them, no matter

how important (or upset) the industry may be. If the

court’s ruling today is bad for the industry

(notwithstanding how easy it would be for Helix to

comply with the salary-basis test), that is a policy

consideration for the political branches—not the

courts.

Justice Scalia once wrote: “[S]uch questions as

‘Who wins?’ ‘Will this decision help future plaintiffs?’

‘Will it help future defendants?’ ‘Is this decision good

for

the

‘little

guy’?’

‘Is

it

good

for

business?’ . . . Questions like these are appropriately

asked by those who write the laws, but not by those

who apply them.” Antonin Scalia & Bryan A. Garner,

Reading Law: The Interpretation of Legal Texts 35253 (2012) (emphasis added).

This principle is applied not only by judges, but by

Executive Branch officials as well. Shortly after he

took office—and before his Labor Department issued

an opinion agreeing with our reading of its regulations

(ante, at 5 & n.2, 10-11)—Secretary Eugene Scalia

delivered an address in which he set forth the

“principles that will guide me as Labor Secretary.”

Eugene Scalia, Address at the Federalist Society’s 2019

National Lawyers Convention (Nov. 15, 2019). His

address noted his personal policy preference for free

App-33

markets over legislative ordering, opining that

excessive regulation “stifle[s] American innovation

and productivity” and “burden[s] the economy.” Id.

But he emphasized that his duty as a “principal

officer” under the Constitution is not to construe laws

to favor business, but to help the President fulfill his

duty under Article II “to take care that the laws be

faithfully executed.” Id. “[A]s Secretary of Labor I

have a constitutional responsibility for the agency’s

enforcement activities under the statutes it

administers.” Id. Months later, the Department issued

its opinion agreeing with our earlier panel decision in

this case and concluding that, absent some special

rule, daily rate workers “would not qualify as highly

compensated employees” because “their day rate does

not constitute payment on a salary basis.” U.S. Dep’t

of Labor, Wage & Hour Div., Opinion Letter

FLSA2020-13, 2020 WL 5367070, *1 (Aug. 31, 2020).

***

Amici may be disappointed, but they should not

be surprised that the court today rejects their

atextualist theories.

There’s no such thing as a part-time textualist. If

we’re not textualists in every case, then we’re not

really textualists at all. See, e.g., Cole v. Carson, 935

F.3d 444, 479 (5th Cir. 2019) (Ho & Oldham, JJ.,

dissenting) (“Originalism for me, but not for thee, is

not originalism at all.”). We’re not binding ourselves to

the text if we follow it only when we like the result.

Textualism is either a matter of principle or a talking

point.

App-34

We follow the text where it leads. Here, the text

leads the court to side with labor over industry. So be

it. I concur.

App-35

Edith H. Jones, Circuit Judge, joined by Owen, Chief

Judge, and Wiener, Elrod, and Southwick, Circuit

Judges, dissenting:

Appellant Hewitt is an experienced toolpusher 1

who was paid over $200,000 annually for supervising

twelve to fourteen offshore oil and gas workers,

comprising the drill crew, deck crew and subsea

department of Helix’s offshore operations. 2 Fewer

than six percent of all Americans are paid as much as

Hewitt. 3 Downplaying or omitting these and related

1 Toolpusher, Schlumberger: Oilfield Glossary, https://glossary.

oilfield.slb.com/en/terms/t/toolpusher (last accessed June 29,

2021) (“The location supervisor for the drilling contractor. The

toolpusher is usually a senior, experienced individual who has

worked his way up through the ranks of the drilling crew

positions. His job is largely administrative, including ensuring

that the rig has sufficient materials, spare parts and skilled

personnel to continue efficient operations. The toolpusher also

serves as a trusted advisor to many personnel on the rigsite,

including the operator’s representative, the company man.”).

Toolpushers are important players in the rig leadership

structure. See The Key Players of the Deepwater Horizon, Wall St.

J.

(Aug.

26,

2010),

https://www.wsj.com/articles/

SB10001424052748703632304575451761794054340 (identifying

three toolpushers among the “key players” on the Deepwater

Horizon when disaster befell the rig).

2

3 For example, Census Bureau data indicates that individuals

earning $200,000 annually in 2014 were among the top two

percent of Americans reporting individual income. See Andrew

Van Dam, What Percent Are You? Wall St. J. (Mar. 2, 2016),

https://graphics.wsj.com/what-percent/. Hewitt accepted his job

with Helix in 2014 and left in 2017. In 2017, based on data from

the Current Population Survey series, a household earning

$200,000 “was percentile 93.1%.” 2017 Household Income

Percentile Calculator for the United States, DQYDJ,

https://dqydj.com/household-income-percentile-calculator-

App-36

uncomfortable facts, the majority employs their

“textualist” reading of Fair Labor Standards Act

regulations to provide Hewitt time-and-a-half on his

hourly rate if he worked more than forty hours weekly

during his offshore hitches.

The FLSA, however, exempts executive,

administrative, and professional workers from

overtime. 29 U.S.C. § 213(a)(1) (the “EAP” exemption).

And the regulations further presumptively exclude

such workers who are “highly compensated”—at half

of Hewitt’s salary. 29 C.F.R. § 541.601 (the “HCE”

provision). For a statute designed to elevate the

workingman,

the

majority’s

result

seems

counterintuitive, and in fact it is incorrect. The

majority’s result also runs counter to two other

circuits’ analysis. There is a much better textual

interpretation, as we demonstrate below, which offers

the additional nontrivial benefit of remaining faithful

to the statutory text.

I.

BACKGROUND

Hewitt oversaw the drill crew, the deck crew, and

the subsea department; completed personnel

evaluations; ensured compliance with company

policies; led safety meetings; and sometimes covered

for the rig superintendent. 4 Consistent with these

united-states-2017/ (last visited Aug. 17, 2021) (based on data

“for full-year January to December 2016”).

4 See Anne Kinsey, The Salary of a Toolpusher, Houston Chron.

(Oct.

7,

2020),

https://work.chron.com/salary-toolpusher8125.html (“Toolpushers are senior oil drilling employees who are

in charge of entire departments of oil drilling professionals. They

combine their knowledge of the oil industry with leadership skills

App-37

managerial responsibilities, Hewitt was paid, on a

biweekly basis, a day rate of at least $963 for every

day that he worked, regardless of the number of hours

worked in a given day. His salary totaled over

$200,000 per year, more than double the thenrequired amount of $100,000 needed to qualify as a

highly compensated employee under § 541.601. 5

Hewitt concedes he performed the duties of an

FLSA-exempt executive employee and was generously

paid. But like many oil and gas production employees,

Hewitt’s salary was calculated at a day rate. Homing

in on the “salary basis” component of the FLSA’s HCE

regulation, Hewitt seeks additional overtime

compensation and denies that he was an exempt

employee.

The district court rejected Hewitt’s claim, only to

be reversed by a divided panel’s decision that Hewitt

qualifies for overtime compensation. Upon en banc

reconsideration of the appeal, a majority of this court

now erroneously holds that Hewitt was not a highly

compensated employee under the regulations. We

disagree.

II. DISCUSSION

Hewitt is an FLSA-exempt executive employee for

three reasons. First, he satisfies the regulations’ HCE

to ensure that rig personnel have all the equipment and tools

they need for daily operations.”).

5 Since the filing of this case, § 541.601 was revised to increase

the $100,000 total annual compensation threshold to $107,432.

See § 541.601(a)(1). Similarly, the $455 weekly salary

requirement was raised to $684. See id. at (b)(1). This opinion

refers to the pre-increase amounts that were applicable to the

facts raised in this case.

App-38

provision, § 541.601, which applies the statutory

exemption to highly compensated employees. Second,

the HCE provision, taken together with the regulatory

text, structure, and history, plainly does not

incorporate the separate provision, § 541.604, that is

the textual sine qua non of the majority’s analysis.

Third, our construction of the regulations harmonizes

with the statute, while the majority’s reasoning

creates discord.

A. Hewitt Is Exempt Under § 541.601’s HCE

Provision

We begin with the language of § 541.601 that is

pertinent to a holistic interpretation. 6 Employees who

are exempt as “highly compensated” under § 540.601

must receive over $100,000 in “total annual

compensation,” and perform “one or more of the

exempt duties or responsibilities of an executive,

administrative

or

professional

employee,”

§ 541.601(a)(1). (Hewitt concedes he fulfilled these

requirements.)

The next subsection defines “total annual

compensation” to “include at least $455 per week paid

on a salary or fee basis as set forth in §§ 541.602 and

6 The EAP exemption does not apply to highly paid employees

who do not perform executive, administrative, or professional

duties. See § 541.601(d) (explaining that the provision “applies

only to employees whose primary duty includes performing office

or non-manual work,” while it excludes, “no matter how highly

paid,” “non-management production-line workers and nonmanagement employees in maintenance, construction and

similar occupations such as carpenters, electricians, mechanics,

plumbers, iron workers, craftsmen, operating engineers,

longshoremen, construction workers, laborers and other

employees . . . .”).

App-39

541.605,” 7 and the “[t]otal annual compensation may

also include commissions, nondiscretionary bonuses

and other nondiscretionary compensation earned

during a 52-week period.” § 541.601(b)(1).

Section 541.601(b)(2) refines the definition by

adding a catch-up provision. If, at the end of the 52week period, the $100,000 requirement has not been

met, “the employer may, during the last pay period or

within one month after the end of the 52-week period,

make one final payment sufficient to achieve the

required level.” § 541.601(b)(2).

Because the definition of “total annual

compensation” includes a minimum weekly payment

on a salary basis set forth in § 541.602, we turn to that

provision’s general rule:

An employee will be considered to be paid on

a “salary basis” within the meaning of this

part if the employee [1] regularly receives

each pay period on a weekly, or less frequent

basis,

[2]

a

predetermined

amount

constituting all or part of the employee’s

compensation, [3] which amount is not

subject to reduction because of variations in

the quality or quantity of the work performed.

§ 541.602(a)(numbers added). The next subpart

specifies that “an exempt employee must receive the

full salary for any week in which the employee

performs any work without regard to the number of

days or hours worked,” but “need not be paid for any

7 Whether Hewitt may have been paid on a “fee basis” is not at

issue in this case. See § 541.605 (defining “fee basis”).

App-40

workweek in which

§ 541.602(a)(1).

they

perform

no

work.”

Hewitt satisfies the plain terms of the HCE test.

He received his paycheck biweekly, as required by the

first part of the salary basis test. And in any week in

which he performed any work he was guaranteed a

“predetermined amount” of at least $963 (his day

rate), 8 which represented “part of” his compensation

and was more than double § 541.601’s $455 minimum

salary. Finally, Hewitt’s $963 predetermined pay was

8 The idea that a “predetermined amount” can be computed on

an hourly (or daily) basis and still count as a “salary” is hardly

novel. The Department of Labor and courts under previous

versions of the FLSA regulations were clear on this point. See

Opinion Letter No. 395 [1961-1966 Wages-Hours Transfer

Binder] Lab. L. Rep. (CCH) ¶ 30,996.23 (Sept. 22, 1965)

(addressing “highly-paid administrative and professional

employees employed by consulting firms on an irregular, projectby-project basis,” and concluding that “[t]he salary requirement

would be satisfied by a payment in the prescribed amount which

is guaranteed to the employee for each week in which he performs

any work on a project or projects for the employer, even though

this is only a portion of the compensation paid him for such work

and the total amount continues to be measured by an hourly or

daily rate” (emphasis added)); see also Douglas v. Argo-Tech

Corp., 113 F.3d 67, 71 (6th Cir. 1997) (recognizing “[a]n employee

is salaried even if his compensation consists of a guaranteed

predetermined amount plus additional compensation,” and

finding support in the 1965 Opinion Letter for the proposition

that “hourly employees may be salaried if they are guaranteed a

predetermined number of paid hours” (citations omitted)); Nairne

v. Manzo, No. 86-0206, 1986 WL 12934, at *3 (E.D. Pa. Nov. 14,

1986) (Scirica, J.) (unpublished) (considering how many hours an

hourly employee was guaranteed, and citing the 1965 Opinion

letter for the proposition that “the salary requirement is met even

if the employee is paid on an hourly basis, as long as the employee

is guaranteed the minimum weekly requirement”).

App-41

not “subject to reduction because of variations in the

quality or quantity of the work performed.” He was

paid that minimum if he worked a single second of a

day and was paid regardless of the quality of his work.

Thus, “for any week in which [Hewitt] perform[ed] any

work” he was paid at least $963 “without regard to the

number of days or hours worked.”

It follows that the majority should have started—

and ended—with the plain terms of § 541.602 to

determine that Hewitt satisfied the salary basis test.

Indeed, two other circuits have similarly concluded

that once § 541.602’s salary basis test is satisfied, that

ends the analysis under the HCE exemption. Anani v.

CVS RX Servs., Inc., 730 F.3d 146, 149 (2d Cir. 2013)

(“We perceive no cogent reason why the requirements

of [] § 541.604 must be met by an employee meeting

the requirements of [] § 541.601.”); Litz v. Saint

Consulting Grp., Inc., 772 F.3d 1, 5 (1st Cir. 2014)

(agreeing with Anani and noting that the plaintiffs

“sensibly abandoned” the argument that the

reasonable relation provision [§ 541.604] “applies to

highly compensated employees”).

Hewitt and the majority dodge the clear fit

between Hewitt’s total annual compensation and the

exact requirements of § 541.601, as they contend

instead that Hewitt was not compensated on a “salary

basis.” By artful use of italics, ellipses, and other

misdirection, the majority describe § 541.602’s salary

basis test as an incomplete “general” rule to justify

looking outside of § 541.602 to § 541.604 whenever an

employee’s pay is calculated on a daily basis. Ante,

at __. That assessment is plainly wrong. Section

541.602 sets out the “general rule” in subpart (a),

App-42

which is supplemented by seven “exceptions” in its

subpart (b) that together form a comprehensive salary

basis test. Nothing in § 541.602 points to § 541.604.

The majority also edits § 541.604 to stand for the

proposition that “an employee’s earnings can ‘be

computed on . . . a daily . . . basis, without losing the

exemption or violating the salary basis requirement’—

but only ‘if’ certain other conditions are met.” Ante, at

__ (alterations in original). This strips § 541.604 of its

key context. As explained in Part B(2) below, the

regulations are clear that the “employees” covered by

§ 541.604 are those in the executive, administrative,

and professional provisions set forth in §§ 541.100,

.200, and .300. The whole point of § 541.604 is to make

clear that those employees, when not covered by the

HCE exemption, 9 can be paid a minimum guarantee

plus extras without losing their EAP exempt status.

These fundamental textual errors were not

committed by two sister circuits, whose decisions the

majority unconvincingly tries to distinguish. The

majority claims that § 541.604 has no bearing on those

other cases because the employees’ base salaries in

Litz and Anani were “calculated ‘on a weekly, or less

frequent basis,’” and Hewitt’s day rate was not. Ante,

at __ (emphasis added) (quoting § 541.602(a)). This

contrast deceptively misstates the regulation: Section

541.602(a) requires only that the employee

“receive[] . . . on a weekly, or less frequent basis, a

predetermined amount.” (emphasis added). Hewitt

9 As explained in Part B(1)(a) below, the HCE exemption

separately accounts for minimum guarantees plus extras for

employees it covers.

App-43

received his biweekly salary just like the Litz and

Anani employees.

And contrary to the majority’s reasoning, Litz and

Anani do not rest on the computation method for base

salaries. The majority’s argument requires them to

dismiss as “stray language” Anani’s two lengthy

paragraphs, the bulk of the court’s analysis, that

explain why § 541.604 does not apply to employees

exempt under § 541.601. Ante, at __. In further tension

with the majority’s rationale, the employees in both

Anani and Litz were paid for “extra work” on an hourly

basis. See Anani, 730 F.3d at 147; Litz, 772 F.3d at 2.

Given that under § 541.604(b), employee “earnings

may be computed on an hourly, a daily or a shift

basis,” the only reason to think the employees in

Anani and Litz would not fall within § 541.604(b) is

exactly the reason our sister circuits actually gave:

They were exempt under the HCE provision. 10

§ 541.604(b) (emphasis added).

10 The majority claims that the Sixth Circuit in Hughes shares

its “textualist approach” to the regulations. Ante, at __

(discussing Hughes v. Gulf Interstate Field Servs. Inc., 878 F.3d

183 (6th Cir. 2017)). That is triply wrong. First, Hughes expressly

declined to rule on whether § 541.604(b) applied to an exempt

employee under § 541.601, so it did not adopt the majority’s

construction. 878 F.3d at 190 (“[W]e need not decide today

whether [§ 541.604(b)] is the controlling source of evidence

supporting our reading.”). The majority selectively quotes

Hughes’s description of the plaintiffs’ position in that case to

suggest otherwise. See id. at 189 (“Hughes and McDonald,

however, point us to a neighboring provision that might be

helpful.” (emphasis added)). Second, the $337 day rate in Hughes

fell below the $455 minimum required by § 541.601,

distinguishing it from Hewitt’s $965 day rate that far exceeded

the regulatory minimum. Id. at 186. Third, the Hughes court

App-44

B. Section 541.604 Does Not Apply to the HCE

Provision

Since a plain text reading of §§ 541.601 and .602

confirms that Hewitt’s compensation satisfied the

HCE exemption and the salary basis test, the majority

fall back on their real objection, that Hewitt’s

compensation fails to comply with § 541.604. But see

Litz, 772. F.3d at 5 (“[W]e see no reason why

[§ 541.604’s] requirements should be grafted onto the

materially different exemption [§ 541.601] on which

[the employer] relies.” (citing Anani, 730 F.3d at 149).

But the text, structure, and history of the pertinent

regulations belie the majority’s conclusion.

Textualism “is not always easy,” it “can be hard

work and involve significant research,” and it “is not

glamourous,” but done properly it is both

“straightforward” and “fair.” Diarmuid O’Scannlain,

“We Are All Textualists Now”: The Legacy of Justice

Antonin Scalia, 91 St. John’s L. Rev. 303, 312 (2017).

Doing the hard work here refutes the view that

§ 541.601’s exemption for highly compensated

employees must be read in light of § 541.604.

First, the text and structure of § 541.601 indicate

that § 541.604 should not be read into § 541.601. The

text does so in two ways: It expressly incorporates only

§ 541.602, and it provides separate rules for minimum

guarantees plus extras that either overlap or are in

tension with § 541.604. The majority, for instance,

noted how that employee differed from the HCE exempt

employees in Litz and Anani, “situations in which the textual

requirements of 29 C.F.R. §§ 541.601, 541.602(a) are already

clearly met.” Id. at 189 (citing Litz, 772 F.3d at 5; Anani, 730 F.3d

at 149).

App-45

construes § 541.604 as safeguarding employees by

providing a minimum weekly guarantee as the “floor”

on what an employee must earn “regardless” of hours

worked, and a “ceiling” on the work required in

exchange for a paycheck. 11 Ante, at __. But § 541.601

achieves a similar result with a different design: The

minimum HCE total annual compensation ($100,000)

is more than four times the annualized minimum

weekly pay ($23,660). This HCE minimum thwarts

unfair labor exploitation at least as effectively as

§ 541.604’s minimum weekly guarantee and

reasonable relationship tests. The provisions therefore

overlap. Further, as will be seen, the “reasonable

relationship” test found in § 541.604 conflicts with the

“catch-up payment” provision of § 541.601.

Second, the broader regulatory structure

confirms that the HCE provision, § 541.601, stands

apart from the general regulations covering the EAP

exemptions. See § 541.100 (Subpart B, executive

employees); § 541.200 (Subpart C, administrative

employees); § 541.300 (Subpart D, professional

employees). Unlike the HCE provision, each of these

regulations has its own Subpart, and they all use

similar language and follow a nearly identical

structure. In contrast, the HCE provision is located

among Subpart G’s “Salary Requirement” provisions.

11 Section 541.604(b) provides, “An exempt employee’s earnings

may be computed on an hourly, a daily or a shift basis, without

losing the exemption or violating the salary basis requirement, if

the employment arrangement also includes a guarantee of at

least the minimum weekly required amount [$455] paid on a

salary basis regardless of the number of hours, days or shifts

worked, and a reasonable relationship exists between the

guaranteed amount and the amount actually earned.”

App-46

Critically, the Introductory Statement to the EAP

exemption regulations, § 541.0, explicitly states that

Subpart G (titled “Salary Requirement,” which

contains § 541.604) generally applies to these other

Subparts, “including salary levels and the salary basis

test.” But the Introductory Statement separately

states that “Subpart G also contains a provision for

exempting highly compensated employees.” Id. The

HCE exemption, in other words, lies within but does

not relate to all of Subpart G.

Third, the regulatory history confirms that

§ 541.602’s salary basis test (expressly applied in

§ 541.601) is independent from § 541.604. The two

provisions were historically set together in one salary

basis provision, but the minimum guarantee plus

extras portion (now found in § 541.604) was excised

from the salary basis test when the highly

compensated employee exemption was first

promulgated in 2004.

1.

The HCE

Structure

Exemption’s

Text

and

We conclude that § 541.604 does not apply to

employees who are exempt under § 541.601’s

freestanding provision for highly compensated

employees. We reiterate that the text of § 541.601

makes no mention of § 541.604. Moreover, § 541.601

expressly incorporates only part of § 541.602’s salary

basis test but expressly omits § 541.602(a)(3). The

specificity with which § 541.601 was drafted compels

the conclusion that an otherwise unidentified

provision (§ 541.604) was not incorporated. Expressio

unius est exclusion alterius. See Antonin Scalia &

App-47

Bryan Garner, Reading Law 107 (2012) [hereafter

“Reading Law”].

The majority attempts to explain § 541.601’s

silence by observing that the more general EAP

provisions are similarly silent as to whether § 541.604

applies. Ante, at __. This is inaccurate, because as

noted, the general EAP exemption subparts

incorporate Subpart G in its entirety, including the

“Salary Requirement,” precisely because those

subparts cover employees who earn as little as $23,660

annually ($455/week annualized). The HCE

exemption, however, overarches and supersedes the

general EAP coverages for employees who earn at

least $100,000 annually. And because the HCE

exemption already stands within Subpart G, it need

only reference the express provisions of Subpart G

(e.g. portions of § 541.602) that are necessary to

accomplish its purpose.

Reinforcing this structural indicator, § 541.604

deals with compensation involving a minimum

guarantee plus extras. Because the general subparts

governing EAP employees do not separately address

the situation of a minimum guarantee plus extras, and

because those subparts fully incorporate Subpart G,

§ 541.604 must apply to lesser-paid EAP employees.

But inasmuch as § 541.601 implements its own regime

allowing extras to count toward the $100,000 total

annual compensation, there is no need to advert to

§ 541.604. 12 See Anani, 730 F.3d at 149 (recognizing

12

The distinction between the provision for highly

compensated employees in § 541.601 and the general EAP

subparts for executive, administrative employees is readily

apparent textually. The EAP subparts use nearly identical

App-48

that “every employee with a guaranteed weekly

amount exceeding $455 who earns over $100,000, and

is therefore purportedly exempted by [] § 541.601, also

fits the description of having a ‘minimum guarantee

plus extras’”).

Looked at in more detail, § 541.601’s rules for

highly compensated employees either overlap or are in

tension with § 541.604. See Anani, 730 F.3d at 149

language and follow the same structure. See § 541.100 (executive

employees); § 541.200 (administrative employees); § 541.300

(professional employees). Not so for highly compensated

employees, a category that overarches the general provisions to

the extent of its high minimum compensation and different

duties requirements. See § 541.601. In addition, the minimum

salary set forth in the executive, administrative, and professional

provisions is made expressly “pursuant to § 541.600,” which is

entitled “[a]mount of salary required,” and is fixed at $455 weekly

(or, as applicable, on a fee basis). See § 541.100(a)(1);

§ 541.200(a)(1); § 541.300(a)(1). But § 541.601 contains no

mention of § 541.600 and only takes effect with total annual

compensation of $100,000.

The majority erroneously asserts that Hewitt must show he

was paid on a salary basis as defined by § 541.600(a). Ante, at __.

This reading of § 541.600 into § 541.601, however, results in

conflict. Section 541.600 permits “[a]dministrative and

professional employees,” but not executive employees to be paid

on a fee basis. But § 541.601 allows administrative, professional,

and executive employees to be compensated on a fee basis.

Compare § 541.600(a) (requiring executive, administrative or

professional employees to “be compensated on a salary basis,” but

only permitting administrative and professional employees to

alternatively be paid “on a fee basis”) with § 541.601(a)-(b)

(exempting any employee performing “executive, administrative

or professional” responsibilities so long as total annual

compensation includes a minimum portion “paid on a salary or

fee basis as set forth in §§ 541.602 and 541.605” (emphasis

added)).

App-49

(recognizing that § 541.601 and § 541.604 “each deals

with different groups of employees who receive a

‘minimum guarantee plus extras,’” and concluding the

HCE exemption “is rendered essentially meaningless”

if the employee “would lose the ‘highly compensated

employee’ exemption by failing to qualify under []

§ 541.604”); cf. United Sav. Assn. of Tex. v. Timbers of

Inwood Forest Assoc., Ltd., 484 U.S. 365, 371, 108 S.

Ct. 626, 630 (1988) (“Statutory construction [] is a

holistic endeavor”); Reading Law at 180(“The

provisions of a text should be interpreted in a way that

renders them compatible, not contradictory.”).

(a) The Provisions Overlap

Sections 541.601 and 541.604 tread similar

ground. As its title indicates, § 541.604 deals with

situations where there is a “[m]inimum guarantee

plus extras.” Thus, § 541.604(a) allows “additional

compensation” above the minimum weekly-required

amount paid on a salary basis. An employer may

“provide an exempt employee with additional

compensation without losing the exemption or

violating the salary basis requirement.” § 541.604(a).

But § 541.601 independently deals with the minimum

guarantee plus extras scenario. In addition to

incorporating the § 541.602 salary basis test,

§ 541.601(b)(1)

states

that,

“[t]otal

annual

compensation [$100,000 minimum] may also include

commissions, nondiscretionary bonuses and other

nondiscretionary compensation earned during a 52week period.” To this extent, these provisions are

parallel in permitting extras.

But unlike § 541.604, the “other nondiscretionary

compensation” addressed in § 541.601(b)(1) need not

App-50

bear a “reasonable relationship” to the guaranteed

weekly minimum salary. On the contrary,

§ 541.601(b)(2) expressly permits a single lump sum

payment at the end of the year to meet the total

annual compensation requirement. 13

The majority’s explanation that the reasonable

relationship test sets a “ceiling on how much the

employee can expect to work in exchange for his

normal paycheck,” Ante, at __, only emphasizes why

§ 541.604 does not apply to the HCE provision. No

doubt § 541.604 was intended to protect those

employees to whom it applies from being overworked

for their “normal paycheck.” But as already explained,

§ 541.601’s total annual compensation requirement

achieves a similar result with a different structural

design. To put it bluntly, a highly compensated

employee who earns “total annual compensation” of at

least $100,000, supposing the salary basis test to have

been met, can hardly claim to be overworked. That

§ 541.601(a) requires a very high level of

compensation before it even applies protects

significantly against exploitation.

13 The fact that both provisions describe a scenario where the

“extra” comes in the form of sales commissions further supports

the idea that they both address the same minimum guarantee

plus extras. Compare § 541.601(b)(2) (illustrating a base salary

above the minimum but below the required total annual

compensation threshold where sales commissions did not take

the employee’s total compensation over the threshold, and

permitting an end-of-year payment to make up the difference)

with § 541.604(a) (stating that, “for example, an exempt

employee guaranteed at least [$455] each week paid on a salary

basis may also receive additional compensation of a one percent

commission on sales”).

App-51

(b) Sections 541.601 and 541.604 are in

Tension

Further illuminating the incompatibility between

these provisions is that § 541.601’s treatment of a

minimum guarantee plus extras for highly

compensated employees authorizes an unreasonable

relationship between base and total compensation.

Unlike § 541.604, the highly compensated employee

provision approves of large, unequal payments if they

are necessary to meet the high total annual

compensation threshold. These payments can take

any form—hourly, daily, weekly, monthly, or an

employer can even cut a single check at the end of the

year—if the employer provides a § 541.602- compliant

minimum base salary. Nor does § 541.601 concern

itself with how the minimum base salary is computed

as long the employee “regularly receives” each pay

period the required “predetermined amount” under

§ 541.602’s salary basis test. What’s important is that

the total annual compensation threshold is satisfied.

To illustrate this point, an employer may satisfy

the HCE provision by paying a weekly amount of $455

(resulting an annual salary of only $23,660) and make

up the entire remainder at the end of the year to

achieve total annual compensation of $100,000. See

§ 541.601(b)(2). This permissible catch-up payment of

three times the base salary fails § 541.604’s

reasonable relationship test. But this result is

permissible for highly compensated employees for the

same reason that the HCE exemption does not require

“a detailed analysis” of their job duties: “A high level

of compensation is a strong indicator of an employee’s

exempt status.” § 541.601(c).

App-52

Reading § 541.601 and § 541.604 together, as the

majority does, effectively eliminates the HCE

exemption for a day-rate-paid executive unless the

executive also receives a weekly salary in line with the

541.604(b)’s “reasonable relationship” test. The

majority inadvertently proves this point by asserting

that Helix could have “easily complied with

§ 541.604(b)” by offering a weekly salary of $4,000.

Ante, at __. But the highly compensated employee test

requires only $455 be paid on a salary basis pursuant

to § 541.602. Thus, grafting of § 541.604 onto

§ 541.601 rewrites the required base salary and

upends the balance struck by § 541.601 between the

minimum salary and total annual compensation.

Another illustration shows how significantly

§ 541.604 could rewrite the base salary requirement in

§ 541.601. A Department of Labor opinion letter

suggests that the § 541.604 reasonable relationship

test is satisfied if the additional amounts do not exceed

approximately 50% of the guaranteed weekly

minimum. 14 If it were applicable to § 541.601, this

standard would mean an employee whose total annual

compensation equals the $100,000 HCE threshold

must have a guaranteed “base salary” of $66,666.67

per year, or $1,282.04 per week. To repeat, the HCE

exemption, by its own terms, requires a minimum

14 The letter, interpreting § 541.604, not the HCE exemption,

recognizes that a “1.5-to-1 ratio of actual earnings” is not, under

the regulations “the maximum permissible ratio,” but recognizes

the regulation “provide[s] a range of permissible ratios from 1.2to- 1 to 1.5-to-1” and concludes a ratio of 1.8-to-1 “exceed[s] the

permissible ratios found in the regulations.” Dep’t of Labor,

Opinion Letter FLSA2018-25, at *2 (Nov. 8, 2018).

App-53

$455 per week paid on a salary basis. The majority

ignores the text and rewrites the regulations.

2.

Broader Regulatory Structure

The post-2004 regulatory structure of the EAP

exemptions

further

reinforces

§ 541.604’s

inapplicability to § 541.601. 29 C.F.R. Part 541

includes eight subparts (A-H). 15 Subpart A lays out

the regulation in general terms, while Subparts B-F

address specific exemption categories. Executive,

administrative, and professional employees each have

a subpart (found in B-D, respectively). The exemption

for highly compensated employees does not have its

own subpart but is included within Subpart G, titled

“Salary Requirement.”

This location proves important. Subpart A’s

Introductory Statement explains that “Subpart G

contains regulations regarding salary requirements

applicable to most of the exemptions” and refers to

Subparts B-D listed above. Separately, it states that

Subpart G “also contains a provision for exempting

certain highly compensated employees.” § 541.0(b). In

other words, the Introductory Statement recognizes

that Subpart G (which includes § 541.604) generally

applies to each of the exemption categories defined in

the regulations other than the highly compensated

employee provision that is housed within Subpart G

itself. See Anani, 730 F.3d at 150 (recognizing the

significance of the fact that the highly compensated

employee “regulation is found in the ‘Salary

Requirements’ Subpart rather than in the ‘duties

15 Subpart H covers Definitions and Miscellaneous Provisions

and is not relevant for our purposes here.

App-54

requirements’ Subparts, and there is direct evidence

that this placement was not the result of

administrative inadvertence”). In short, the highly

compensated employee provision’s text and structure

indicate the HCE provision is sui generis.

3.

Regulatory History

The regulatory history confirms our conclusion.

The minimum guarantee plus extras provision used to

be part and parcel of the salary basis test. 16 At that

time, the executive, administrative, and professional

sections each explicitly incorporated the salary basis

test along with its minimum guarantee plus extras

subsection. 17 But in 2004, the Department of Labor

first promulgated the provision for highly

compensated employees in § 541.601. The Department

excised the minimum guarantee plus extras

subsection from the salary basis provision and, for the

first time, transformed that subsection into a new

§ 541.604.

The

timing

is

meaningful.

For example, in the 2002 version of the regulations, the

salary basis test can be found in § 541.118. Subpart (a) is the

predecessor to today’s salary basis test now found in § 541.602.

Subpart (b) is entitled “[m]inimum guarantee plus extras” and is

the predecessor to today’s § 541.604.

16

17 The pre-2004 regulations set out the full meaning of salary

basis within the broader section covering executive employees.

§ 541.118 (2002). The professional and administrative sections

then expressly incorporated the definition of salary basis as set

forth in § 541.118. See § 541.212 (2002) (“The explanation of the

salary basis of payment made in connection with the definition of

‘executive’ is also applicable in the definition of

‘administrative.’”); § 541.312 (2002) (“The salary basis of

payment is explained in § 541.118 in connection with the

definition of ‘executive.’”).

App-55

Contemporaneous with the creation of the regulatory

exemption for highly compensated employees came

the decoupling of today’s § 541.604 from the salary

basis test. And of course, § 541.601 is explicit that it

incorporates only part of the § 541.602 salary basis

test, while it fails altogether to mention the thenequally-new § 541.604. Why spin off § 541.604 only to

have courts effectively re-incorporate it back sub

silentio into the new highly compensated employee

exemption?

C. Statutory Construction

The majority’s conclusion is also at odds with the

statute itself, which exempts employees based on

duties not dollars. 18 The FLSA exempts “any employee

employed in a bona fide executive, administrative, or

professional capacity.” 29 U.S.C. § 213(a)(1). The plain

meaning of this exemption focuses on an employee’s

duties, and it should be interpreted fairly. See Encino

Motorcars, L.L.C. v. Navarro, 138 S. Ct. 1134, 1142

(2018) (emphasizing that courts “have no license to

give the exemption[s] anything but a fair reading”);

18 No one seriously disagrees that, based on the language in the

statute itself, Hewitt is precisely the kind of highly paid,

supervisory employee the EAP exemption was meant to exclude

from overtime. See Faludi v. U.S. Shale Sols., L.L.C., 936 F.3d

215, 221 (5th Cir. 2019) (Ho, J., dissenting), withdrawn and

reissued, 950 F.3d 269 (5th Cir. 2020) (concluding under similar

facts that “[i]f we were looking only at statutes enacted by

Congress, I would join my colleagues in affirming the district

court, because it seems obvious that [the employee] was

‘employed in a bona fide . . . professional capacity’ and therefore

exempt from the overtime requirements of the Fair Labor

Standards Act.” (citing 29 U.S.C. § 213(a)(1) and ellipsis in

original)).

App-56

Reading Law at 364 (disputing “[t]he false notion that

remedial statutes should be liberally construed”).

Two words, in particular, support this conclusion:

“capacity” and “bona fide.” The plain meaning of

capacity is “[a]bility; capability; possibility of being or

of doing.” Capacity, Webster’s New International

Dictionary (W. T. Harris & F. Sturges Allen eds.,

1930). And the word “bona fide” emphasizes that the

“executive, administrative, or professional capacity”

must be “[i]n or with good faith; without fraud or

deceit; real or really; actual or actually; genuine or

genuinely; as, he acted bona fide; a bona fide

transaction.” 19

Bona

Fide,

Webster’s

New

International Dictionary (W. T. Harris & F. Sturges

Allen eds., 1930); accord Nevada v. U.S. Dep’t of

Labor, 275 F. Supp. 3d 795, 804-05 (E.D. Tex. 2017)

(relying on comparable dictionary definitions from

1933). Similarly, the phrase “employee employed in a

bona fide . . . capacity” emphasizes a focus on the

employee’s actual duties. 20

19 The meaning of these terms in this context remains more or

less the same in modern usage. See, e.g., Capacity, Oxford

English Dictionary Online (2021) (defining capacity as “[t]he

power, ability, or faculty for anything in particular”); Bona Fide,

Oxford English Dictionary Online (2021) (defining the term to

mean “[i]n good faith, with sincerity; genuinely”).

20 Our cases have made a similar observation regarding the

seaman exemption, which applies to “any employee employed as

a seaman.” 29 U.S.C. § 213(b)(6) (italics added). See, e.g., Dole v.

Petroleum Treaters, Inc., 876 F.2d 518, 523 (5th Cir. 1989)

(recognizing that the “italicized words mean something” and are

not “mere tautology”; instead they “warn us to look to what the

employees do” rather than “rest on a matter of a name, or the

App-57

In the same vein, recent agency rulemaking

recognizes that the EAP exemption itself focuses on an

employee’s duties, as distinguished from the

regulatory application of a salary test. See Defining

and Delimiting the Exemptions for Executive,

Administrative, Professional, Outside Sales and

Computer Employees, 84 Fed. Reg. 51,230, 51,238

(Sept. 27, 2019) (codified at 29 C.F.R. 541) [hereinafter

2019 Final Rule] (recognizing that salary level is

generally “not a substitute for an analysis of an

employee’s duties,” but is, “at most, an indicator of

those duties”). 21 In other words, the exemption is

place of their work” (quoting Walling v. W.D. Haden Co., 153 F.2d

196, 199 (5th Cir. 1946)).

Consistent with that understanding, our cases frequently

characterize the EAP exemption as applying to those “working

in” a bona fide executive, administrative or professional capacity

when describing the statute. See, e.g., Lott v. Howard Wilson

Chrysler- Plymouth, Inc., 203 F.3d 326, 331-33 (5th Cir. 2000)

(recognizing the exemption applies to employees “working in a

bona fide executive, administrative or professional capacity”

(emphasis added)); Cowart v. Ingalls Shipbuilding, Inc., 213 F.3d

261, 266 (5th Cir. 2000) (same); Faludi v. U.S. Shale Sols., L.L.C.,

950 F.3d 269, 273 (5th Cir. 2020) (same).

21 See also 2019 Final Rule, 84 Fed. Reg. at 51,237 (“Salary is a

helpful indicator of the capacity in which an employee is

employed, especially among lower-paid employees. But it is not

‘capacity’ in and of itself.”); Defining and Delimiting the

Exemptions for Executive, Administrative, Professional, Outside

Sales and Computer Employees, 69 Fed. Reg. 22,122, 22,165 (Apr.

23, 2004) (codified at 29 C.F.R. 541) (“The salary level test is

intended to help distinguish bona fide executive, administrative,

and professional employees from those who were not intended by

the Congress to come within these exempt categories.”).

App-58

concerned with an employee’s actual duties as

performed in the course of his or her employment.

From its inception, the salary test’s purpose was

to serve as a helpful screen to filter out employees who

are not actually employed in a bona fide executive,

administrative, or professional capacity. 22 In other

words, recognizing how fact-intensive a duties

analysis can be, the salary test, consisting of a salary

level and salary basis component, provides a shortcut

to narrow the pool of employees whose duties merit a

closer look.

Ultimately, the validity of the salary test turns on

its effectiveness as a filter for duties. The Department

of Labor’s broad rulemaking authority stops at the

statute’s borders. Here, that means the regulations

cannot supplant the statutory exemption based on an

employee’s duties with a salary-based exemption. As

the majority recognizes, Congress has declined to

exempt employees based on their pay. Ante, at __. True

enough. Congress elected to exempt employees based

22 See Harry Kantor, Report and Recommendations on Proposed

Revisions of Regulations, Part 541, at 2-3 (1958) (“Essentially, the

salary tests are guides to assist in distinguishing bona fide

executive, administrative, and professional employees from those

who were not intended by the Congress to come within these

categories.”); Harry Weiss, Report and Recommendations on

Proposed Revisions of Regulations, Part 541, at 8 (1949)

[hereinafter “Weiss Report”] (“[T]he best single test of the

employer’s good faith in attributing importance to the employee’s

services is the amount he pays for them.”); Harold Stein, Report

and Recommendations of the Presiding Officer at Public Hearings

on Proposed Revisions of Regulations, Part 541, at 42 (1940)

[hereinafter “Stein Report”] (“The salary paid the employee is the

best single test of the employer’s good faith in characterizing the

employment as of a professional nature.”).

App-59

on the capacity in which they are employed. It’s their

duties and not their dollars that really matter.

And the Department of Labor recognizes this

limitation. For example, in 2016 the agency

promulgated a rule substantially increasing the salary

level required to qualify as an exempt employee.

Defining and Delimiting the Exemptions for Executive,

Administrative, Professional, Outside Sales and

Computer Employees, 81 Fed. Reg. 32,391 (May 23,

2016) (setting “the standard salary level for exempt

EAP employees at the 40th percentile of weekly

earnings of full-time salaried workers in the lowestwage Census Region”). This change had the effect of

excluding from the exemption 4.2 million employees

who were in fact employed in a bona fide executive,

administrative and professional capacity and who

would otherwise have been exempt. See 2019 Final

Rule, 84 Fed. Reg. at 51,238; Nevada, 275 F. Supp. 3d

at 806 (indicating the rule “more than doubles the

Department’s previous minimum salary level”). A

district court enjoined the rule because it made

“overtime status depend predominately on a minimum

salary level, thereby supplanting an analysis of an

employee’s job duties.” Nevada, 275 F. Supp. 3d at

806. The district court concluded that a minimum

salary level is permissible to the extent it “serves as a

defining characteristic when determining who, in good

faith, performs actual executive, administrative, or

professional capacity duties.” Id. at 806. The

Department of Labor accordingly withdrew the rule

and promulgated a new rule in 2019. In the new rule,

it discussed the district court decision, recognized “the

2016 final rule was in tension with the Act,” and

emphasized that a “salary level set that high does not

App-60

further the purpose of the Act, and is inconsistent with

the salary level test’s useful, but limited, role in

defining the EAP exemption.” 2019 Final Rule, 84 Fed.

Reg. at 51,238.

In sum, every salary test does not necessarily pass

statutory muster. 23 But whether the salary basis

component of the test (found in § 541.602) is invalid is

not the question before this court. 24 Cf. Auer v.

Robbins, 519 U.S. 452, 457, 117 S. Ct. 905, 909 (1997)

(upholding an agency interpretation of salary basis

while recognizing that the respondents “do not raise

23 With respect to the salary level component of the test, a panel

of this court has concluded that it can fall within the bounds of

the statutory text when appropriately set. Compare Wirtz v. Miss.

Publishers Corp., 364 F.2d 603, 608 (5th Cir. 1966) (rejecting the

argument that “the minimum salary requirement is not a

justifiable regulation under Section 13(a)(1) of the Act,” and

concluding the then-applicable salary threshold was not

“arbitrary or capricious”), with Nevada, 275 F. Supp. 3d at 806

(recognizing that Wirtz approved of a salary level test for

“identifying categories of employees Congress intended to

exempt,” but concluding the revised threshold exceeded the scope

of the statute (citing Wirtz, 364 F.2d at 608) (italics in original)).

It’s worth noting that the salary level portion of the test

seems to have the strongest support as a screen for duties in the

regulatory history. See, e.g., Weiss Report at 8 (“[T]he best single

test of the employer’s good faith in attributing importance to the

employee’s services is the amount he pays for them.”); Stein

Report at 42 (similar). Justifications for the salary basis

component of the test have historically focused on its factual

correlation to executive, administrative, and professional

employees. See, e.g., Weiss Report at 24 (recognizing that “[t]he

evidence at the hearing showed clearly that bona fide executive,

administrative, and professional employees are almost

universally paid on a salary or fee basis”). Whether this

correlation is true today remains an open question.

24

App-61

any general challenge to the Secretary’s reliance on

the salary-basis test”). The question before us is

whether § 541.604 should apply to day rate employees

who are otherwise obviously exempt under § 541.601’s

highly compensated employee provision. Today’s

holding that day rate toolpushers like Hewitt, who are

“in charge of entire departments of oil drilling

professionals,” are not actually exempt stands in

obvious tension with the statute’s focus on an

employee’s duties, 25 as well as the “limited” role of the

salary test in illuminating those duties. The path that

is more faithful to the statute is to construe § 541.601

as precluding § 541.604’s application to employees

who fall within the HCE provision. 26 Cf. Reading Law

at 63 (“A textually permissible interpretation that

furthers rather than obstructs the document’s purpose

should be favored.”).

III. CONCLUSION

The majority misreads 29 C.F.R. § 541.601 and

other regulations governing when highly compensated

employees qualify for the FLSA’s EAP exemption. In

doing so, our court turns a blind eye to such employees’

duties and construes the regulations in a way that is

25 The holding today has implications beyond the toolpushers

at issue in this case, potentially questioning the exempt statuses

of other executive, administrative, and professional day rate

employees commonly found in industries like oil and gas.

26 There is nothing “purposivist” about reading a regulation

within the context of its originating statute. See ante, at __. The

text of the FLSA includes an EAP exemption, which is “as much

a part of the FLSA’s purpose as the overtime-pay requirement.”

Encino, 138 S. Ct. at 1142. The regulations, if possible, should be

read in harmony with that text.

App-62

unmoored from the regulatory text. I respectfully

dissent.

App-63

Wiener, Circuit Judge, joined by Owen, Chief Judge,

and Jones, Dennis, and Elrod, Circuit Judges,

dissenting:

I concur in Judge Jones’s thorough dissent. But,

as the panel dissenter and one of today’s en banc

dissenters, I write separately—and at times

repetitively—to emphasize how common sense and a

reasonable reading of the law combine to demand a

result opposite the one reached originally by the panel

majority and today by the en banc majority. Frankly,

I cannot fathom how a majority of the active judges of

this court can vote to require Helix to pay overtime to

Hewitt, the supervisor of 12 to 13 hourly, hands-on

workers, when he was already paid more than twice

the cap of $100,000 per annum for overtime eligibility.

And, if that is not incomprehensible enough, keep in

mind that Hewitt worked for Helix no more than half

of the days during the calendar years at issue!

After the Fair Labor Standards Act (“FLSA”)

limits time-and-onehalf overtime pay to only those

workers who are compensated hourly for more than

forty hours of work per week, the regulations—

starting with § 541.601 (“§ 601”)—proceed to cap the

entitlement to overtime to those employees whose

earnings are deemed to be too high to entitle them to

it. Section 601 addresses the most common exclusion:

employees whose salaries alone exceed the specified

maximum. (The salary cap for overtime was $100,000

per annum for the calendar years at issue here.)

Then, in recognition that there is a subset of

workers whose annual wages alone total less than the

amount needed to disqualify them from overtime but

who nevertheless earn more than that amount when

App-64

combined with “extras,” the exclusionary net’s mesh is

made finer by the addition of § 541.604 (“§ 604”). It

covers that sub-class of workers whose annual wages

alone do not exceed § 601’s cap for overtime eligibility

but whose “wages-plus-extras” do exceed that cap.

Hewitt is excluded from overtime by § 601 for his

high salary alone, so we should both start and stop

there, never reaching § 604. Today’s majority’s failing

to stop at § 601 but proceeding to § 604 misses the

regulations’ forest for its trees. The majority focuses

on one snippet of regulatory text, ignoring the location

of that text within the context of the FLSA and the

regulations as a whole.

Common sense and congressional intent should

end our inquiry into whether Hewitt—a very highly

paid, clean-hands supervisor—is entitled to overtime.

Overtime is intended exclusively for front-line, handson laborers who earn less than one-fourth of Hewitt’s

annualized salary and less than half of the salary he

actually earned by working for Helix 28 days “on” and

28 days “off”—no more than half of each calendar year.

By working only 28 days on and 28 days off,

Hewitt could not have worked for Helix more than 183

or 184 days out of each 365-day year. Yet, for the halfcalendar years at issue here, Helix paid Hewitt in

excess of $200,000 per annum, more than twice the

regulatory cap of $100,000 per full calendar year

required by § 601 to be considered a highlycompensated, executive employee and thus not

eligible for overtime. 1

1 See id. § 541.601(a)(1). The regulatory cap is now $107,432.

App-65

As noted above, § 601 only deals with highly paid

employees like Hewitt. Since others are paid less than

the regulations consider to be an overtime-exempt

“salary” but earn more than that through a

combination of a minimum guaranteed wage plus

extras, the Act catches them in § 604’s finer net. But

that finer net is never needed, and thus should never

be considered, when an employee’s salary alone

exceeds § 601’s cap, as did Hewitt’s in the extreme.

The FLSA and its regulations have always drawn

a distinction between (1) blue collar laborers, who are

entitled to overtime, and (2) white collar professionals

and supervisors, who from the outset have been

excluded from overtime. Hewitt is a member of the

latter group. He is a “Tool Pusher,” an old Oil Patch

term of forgotten origin that does not involve any

pushing of a tool. Rather, it has always designated

supervisory employees who perform non-manual

work, directing “Roughnecks,” another ancient Oil

Patch term for the hands-on laborers who do the

manual work on oil rigs. Tool pusher Hewitt is not a

“carpenter, mechanic, plumber, iron worker,

craftsman, operating engineer, longshoreman,

construction worker,” or other manual laborer—such

as a roughneck—”who perform work involving

repetitive operations with their hands.” 2 Hewitt never

got his hands dirty—only the twelve or thirteen

roughnecks whom he supervised dirtied theirs.

Hewitt is indisputably the type of supervisory or

executive employee that has always been excluded

from overtime. Ever since 1944, when the FLSA (and,

2 29 C.F.R. § 541.601(d).

App-66

since 2004, the Department of Labor (“DOL”))

exempted highly compensated, executive employees

from overtime, 3 neither the Supreme Court nor any

federal Court of Appeals 4 has ever held that a

supervisor like Hewitt—who, as stated above, made

more than twice the regulatory cap of entitlement to

overtime by working for Helix no more than half the

days in a year—was anything but not entitled to

overtime. Until today, that is!

I imagine that the original proponents of the

FLSA—including President Franklin D. Roosevelt, 5

The FLSA has never made a distinction between highsalaried and low-salaried executive supervisors. Compare 29

U.S.C. § 213(a)(1) (1944) (no salary level), with id. § 213(a)(1)

(same) (2018). As I explain below, the FLSA’s omission of a wage

cap was intentional.

3

4 Cf. Hughes v. Gulf Interstate Field Servs., Inc., 878 F.3d 183, 185

(6th Cir. 2017) (concluding that welding inspectors—who are not

supervisors like Hewitt was—are not exempt from overtime);

Coates v. Dassault Falcon Jet Corp., 961 F.3d 1039, 1041 (8th Cir.

2020) (same for team leaders and production liaisons). The Coates

court did not once conclude that either of the employment

positions it analyzed were supervisory positions. See Coates, 961

F.3d at 1041-48.

5 President Roosevelt issued a statement opposing salary-level

amendments to the proposed Act but supported a blanket

exemption for, among others, “executive” employees. See FDR/OF

3295, Wage & Hour Division, Box 1, 1940 folder, Apr. 25, 1940

(rejecting the Barden Bill, which “would exempt all employees,

including manual workers, receiving a guaranteed monthly

salary of $150 or more,” Letter of Frances Perkins to President

Roosevelt (Apr. 16, 1940) (FDR/OF 3295, Wage & Hour Division,

DOL, Box 1, 1940 folder)).

Harold Stein, Presiding Officer of the Wage and Hour Division

hearings, under whose influence, research, and guidance the

FLSA was enacted, found that “[t]here was . . . surprisingly wide

App-67

during whose term the FLSA and other “Great

Depression” measures were enacted—are turning over

in their respective graves in reaction to the en banc

majority’s interpretation of the regulatory text to

undermine how the FLSA is supposed to operate. It

was—and still is—meant to (1) protect the average,

non-supervisory,

frequently

underpaid

and

overworked, blue-collar common laborer, and

(2) influence employers to hire more 40-hour-per-week

manual laborers (but not more supervisors, despite

the majority’s unsupported decision to include them).

In an effort to support their unprecedented

decision, today’s majority cites the official rulemaking

of the 2004 version of § 601 and notes the failed efforts

of Congress during the 1940s “to exempt all highly

paid employees.” 6 But the reason that the FLSA did

not then contain a salary cap for exempting highly

paid white-collar employees is because it did not need

such a cap! It already denied overtime to all whiteagreement that a salary qualification” is an “index to the ‘bona

fide’. . . executive character [of employment]. . . . The basis of this

agreement is easily explained. The term ‘executive’ implies a

certain prestige, status, and importance.” If these executives are

denied overtime pay, “[i]t must be assumed that they enjoy

compensatory privileges and this assumption will clearly fail if

they are not paid a salary substantially higher” than the

minimum wage. “[T]he best single test of the employer’s good faith

in attributing importance to the employee’s services is the amount

he pays for them.” United States Department of Labor, Wage and

Hour Division, “Executive, Administrative, Professional. . .

Outside Salesman Redefined,” Report and Recommendation of

the Presiding Officer at Hearings Preliminary to Redefinition,

Effective Oct. 24, 1940, at 19 (emphasis added) [hereinafter Stein

Report].

6 See ante at 2 (quoting 69 Fed. Reg. 22,122-01 (2004)).

App-68

collar employees. 7 In fact, Presiding Officer Stein

noted in his report and recommendation (which

influenced Congress to adopt the FLSA in 1944) that

“the terms ‘executive,’ ‘administrative,’ and

‘professional’ . . . in and of themselves should be

construed and were meant by Congress to exclude

from the benefits of the [A]ct all white collar

workers.” 8 Those workers were, “generally speaking,

all employees except laborers, machine operators and

tenders, craftsmen, and maintenance workers.” 9

So, while it is true that the FLSA did not

originally include a salary cap, it did make a

distinction between (1) “executive[s]” 10 like Hewitt,

who were considered “bosses” 11 and thus not entitled

to overtime, and (2) non-administrative, nonprofessional, blue-collar workers—like the roughnecks

Hewitt supervised—who were entitled to overtime,

7 See 29 U.S.C. §§ 201-19 (1944); see also Deborah C. Malamud,

Engineering The Middle Classes: Class Line-Drawing in New

Deal Hours Legislation, 96 Mich. L. Rev. 2212, 2220 & n.29 (1998)

(discussing the “executive, administrative, [and] professional”

exemption in the originally enacted FLSA and noting that,

although the Act included no exemptions to minimum wage

provisions for upper-level employees, the Act was devoid of any

salary requirement—exemptions “which are still in effect and are

still the subject of controversy”).

8 Stein Report, at 6.

9 Id.

10 29 U.S.C. § 213(a)(1).

11 Stein Report, at 4 (Presiding Officer Stein explaining that

“executive applies with particular aptness to persons who are

commonly called ‘bosses’”); see also Malamud, supra note 7, at

2306.

App-69

regardless of how much they were paid. 12 It is on this

ground that the Supreme Court cases and ours, which

note in dictum that overtime is available even for

highly-paid bluecollar workers, must be distinguished

from today’s case. Those cases analyzed only bluecollar workers, i.e., manual laborers. They did not

analyze the FLSA, or even the regulations, as applied

to “bosses.” 13 Neither did the Hughes or Coates cases—

which the majority relies on for its questionably selflabeled “textualist” position—discuss the regulations

as applied to supervisors. 14 That’s one reason why it’s

so bewildering to me for today’s majority to insist that

Hewitt is eligible for overtime. Supervisors like Hewitt

have never been eligible for overtime.

Even more than do common sense and clear

congressional intent, the text of the regulations

confirms that today’s majority is simply wrong. The

majority views § 604(b) as an exception to the salary

basis test of § 602(a), which is incorporated into § 601

and is thus applicable to all employees who fall under

12 See Jewell Ridge Coal Corp. v. Local No. 6167, 325 U.S. 161,

162, 167 (1945) (noting that underground mine workers “are not

deprived of the benefits of the [Act] simply because they are well

paid”).

13 Compare Barrentine v. Arkansas-Best Freight Sys., Inc., 450

U.S. 728, 730 (1981) (truckdrivers), and Jewell Ridge Coal Corp.,

325 U.S. at 162 (underground mine workers), and Parrish v.

Premier Directional Drilling, 917 F.3d 369, 375, 388 (5th Cir.

2019) (directional-driller consultants and measurement-whiledrilling consultants, both non-managerial, independent

contractor positions), with ante at 2 (noting dictum from each

case and misapplying it to a highly-compensated supervisor).

14 See Hughes, 878 F.3d at 185 (welding inspectors); Coates, 961

F.3d at 1041 (team leaders and production liaisons).

App-70

that subsection. In contrast, from its title through its

entire text, § 604 covers only that sub-set of employees

who are paid a “[m]inimum guarantee plus extras.” 15

Section 604 is clearly not applicable to Hewitt, whose

salary alone exempted him from overtime and who

made no extras! 16

Hewitt earned a flat salary of $963 per day for

each and every day during which he performed any

work at all for Helix, whether fifteen minutes or

fifteen hours! And he was paid by-weekly, i.e., “on a

weekly, or less frequent basis.” 17 Furthermore,

§ 601—under which Hewitt clearly does fall—already

contemplates § 604’s “[m]inimum guarantee[s] plus

extras.” 18 As the Second Circuit stated:

15 Id. § 541.604 (emphasis added).

16 True, every day Hewitt worked beyond one day per week

could be labelled an “extra.” But additional days worked are not

the sort of “extras” that § 604 contemplates. That regulation

contemplates, for example, commissions, “flat sum[s], bonus

payment[s], and straight-time hourly amount[s],” see id.

§ 541.604(a), and additional guarantees on top of daily rates, see

id. § 541.604(b). Hewitt made none of those.

17 Id. § 541.602(a).

See id. § 541.601(b)(1) (stating that “[t]otal annual

compensation may also include commissions, nondiscretionary

bonuses, and other nondiscretionary compensation earned

during a 52-week period”); accord Anani v. CVS RX Servs., Inc.,

730 F.3d 146, 149 (2d Cir. 2013) (“We perceive no cogent reason

why the requirements of C.F.R. § 541.604 must be met by an

employee meeting the requirements of C.F.R. § 541.601. Indeed,

C.F.R. § 541.601 is rendered essentially meaningless if a ‘highly

compensated employee’ must also qualify for the exemption

under C.F.R. § 541.604 or, to state the converse, would lose the

‘highly compensated employee’ exemption by failing to qualify

under C.F.R. § 541.604. To be sure, C.F.R. § 541.604 deals with

18

App-71

The reading that gives full meaning to both

C.F.R. § 541.601 and C.F.R. § 541.604 is that

each deals with different groups of employees

who receive a ‘minimum guarantee plus

extras.’ The first exemption deals with those

employees who earn over $100,000 annually

while the second exemption deals with

employees whose guarantee with extras totals

less than $100,000 annually. 19

The example included in § 604(b) reinforces the

propriety of the Second Circuit’s analysis. It shows

exactly why that regulation deals with a different subset of employees than those who—like Hewitt—are

expressly covered by § 601.

Hewitt’s minimum guarantee of $963 per day was

more than twice the maximum of those who qualify by

not only making a low salary but also “extras.” And,

again, Hewitt made no “extras”! Thus, § 604(b) is

facially inapplicable to Hewitt. Indeed, it is a dead

letter to employees who, like Hewitt, (1) already make

more than §§ 601 and 602(a)’s salary-basis cap and

(2) make no “extras” of the kind covered by § 604.

employees who earn the ‘[m]inimum guarantee plus extras,’ but

every employee with a guaranteed weekly amount exceeding

$455 who earns over $100,000 [annually], and is therefore

purportedly exempted by C.F.R. § 541.601, also fits the

description of having a ‘minimum guarantee plus extras.’

Appellant’s interpretation thus renders C.F.R. § 541.601

superfluous.”); Litz v. Saint Consulting Grp., Inc., 772 F.3d 1, 5

(1st Cir. 2014) (adopting the Anani court’s analysis of the two

regulations).

19 Anani, 730 F.3d at 149 (emphasis added).

App-72

The majority nevertheless posits that § 604(b) is

an “exception” or “proviso” to the salary basis test. 20

But that position is internally inconsistent. If § 604(b)

were an “exception” to the salary basis test for all daily

rate employees (no matter how highly paid), why

would the Secretary not have included in § 604(b)

other important language from the salary basis test of

§ 602(a), such as the requirements that (1) “the

employee regularly receive each pay period on a

weekly, or less frequent basis” and (2) the amount be

“predetermined” and “not subject to reduction”? 21

Should we assume that the other requirements of

§ 602(a)’s salary basis test simply do not apply to daily

rate, bi-weekly paid employees like Hewitt, so long as

they also meet § 604(b)’s salary-plus-extras

requirements?

That simply cannot be. If it could, a daily rate

employee’s “minimum guarantee” (1) could be subject

to reduction, (2) could not be predetermined, and

(3) could be disbursed daily rather than “weekly, or

less frequent[ly].” And, the majority’s “common sense”

arguments that (1) “we typically associate the concept

of ‘salary’ with . . . stability and security” 22 and

(2) § 604(b) allows an employee to anticipate what he

will earn, 23 would crumble. Yet the majority’s analysis

leads directly to such untenable results, without any

explanation or textual support whatsoever.

20 Ante at 6.

21 29 C.F.R. § 541.602(a).

22 See ante at 3

23 See id. at 8.

App-73

Neither can § 604(b) be a “proviso” to the salary

basis test. According to the majority’s own reasoning,

a daily rate cannot be received “on a weekly, or less

frequent basis,” and cannot be received “without

regard to the number of days or hours worked.” But

these are two requirements of the salary basis test. 24

Therefore, according to the majority’s reasoning,

§ 604(b) must be an exception to the salary basis test’s

requirements, not a “proviso.” According to the

majority, meeting that test’s requirements on its own

terms is simply impossible. As stated in the preceding

paragraph, if § 604(b) were an exception to a daily-rate

employee’s meeting the salary basis test’s

requirements, then that salary could (1) be subject to

reduction, (2) not be predetermined, and (3) be

disbursed daily rather than “weekly or less

frequently.” The majority’s position on this point is

simply untenable.

The First and Second Circuits have already

recognized that there is an easy and logical way to

read § 601 and § 604(b) in harmony: Each section

applies to an entirely different subset of employees! 25

Hewitt was clearly a member of the § 601 subset (he

was paid in excess of $100,000 per annum). He was

just as clearly not a member of the § 604 subset (he

earned too much and he received no extras).

In stark contrast to those other circuits’

indisputably correct analyses, the way that today’s

majority proposes to harmonize § 601 and § 604(b)

simply will not work. It applies rules to oranges that

24 See 29 C.F.R. § 541.602(a), (a)(1).

25 See supra note 18.

App-74

are intended for apples! The majority focuses on an

isolated phrase in one subsection of § 604 and applies

it not only to hourly rate workers but to all daily rate

employees too, regardless of (1) how much money they

are paid, (2) whether or not they receive “extras,” and

(3) whether they are supervisory employees or manual

laborers.

Most importantly, perhaps, the majority’s new

overtime test for highly compensated, daily rate,

executive employees is entirely detached from the

reality of our time. Back in the 1940s, when the FLSA

was enacted, exemptions were based on “class” lines. 26

Hourly rate, blue collar laborers were considered to be

low class, while daily, weekly, and monthly rate, white

collar employees were considered high class. 27 In fact,

Presiding Officer Stein explicitly noted that daily rate

workers like Hewitt could qualify as salary based. He

stated in his report and recommendation that

“[a]nother type of situation in which the [salary basis]

requirement will be met is that of an employee paid on

a daily or shift basis, if the employment arrangement

includes a provision that he will receive not less than

the amount specified in the regulations in any week in

which he performs any work.” 28

26 See generally Malamud, supra note 7.

See id. at 2288 (noting President Roosevelt’s Secretary of

Labor Frances Perkins’s understanding “that the division

between ‘hourly’ versus ‘salaried’ workers was not merely

random—that there was a tradition of paying factory workers of

all skill levels on an hourly rate and office, supervisory, and

professional staff regardless of duties on a salaried basis”).

27

28 Stein Report, at 26.

App-75

Today—almost eighty years later—class lines

have been abandoned. Today, paying daily rates to

supervisory, executive employees (including those

working in the mineral exploration, discovery, and

production industry) is not only common: It is a

necessary method of calculating compensation. Amici

helpfully point out that daily rates for tool pushers

“reflect the historic economic balance the industry

must maintain given the highly unpredictable nature

of oil patch work.” The Supreme Court has

“counsel[ed]” us “in favor of a functional, rather than

a formal, inquiry, one that views an employee’s

responsibilities in the context of the particular

industry in which the employee works.” 29

Yet today’s majority ignores the Supreme Court’s

guidance in favor of an antiquated view of what is a

“salary,” stating that a daily-rate-only method of

payment can never be considered a salary. 30 If that

holding is allowed to stand, the “oyl biddness,” a vital

industry in our region and one which provides more

than 400,000 direct jobs, will suffer needlessly and

excessively.

In sum, both the purpose and the text of the FLSA

and its regulations demand a result opposite the one

reached by both the panel majority and today’s en

banc majority. Those majorities proudly and

29 Christopher v. SmithKline Beecham Corp., 567 U.S. 142, 161

(2012) (emphasis added).

30 See ante at 3 (“By contrast, we do not ordinarily think of daily

or hourly wage earners . . . as ‘salaried’ employees.”); id. at 4

(requiring a minimum guarantee in addition to a daily rate for a

daily rate employee’s earnings arrangement to be considered a

salary).

App-76

repeatedly call themselves “textualist” for reaching

that result. But—as I believe I have shown—the

correct reading of the applicable texts demands the

opposite outcome. And, by engaging in only its skewed

version of textualism while ignoring or misapplying

the history of the exemptions, the majority’s holding

contravenes common sense and provides a detailed

but

ultimately

unnecessary

and

misguided

discussion. 31

We should be very dubious whenever the

regulatory text is interpreted in isolation to reach an

illogical and unexpected result. This is just such a

case.

I respectfully dissent.

31 I suspect that one of the majority’s responses to my “common

sense” approach will be that it is common sense that workers

would rather spend some time at home with loved ones rather

than at work. See ante at 26 (“Millions of Americans prefer more

free time over more money.”). While true in the abstract, this

response ignores the fact that exemptions to the FLSA’s overtime

requirements exist in the first place. Do most employees enjoy

their free time? Yes, but not all employees are entitled to

overtime pay just because they enjoy their free time.

App-77

Appendix B

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF TEXAS

________________

No. 17-CV-2545

________________

MICHAEL J. HEWITT, et al.,

v.

Plaintiffs,

HELIX ENERGY SOLUTIONS GROUP, INC., et al.,

Defendants.

________________

Filed: Dec. 21, 2018

________________

MEMORANDUM OPINION AND ORDER

________________

I.

INTRODUCTION

Pending before the Court are the parties’ cross

motions for summary judgment. The plaintiff, Michael

J. Hewitt (the “plaintiff”), filed a motion for partial

summary judgment (Dkt. No. 28), to which the

defendants, Helix Energy Solutions Group Inc. and

Helix Well Ops (collectively the “defendants”)

responded (Dkt. No. 31), and the plaintiff replied (Dkt.

No. 33). The defendants filed a cross-motion for

summary judgment (Dkt No. 29), to which the plaintiff

responded (Dkt. No. 30), and the defendants replied

(Dkt. No. 32). After having carefully considered the

motions, responses, replies, the record and the

applicable law, the Court determines that the

App-78

plaintiff’s motion should be DENIED, and the

defendants’ motion should be GRANTED.

II. FACTUAL

AND

BACKGROUND 1

PROCEDURAL

The defendants are an oil and gas services

company that provide rigless offshore well

intervention

services.

The

defendants

use

semisubmersible vessels that operate up to 10,000 feet

below sea level. Each vessel has a marine crew and a

project crew. The marine crew maintains the vessel in

proper working order while the project crew focuses on

the operations of the vessel. The highest-ranking

member of the project crew is the Superintendent,

followed by the Toolpusher. The Toolpusher

supervises the work of the Driller, Drill Crew, and

Crane Crew. It is customary for the Toolpusher to

supervise approximately twelve to thirteen employees

during a shift. The Toolpusher is also responsible for

completing personnel evaluation forms at the end of

each shift. Some of a Toolpusher’s other duties entail:

•

•

•

Overseeing and assisting the Driller in the

execution of the program.

Ensure company programs are carried out

safely and effectively.

Conduct pre-tour meetings with all crews to

communicate

daily

objectives . . . safety

precautions and training activities.

1 Throughout this section, this Court references exhibits

presented in the record, and attachments to the defendants’

motion for summary judgment (Dkt. No. 29). Specific references

to intervals will not be made.

App-79

Ensure that the deck crew led by the Crane

Operator organizes the checks.

(Dkt. No. 29, Ex. C-1).

•

The plaintiff worked for the defendants on its

vessels as a Toolpusher from December 2014, until

August 1, 2017. The plaintiff’s offer letter indicated

that the defendants would pay him a daily rate of

$1,341.00, to be paid on a bi-weekly basis. The

plaintiff’s daily rate was not based on the quality of his

work nor the number of hours that he worked in a

given day. 2 Toolpushers generally make 6 offshore

trips a year, during those offshore trips they work 28

days. While on a vessel, the plaintiff usually worked

twelve-hour shifts from the hours of 6 p.m. to 6 a.m. It

is undisputed that he was paid over $200,000 a year

while working for the defendants and never made less

than $455 in any week that he worked.

The plaintiff filed this instant suit on

approximately August 18, 2017, alleging that the

defendants misclassified his job position as exempt

and improperly paid him a day rate, in violation of the

Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 207,

211. The plaintiff argues that the record proves that

he was not paid a salary and instead received a day

rate, which would make him a non-exempt employee

who is entitled to overtime pay. The defendants deny

all allegations and assert that the plaintiff was exempt

from the FLSA’s overtime requirements, under both

the executive and highly compensated exemptions.

The plaintiff now moves for a partial summary

2 While working as a Toolpusher for the defendant, the plaintiff

received day rates of $1,341, $1,220, $963, and $1,171. (Dkt.

No. 29, Ex. C-7).

App-80

judgment against the pleaded defenses, while the

defendants move for summary judgment on all the

plaintiff’s claims.

III. LAW APPLICABLE TO CASE

A. Summary Judgment Standard

Rule 56 of the Federal Rules of Civil Procedure

authorizes summary judgment against a party who

fails to make a sufficient showing of the existence of

an element essential to the party’s case and on which

that party bears the burden at trial. See Celotex Corp.

v. Catrett, 477 U.S. 317, 322 (1986); Little v. Liquid Air

Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc).

The movant bears the initial burden of “informing the

district court of the basis for its motion” and

identifying those portions of the record “which it

believes demonstrate the absence of a genuine issue of

material fact.” Celotex, 477 U.S. at 323; see also

Martinez v. Schlumber, Ltd., 338 F.3d 407, 411 (5th

Cir. 2003). Summary judgment is appropriate where

“the pleadings, the discovery and disclosure materials

on file, and any affidavits show that there is no

genuine issue as to any material fact and that the

movant is entitled to judgment as a matter of law.”

Fed. R. Civ. P. 56(c).

If the movant meets its burden, the burden then

shifts to the nonmovant to “go beyond the pleadings

and designate specific facts showing that there is a

genuine issue for trial.” Stults v. Conoco, Inc., 76 F.3d

651, 656 (5th Cir. 1996) (citing Tubacex, Inc. v. M/V

Risan, 45 F.3d 951, 954 (5th Cir. 1995); Little, 37 F.3d

at 1075). “To meet this burden, the nonmovant must

‘identify specific evidence in the record and articulate

the ‘precise manner’ in which that evidence support[s]

App-81

[its] claim[s].’” Stults, 76 F.3d at 656 (citing Forsyth v.

Barr, 19 F.3d 1527, 1537 (5th Cir.), cert. denied, 513

U.S. 871, 115 S. Ct. 195, 130 L. Ed. 2d 127 (1994)). It

may not satisfy its burden “with some metaphysical

doubt as to the material facts, by conclusory

allegations, by unsubstantiated assertions, or by only

a scintilla of evidence.” Little, 37 F.3d at 1075 (internal

quotation marks and citations omitted). Instead, it

“must set forth specific facts showing the existence of

a ‘genuine’ issue concerning every essential

component of its case.” Am. Eagle Airlines, Inc. v. Air

Line Pilots Ass’n, Intern., 343 F.3d 401, 405 (5th Cir.

2003) (citing Morris v. Covan World Wide Moving,

Inc., 144 F.3d 377, 380 (5th Cir. 1998)).

“A fact is material only if its resolution would

affect the outcome of the action, . . . and an issue is

genuine only ‘if the evidence is sufficient for a

reasonable jury to return a verdict for the

[nonmovant].’” Wiley v. State Farm Fire and Cas. Co.,

585 F.3d 206, 210 (5th Cir. 2009) (internal citations

omitted). When determining whether a genuine issue

of material fact has been established, a reviewing

court is required to construe “all facts and

inferences . . . in the light most favorable to the

[nonmovant].” Boudreaux v. Swift Transp. Co., Inc.,

402 F.3d 536, 540 (5th Cir. 2005) (citing Armstrong v.

Am. Home Shield Corp., 333 F.3d 566, 568 (5th Cir.

2003)). Likewise, all “factual controversies [are to be

resolved] in favor of the [nonmovant], but only where

there is an actual controversy, that is, when both

parties have submitted evidence of contradictory

facts.” Boudreaux, 402 F.3d at 540 (citing Little, 37

F.3d at 1075 (emphasis omitted)). Nonetheless, a

reviewing court is not permitted to “weigh the

App-82

evidence or evaluate the credibility of witnesses.”

Boudreaux, 402 F.3d at 540 (quoting Morris, 144 F.3d

at 380). Thus, “[t]he appropriate inquiry [on summary

judgment] is ‘whether the evidence presents a

sufficient disagreement to require submission to a jury

or whether it is so one-sided that one party must

prevail as a matter of law.’” Septimus v. Univ. of

Hous., 399 F.3d 601, 609 (5th Cir. 2005) (quoting

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251 - 52

(1986)).

B. The FLSA and its Exemptions

The FLSA establishes the general rule that all

employees must receive overtime compensation for

hours worked in excess of forty hours during a sevenday workweek. See 29 U.S.C. § 207(a)(1). Employees

are entitled to overtime compensation according to the

general rule unless their employer proves that one of

the many exemptions applies. The defendants assert

that, as a Toolpusher, the plaintiff is not entitled to

overtime compensation under the general rule

because he falls within the executive and highly

compensated exceptions. The Fifth Circuit has long

held that FLSA exemptions are to be narrowly

construed. See Blackmon v. Brookshire Grocery Co.,

835 F.2d 1135, 1137 (5th Cir. 1988). The employer has

the burden of proving that the employee is exempt

from the FLSA general rule. See Heidtman v. County

of El Paso, 171 F.3d 1038, 1042 (5th Cir. 1999).

However, the ultimate decision of whether the

plaintiff qualifies for an exemption under the FLSA’s

overtime requirements is a question of law. See Lott v.

Howard Wilson Chrvsler-Plymouth, Inc., 203 F.3d

326, 331 (5th Cir. 2000).

App-83

IV. ANALYSIS AND DISCUSSION

A. Salary Basis

The plaintiff’s sole contention, and where the

Court starts its analysis, is whether the defendants

have met their burden of proving that they paid the

plaintiff on a salary basis. The FLSA provides that, to

qualify as exempt, the employee must, be

“[c]ompensated on a salary or fee basis at a rate of not

less than $455 per week[.]” 29 C.F.R. § 541.200(a)(1).

The regulatory definition of “salary basis” establishes

a general rule that:

An employee will be considered to be paid on

a “salary basis” within the meaning of these

regulations if the employee regularly receives

each pay period on a weekly, or less frequent

basis, a predetermined amount constituting

all or part of the employee’s compensation,

which amount is not subject to reduction

because of variations in the quality or

quantity of the work performed. [Subject to

exceptions] an exempt employee must receive

the full salary for any week in which the

employee performs any work without regard

to the number of days or hours worked.

29 C.F.R. § 541.602(a). The regulation does provide for

exceptions, in which an employer is permitted to take

deductions from an employee’s pay. See 29 C.F.R.

§ 541.602(b).

The plaintiff argues that he was not paid on a

salary basis because his pay “fluctuated” based on the

number of days he worked. The plaintiff explained

that unlike salaried employees, he was only paid for

the days that he worked. The defendants argue that

App-84

the plaintiff’s pay satisfies the salary basis test

because the summary judgment evidence shows that

the plaintiff always received more than $455 a week,

and that he was paid on a bi-weekly basis. The Court

finds the plaintiff’s argument unavailing. The

regulation does not require that the plaintiff be

guaranteed to work a prescribed number of days, but

instead demands that the plaintiff be paid a

predetermined amount, not to fall below $455 during

any week in which he works. See 29 C.F.R. § 602(a)(1)

(“Exempt employees need not be paid for any

workweek in which they perform no work.”); see also

Valcho v. Dallas County Hosp. Dist., 658 F. Supp. 2d

802, 809 (N.D. Tex. 2009) (pay on an hourly basis can

satisfy the salary basis test “provided [the employee]

was guaranteed the minimum required amount

regardless of the number of hours worked”). Although

the plaintiff did not work every day that he was on the

vessel, the pay he received for the days that he worked

never fell below the requisite amount. In fact, the

summary judgment record shows that the plaintiff’s

predetermined daily rate was more than double the

required weekly amount, and it remained constant

regardless of the quantity or quality of his work. Thus,

the Court finds that the plaintiff was paid on a salary

basis.

B. The Executive Exemption

The defendants argue that even if the plaintiff

was a non-exempt employee, his job falls within the

executive exemption. The FLSA provides that any

employee “employed in a bona fide executive [or]

administrative . . . capacity” is exempt from the

general rule requiring overtime compensation. 29

App-85

U.S.C. § 213(a)(1). To qualify as a bona fide executive,

the employee must satisfy the following requirements:

(1) The employee is compensated on a salary basis

at a rate of not less than $455 per week . . . ,

exclusive of board, lodging or other facilities;

(2) The employee’s primary duty consists of

management of the enterprise in which he is

employed or of a customarily recognized

department or subdivision thereof; and

(3) The employee’s responsibilities include the

customary and regular direction of the work of at

least two or more other employees.

29 C.F.R. § 541.1(f). To qualify as a bona fide executive

employee, the employee’s primary duty must be the

performance of office or non-manual work directly

related to management policies or general business

operations of his employer, including work requiring

the exercise of discretion and independent judgment.

See 29 C.F.R. § 541.2. The plaintiff concedes that the

defendants satisfy the “duty prong” of both the

executive and highly compensated exemption tests

(Dkt. No. 28 at 7), and as mentioned above the plaintiff

was paid on a salary basis at a rate of double the

weekly minimum. Accordingly, the Court finds that

the plaintiff’s employment falls within the exemption

of an executive employee.

C. Highly

Compensated

Exemption

Employee

The defendants also argue that the plaintiff

satisfied the requirements for the highly compensated

employee exemption. The highly compensated

employee exemption applies to employees who have a

App-86

“total annual compensation of at least $100,000.00”

(which must include at least $455.00 per week paid on

a salary or fee basis) and who regularly and

customarily perform at least one of the duties of an

executive administrative, or professional employee. 29

C.F.R. § 541.601(a), (b)(1). “An employee may qualify

as a highly compensated executive employee, for

example, if the employee customarily and regularly

directs the work of two or more other employees, even

though the employee does not meet all of the other

requirements for the executive exemption under

§ 541.100.” 29 C.F.R. § 541.601(c). An employee may

still qualify for the highly compensated employee

exemption if his yearly compensation is more than

$100,000, even if he has not a worked a full 52-week

period. See 29 C.F.R. § 541.601(b)(3) (if an employee

works for the employer only part of a year, the

employee may qualify for the exemption if the

employee “receives a pro rata portion” of $100,000

“based upon the number of weeks that employee will

be or has been employed.”). As a Toolpusher, the

plaintiff customarily and regularly directed the work

of two or more employees. Though he may not have

worked every day of a work week, the plaintiff

annually earned well over $100,000 while working for

the defendants. Thus, the defendants have met its

burden of showing that the plaintiff satisfied the

requirements of the highly compensated employee

exemption.

V. CONCLUSION

Based on the foregoing analysis and discussion,

the defendants’ motion for summary judgment is

App-87

GRANTED and the plaintiff’s partial motion for

summary judgment is DENIED.

It is so ORDERED.

SIGNED on this 21st day of December, 2018.

[handwritten: signature]

Kenneth M. Hoyt

United States District Judge

App-88

Appendix C

RELEVANT STATUTORY PROVISION AND

FEDERAL REGULATIONS

29 U.S.C. § 213(a)(1)

(a) Minimum

requirements

wage

and

maximum

hour

The provisions of sections 206 (except subsection (d) in

the case of paragraph (1) of this subsection) and 207 of

this title shall not apply with respect to—

(1) any employee employed in a bona fide

executive,

administrative,

or

professional

capacity (including any employee employed in the

capacity of academic administrative personnel or

teacher in elementary or secondary schools), or in

the capacity of outside salesman (as such terms

are defined and delimited from time to time by

regulations of the Secretary, subject to the

provisions of subchapter II of chapter 5 of title 5,

except that an employee of a retail or service

establishment shall not be excluded from the

definition of employee employed in a bona fide

executive or administrative capacity because of

the number of hours in his workweek which he

devotes to activities not directly or closely related

to the performance of executive or administrative

activities, if less than 40 per centum of his hours

worked in the workweek are devoted to such

activities); or

*

*

*

App-89

29 C.F.R. § 541.601 [Version effective until Jan.

1, 2020] Highly compensated employees.

(a) An employee with total annual compensation of at

least $ 100,000 is deemed exempt under section

13(a)(1) of the Act if the employee customarily and

regularly performs any one or more of the exempt

duties or responsibilities of an executive,

administrative or professional employee identified in

subparts B, C or D of this part.

(b)(1) “Total annual compensation” must include at

least $ 455 per week paid on a salary or fee basis.

Total annual compensation may also include

commissions, nondiscretionary bonuses and other

nondiscretionary compensation earned during a

52-week period. Total annual compensation does

not include board, lodging and other facilities as

defined in § 541.606, and does not include

payments for medical insurance, payments for life

insurance, contributions to retirement plans and

the cost of other fringe benefits.

(2) If an employee’s total annual compensation

does not total at least the minimum amount

established in paragraph (a) of this section by the

last pay period of the 52-week period, the

employer may, during the last pay period or

within one month after the end of the 52-week

period, make one final payment sufficient to

achieve the required level. For example, an

employee may earn $ 80,000 in base salary, and

the employer may anticipate based upon past

sales that the employee also will earn $ 20,000 in

commissions. However, due to poor sales in the

final quarter of the year, the employee actually

App-90

only earns $ 10,000 in commissions. In this

situation, the employer may within one month

after the end of the year make a payment of at

least $ 10,000 to the employee. Any such final

payment made after the end of the 52-week period

may count only toward the prior year’s total

annual compensation and not toward the total

annual compensation in the year it was paid. If

the employer fails to make such a payment, the

employee does not qualify as a highly

compensated employee, but may still qualify as

exempt under subparts B, C or D of this part.

(3) An employee who does not work a full year for

the employer, either because the employee is

newly hired after the beginning of the year or ends

the employment before the end of the year, may

qualify for exemption under this section if the

employee receives a pro rata portion of the

minimum amount established in paragraph (a) of

this section, based upon the number of weeks that

the employee will be or has been employed. An

employer may make one final payment as under

paragraph (b)(2) of this section within one month

after the end of employment.

(4) The employer may utilize any 52-week period

as the year, such as a calendar year, a fiscal year,

or an anniversary of hire year. If the employer

does not identify some other year period in

advance, the calendar year will apply.

(c) A high level of compensation is a strong indicator

of an employee’s exempt status, thus eliminating the

need for a detailed analysis of the employee’s job

duties. Thus, a highly compensated employee will

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qualify for exemption if the employee customarily and

regularly performs any one or more of the exempt

duties or responsibilities of an executive,

administrative or professional employee identified in

subparts B, C or D of this part. An employee may

qualify as a highly compensated executive employee,

for example, if the employee customarily and regularly

directs the work of two or more other employees, even

though the employee does not meet all of the other

requirements for the executive exemption under §

541.100.

(d) This section applies only to employees whose

primary duty includes performing office or nonmanual work. Thus, for example, non-management

production-line workers and non-management

employees in maintenance, construction and similar

occupations such as carpenters, electricians,

mechanics, plumbers, iron workers, craftsmen,

operating engineers, longshoremen, construction

workers, laborers and other employees who perform

work involving repetitive operations with their hands,

physical skill and energy are not exempt under this

section no matter how highly paid they might be.

29 C.F.R. § 541.602 [Version effective until Jan.

1, 2020] Salary basis.

(a) General rule. An employee will be considered to

be paid on a “salary basis” within the meaning of these

regulations if the employee regularly receives each

pay period on a weekly, or less frequent basis, a

predetermined amount constituting all or part of the

employee’s compensation, which amount is not subject

to reduction because of variations in the quality or

quantity of the work performed. Subject to the

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exceptions provided in paragraph (b) of this section, an

exempt employee must receive the full salary for any

week in which the employee performs any work

without regard to the number of days or hours worked.

Exempt employees need not be paid for any workweek

in which they perform no work. An employee is not

paid on a salary basis if deductions from the

employee’s predetermined compensation are made for

absences occasioned by the employer or by the

operating requirements of the business. If the

employee is ready, willing and able to work,

deductions may not be made for time when work is not

available.

(b) Exceptions. The prohibition against deductions

from pay in the salary basis requirement is subject to

the following exceptions:

(1) Deductions from pay may be made when an

exempt employee is absent from work for one or

more full days for personal reasons, other than

sickness or disability. Thus, if an employee is

absent for two full days to handle personal affairs,

the employee’s salaried status will not be affected

if deductions are made from the salary for two

full-day absences. However, if an exempt

employee is absent for one and a half days for

personal reasons, the employer can deduct only

for the one full-day absence.

(2) Deductions from pay may be made for

absences of one or more full days occasioned by

sickness or disability (including work-related

accidents) if the deduction is made in accordance

with a bona fide plan, policy or practice of

providing compensation for loss of salary

App-93

occasioned by such sickness or disability. The

employer is not required to pay any portion of the

employee’s salary for full-day absences for which

the employee receives compensation under the

plan, policy or practice. Deductions for such fullday absences also may be made before the

employee has qualified under the plan, policy or

practice, and after the employee has exhausted

the leave allowance thereunder. Thus, for

example, if an employer maintains a short-term

disability insurance plan providing salary

replacement for 12 weeks starting on the fourth

day of absence, the employer may make

deductions from pay for the three days of absence

before the employee qualifies for benefits under

the plan; for the twelve weeks in which the

employee receives salary replacement benefits

under the plan; and for absences after the

employee has exhausted the 12 weeks of salary

replacement benefits. Similarly, an employer may

make deductions from pay for absences of one or

more full days if salary replacement benefits are

provided under a State disability insurance law or

under a State workers’ compensation law.

(3) While an employer cannot make deductions

from pay for absences of an exempt employee

occasioned by jury duty, attendance as a witness

or temporary military leave, the employer can

offset any amounts received by an employee as

jury fees, witness fees or military pay for a

particular week against the salary due for that

particular week without loss of the exemption.

App-94

(4) Deductions from pay of exempt employees

may be made for penalties imposed in good faith

for infractions of safety rules of major

significance. Safety rules of major significance

include those relating to the prevention of serious

danger in the workplace or to other employees,

such as rules prohibiting smoking in explosive

plants, oil refineries and coal mines.

(5) Deductions from pay of exempt employees

may be made for unpaid disciplinary suspensions

of one or more full days imposed in good faith for

infractions of workplace conduct rules. Such

suspensions must be imposed pursuant to a

written policy applicable to all employees. Thus,

for example, an employer may suspend an exempt

employee without pay for three days for violating

a generally applicable written policy prohibiting

sexual harassment. Similarly, an employer may

suspend an exempt employee without pay for

twelve days for violating a generally applicable

written policy prohibiting workplace violence.

(6) An employer is not required to pay the full

salary in the initial or terminal week of

employment. Rather, an employer may pay a

proportionate part of an employee’s full salary for

the time actually worked in the first and last week

of employment. In such weeks, the payment of an

hourly or daily equivalent of the employee’s full

salary for the time actually worked will meet the

requirement. However, employees are not paid on

a salary basis within the meaning of these

regulations if they are employed occasionally for a

few days, and the employer pays them a

App-95

proportionate part of the weekly salary when so

employed.

(7) An employer is not required to pay the full

salary for weeks in which an exempt employee

takes unpaid leave under the Family and Medical

Leave Act. Rather, when an exempt employee

takes unpaid leave under the Family and Medical

Leave Act, an employer may pay a proportionate

part of the full salary for time actually worked.

For example, if an employee who normally works

40 hours per week uses four hours of unpaid leave

under the Family and Medical Leave Act, the

employer could deduct 10 percent of the

employee’s normal salary that week.

(c) When calculating the amount of a deduction from

pay allowed under paragraph (b) of this section, the

employer may use the hourly or daily equivalent of the

employee’s full weekly salary or any other amount

proportional to the time actually missed by the

employee. A deduction from pay as a penalty for

violations of major safety rules under paragraph (b)(4)

of this section may be made in any amount.

29 C.F.R. § 541.604 [Version effective until Jan.

1, 2020] Minimum guarantee plus extras.

(a) An employer may provide an exempt employee

with additional compensation without losing the

exemption or violating the salary basis requirement,

if the employment arrangement also includes a

guarantee of at least the minimum weekly-required

amount paid on a salary basis. Thus, for example, an

exempt employee guaranteed at least $ 455 each week

paid on a salary basis may also receive additional

compensation of a one percent commission on sales.

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An exempt employee also may receive a percentage of

the sales or profits of the employer if the employment

arrangement also includes a guarantee of at least

$ 455 each week paid on a salary basis. Similarly, the

exemption is not lost if an exempt employee who is

guaranteed at least $ 455 each week paid on a salary

basis also receives additional compensation based on

hours worked for work beyond the normal workweek.

Such additional compensation may be paid on any

basis (e.g., flat sum, bonus payment, straight-time

hourly amount, time and one-half or any other basis),

and may include paid time off.

(b) An exempt employee’s earnings may be computed

on an hourly, a daily or a shift basis, without losing

the exemption or violating the salary basis

requirement, if the employment arrangement also

includes a guarantee of at least the minimum weekly

required amount paid on a salary basis regardless of

the number of hours, days or shifts worked, and a

reasonable

relationship

exists

between

the

guaranteed amount and the amount actually earned.

The reasonable relationship test will be met if the

weekly guarantee is roughly equivalent to the

employee’s usual earnings at the assigned hourly,

daily or shift rate for the employee’s normal scheduled

workweek. Thus, for example, an exempt employee

guaranteed compensation of at least $ 500 for any

week in which the employee performs any work, and

who normally works four or five shifts each week, may

be paid $ 150 per shift without violating the salary

basis requirement. The reasonable relationship

requirement applies only if the employee’s pay is

computed on an hourly, daily or shift basis. It does not

apply, for example, to an exempt store manager paid

App-97

a guaranteed salary of $ 650 per week who also

receives a commission of one-half percent of all sales

in the store or five percent of the store’s profits, which

in some weeks may total as much as, or even more

than, the guaranteed salary.