NOTE­BOOK

Case leads to more work­ers be­ing la­beled con­trac­tors

Houston Chronicle Sunday - - BUSINESS - lm.sixel@chron.com twit­ter.com/lm­sixel

Four years ago, a fed­eral judge in Vic­to­ria re­jected an over­time case brought by the gov­ern­ment and in do­ing so changed the way many oil field work­ers are paid.

The U.S. De­part­ment of La­bor sued Gate Guard Ser­vices, al­leg­ing the Cor­pus Christi com­pany mis­clas­si­fied its em­ploy­ees as in­de­pen­dent con­trac­tors and shorted them on over­time pay. Se­nior U.S. District Judge John Rainey dis­missed the gov­ern­ment’s ar­gu­ments, rul­ing in 2013 that the work­ers were in­de­pen­dent business own­ers be­cause they work with­out su­per­vi­sion, can do what they want when there are no ve­hi­cles to log, and can hire substitute gate watch­ers.

Even though the facts were spe­cific to Gate Guard, Rainey’s de­ci­sion spurred other en­ergy ser­vices providers to re­ex­am­ine their own work­place re­la­tion­ships. Some se­cu­rity com­pa­nies have con­verted their gate watch­ers to in­de­pen­dent con­trac­tors, who are typ­i­cally cheaper to hire be­cause they don’t get health in­sur­ance, re­tire­ment ben­e­fits or va­ca­tion time, work­place ex­perts say.

Other com­pa­nies are re­ly­ing on the Gate Guard case to de­fend their own em­ploy­ment prac­tices, in­clud­ing one in­volv­ing di­rec­tional drillers. More on that later.

David Moul­ton, a Hous­ton em­ploy­ment lawyer, points to one se­cu­rity firm to show the im­pact of the Gate Guard case. Guard 1 Ser­vices used to treat its gate guards as em­ploy­ees but switched them to in­de­pen­dent con­trac­tors after its com­peti­tor pre­vailed against the La­bor De­part­ment.

Moul­ton is fa­mil­iar with the com­pany’s em­ploy­ment his­tory be­cause he is rep­re­sent­ing a for­mer guard, Espirion Men­doza, who sued Guard 1 re­cently in Hous­ton fed­eral court on be­half of him­self and other guards who con­trolled traf­fic in and out of oil drilling sites in South Texas. Men­doza claimed that he and his col­leagues worked 168 hours a week, since they’re on duty 24/7, but were only paid for 75 hours.

He is seek­ing back wages for the other 93 hours.

Jennifer G. Black, the Hous­ton lawyer rep­re­sent­ing Guard 1, de­clined to com­ment .

But Men­doza doesn’t have to fight over em­ploy­ment sta­tus be­cause he and his col­leagues were still clas­si­fied as em­ploy­ees when he left his job last year, Moul­ton said. Other work­ers don’t have it so easy.

Some of the lawyers who suc­cess­fully de­fended Gate Guard are us­ing the same ar­gu­ments to de­fend Premier Di­rec­tional Drilling of Hous­ton, which was sued last year in San An­to­nio by drillers — called con­sul­tants by the com­pany — who claim they were mis­clas­si­fied as in­de­pen­dent con­trac­tors. The drillers, who are paid a day rate, work at least 84 hours a week but do not re­ceive over­time, ac­cord­ing to court doc­u­ments.

Premier’s lawyer, An­nette Idal­ski, was among the lawyers rep­re­sent­ing Gate Guard. Nei­ther she nor Premier re­turned calls seek­ing com­ment.

Drillers are like gate guards, ac­cord­ing to Premier’s re­quest to the court to throw out the case, in that both work pe­ri­od­i­cally, are free to re­ject jobs and can work for com­peti­tors. The case is on­go­ing, as is the de­bate over the re­spon­si­bil­i­ties com­pa­nies have for the peo­ple who work for them.

Other com­pa­nies are re­ly­ing on the Gate Guard case to de­fend their own em­ploy­ment prac­tices.

L.M. SIXEL

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