In Helix Energy Solutions Group Inc v. Hewitt, an en banc U.S. Fifth Circuit Court of Appeals issued a 12-6 ruling last year finding that a highly paid offshore supervisor (who was paid more than $200,000 per year on a day rate basis) was entitled to overtime premium pay because he was not paid on a “salary basis” consistent with long-standing Department of Labor Regulations.

Helix Energy, with the support of amicus curiae briefing by the American Petroleum Institute, filed a petition for certiorari seeking further review of the issue, which the United States Supreme Court recently granted.

Helix, along with the API, other trade energy industry trade groups and the Attorneys General of six Republican states, argued that paying offshore supervisors on a day rate basis has been common practice in the oil and gas industry for several years, and that invalidating this practice as a method of compensating overtime exempt personnel would result in catastrophic litigation exposure for the offshore energy industry.  Under the Fair Labor Standards Act (“FLSA”) employees can sue to recover unpaid overtime premium, an equal amount of liquidated damages and attorney’s fees.  Worse yet for employers, individual employees can pursue FLSA overtime pay claims on a “collective action” basis, which, if approved by a district court, could result in a few plaintiffs and their attorneys being authorized to send notice inviting current and former employees of the employer to join (opt in) the FLSA class.

While the grant of certiorari alone does not necessarily mean that the Fifth Circuit’s decision will be overturned, the odds of that occurring appear significant. The results of the Supreme Court’s certiorari votes are not published, but under the Court’s protocols, certiorari is only granted if at least four out of the nine Justices voted in favor of Supreme court review (known as the “rule of four”).  The rule of four is an informal internal rule, and is not dictated by federal statute, formal court rules of the United States Constitution.  The court can grant review and hear oral argument even in cases where five of the nine Justices are not in favor of granting review.  So it remains possible that five of the Justices on the Court might yet vote to affirm the Fifth Circuit’s decision.

The Court’s three liberal Justices almost certainly did not vote in favor of certiorari given that the employee prevailed at the Fifth Circuit on the basis of the literal application of long-standing Department of Labor regulations that plainly require the payment of an exempt supervisor on a guaranteed salary basis (in order for them to qualify as overtime exempt).  Accordingly, it is likely that the votes to grant certiorari were cast by at least four out of the Court’s six conservative Justices – the question is whether or not five or more of these conservative Justices favor reversal of the Fifth Circuit’s decision or not.

It will be interesting to see how the Court’s conservative Justices might find a way to overturn a Fifth Circuit decision that was based on a strict construction and literal application of regulations that were issued by the Department of Labor defining the requirements of this overtime exemption –principles that are typically the hallmark of conservative jurists.

The outcome of the Hewitt case will be important to follow, as the Court’s holding will have important ramifications for employers in the oilfield and other industries that pay their highly compensated supervisors (and other overtime exempt employees) using methods other than the traditional salary basis.