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Ruling Preserves Industry’s Ability To Employ Independent Contractors

November 19, 2019
American Oil & Gas Reporter

“Ruling Preserves Industry’s Ability To Employ Independent Contractors" article by Annette Idalski, Peter Hall and Kyle Winnick in American Oil & Gas Reporter

In an article published on November 19, 2019 by American Oil & Gas Reporter, Annette Idalski, Peter Hall and Kyle Winnick discuss a key ruling helping preserve the oil and gas industry’s ability to employ independent contractors.

Companies within the oil and gas industry rely on skilled independent contractors on a temporary, as-needed basis. These individuals, often called consultants, contract with consulting firms to act as matchmakers, connecting one to the other. While often beneficial for both parties, some consultants have filed lawsuits seeking overtime for their work.

According to Idalski, Hall and Winnick, “The crux of these lawsuits is that the consultant-plaintiffs are not actually independent contractors, but rather employees entitled to overtime. If found to be true, the entire oil and gas industry would be adversely affected, because this would necessitate replacing the ubiquitous day rate with an hourly-plus-overtime pay structure, an arrangement that simply does not make economic sense for this industry.”

A jury seated in the U.S. District Court for the Western District of Louisiana, took slightly more than an hour to decide that rig clerk consultants suing for overtime by claiming to be employees of an invoice servicing company they had a relationship with were, in fact, independent contractors rather than employees of New Tech Global Ventures LLC, a Houston-based upstream oil and gas consultancy services company in Clay et al. v. New Tech Global Ventures LLC.

Idalski, Hall and Winnick emphasize, “Clay has significant implications for the oil and gas industry and provides important lessons for operators and consulting firms contracting with consultants.”

For the full article, please click here.