A federal appeals court in New Orleans has overturned a lower court’s decision and found that directional drilling engineers can be classified as independent contractors, the Oil & Gas Journal reports.
The Feb. 28 ruling by the U.S. Fifth Circuit Court of Appeals established that directional drillers employed by Houston-based Premier Directional Drilling LLC could be independent contractors not covered by federal overtime requirements and other employee benefits.
“This case is particularly important to the oil industry, where the use of highly compensated independent contractors is essential and commonplace,” Premier President Michael Kennedy told the Oil & Gas Journal.
Premier’s lead counsel Annette Idalski, who directs the national labor and employment group at the Chamberlain Hrdlicka law firm in Atlanta, said the impact of the decision “cannot be overstated, as the prior court’s order was crippling the oil and gas industry while enabling a wave of financially devastating litigation.”
The Oil & Gas Journal reports the ruling sets a binding precedent within the Fifth Circuit for decided, pending, and future wage and hour cases, validating the oil and gas industry’s use of contract workers and protecting companies against future litigation. “Oil and gas companies can now maintain contract classification for workers and preserve their business model without fear,” Idalski told the publication.