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Marine & Energy News Alert: Fifth Circuit Hears Oral Argument on Seaman Exemption to Fair Labor Standards Act

February 20, 2014

The United States Court of Appeals for the Fifth Circuit recently heard oral argument on the issue of whether tankermen are exempt as “seamen” from the overtime requirements of the Fair Labor Standards Act (29 U.S.C. §201, et seq.) (“FLSA”). Operators of towboats and others who transport liquid cargo over inland waterways will potentially be impacted by the outcome of the Fifth Circuit’s ruling.

The case came to the Fifth Circuit on interlocutory appeal of a January 22, 2013, decision from the Houston Division of the U.S.D.C. for the Southern District of Texas.

At the District Court, nine tankermen employed by the defendant brought suit alleging that they were misclassified by the defendant as “seamen” and thereby deprived of overtime compensation under the FLSA. Plaintiffs, who work aboard transport barges, argued that loading and unloading duties are not seaman duties under the FLSA, and that because such duties comprise a substantial amount of their work time, they fall outside of the FLSA’s seaman exception and are therefore entitled to overtime compensation. Defendant moved for summary judgment arguing that as a matter of law loading and unloading duties are seaman duties under the FLSA.

The District Court denied defendant’s motion for summary judgment. Judge Atlas held Owens v. SeaRiver Maritime, Inc., 272 F.3d 698 (5th Cir. 2001), dictated that plaintiffs’ loading and unloading duties were “not an aid in the operation of [the] vessel as a means of transportation,” and therefore these duties were not seaman’s work under the FLSA.

Oral argument before the Fifth Circuit was heard by Judges Jolly, Higginbotham, and Southwick on January 6, 2014. Argument centered around the “twenty percent rule,” which is a judicial interpretation of the statutory requirement (29 C.F.R. §783.31) that an exempt employee not perform a “substantial amount” of non-seaman work, and its application to vessel based workers. Defendant sought to distinguish Owens from the case at bar on the grounds that the nine tankermen are vessel based employees whereas Owens was a shore based worker. Although plaintiffs disputed the relevance of this distinction, the defendant’s argument appeared to have traction with the judicial panel.

The outcome of this matter is significant because if affirmed the seaman exception to the FLSA will have been limited in the Fifth Circuit, and the portion of the marine-related workforce subject to the overtime requirements of the FLSA will expand. As noted by the judicial panel, seamen could become subject “to a rule that has never been imposed upon the industry.”

The case is Kevin Coffin, et al v. Blessey Marine Services, Inc., No. 13-20144.
A link to audio recording of the oral argument is attached here.