Press Release

 Munsch Hardt Wins Fair Labor Standards Act Case for Oil and Gas Client Flowco in Jury Trial

Mar 10, 2023

HOUSTON, TEXAS (March 10, 2023) – Munsch Hardt Kopf & Harr, P.C. (“Munsch Hardt”) announced a jury verdict in favor of client Flowco Production Solutions, LLC (“Flowco”), an oil and gas company based in Houston, Texas. The final judgment was entered during the early morning of March 10, 2023. The defense was led by Munsch Hardt Shareholders Dan Pipitone and Kelly Koster, with assistance from Associate Deryck Van Alstyne.

Flowco serves North American oil and gas basins by specializing in well production optimization through the design and installation of custom artificial lift systems using gas and plunger lift techniques. Munsch Hardt has been handling the case since early 2021.

The suit involved a Fair Labor Standards Act (“FLSA”) collective action, which was filed by an employee in 2020 alleging he was not paid for overtime work. According to the Complaint, Plaintiff worked as Sales and Service Representatives for Flowco at its Midland, Texas location. They alleged they routinely worked much more than 40 hours in a workweek but were not compensated at a rate of one-and-one-half times their regular rate of pay for all hours worked in excess of 40 per week. A large number of ex-employees joined the collective action, thereby forming the Class of Plaintiffs.

Munsch Hardt’s case hinged on the “administrative” employee exemption to the FLSA. To qualify for the exemption, all of the following criteria must be met:

  1. the employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $684 per week;

  2. the employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and

  3. the employee’s primary duty must include the exercise of discretion and independent judgment with respect to matters of significance.

During the jury trial conducted in the Midland/Odessa Federal District Court, Munsch Hardt successfully argued that Plaintiffs’ primary duty involved non-manual work and that they exercised independent judgment and discretion. Therefore, they did not qualify to receive overtime pay.

“After a more than two-year ordeal, we’re pleased to see this end in a positive resolution,” said Charles Jones, CEO of Flowco. “This decision will help other business owners in the oil and gas industry, as it shows the salary-plus-bonus pay structure is permissible. The Munsch Hardt team really drove it home, and the jury ultimately returned the correct verdict thanks to the team’s tireless efforts.”

“This verdict signifies the administrative exemption is still alive and well, and more importantly, is available for use when formulating compensation structures,” said Pipitone. “It’s always a pleasure working with a great company and great people, and to be able to preserve Flowco’s business model will enable them to be successful for years to come.”

The jury verdict in Keating v. Flowco Production Solutions, LLC (W.D.Tx., 7:20-cv-00122-DC-RCG) was delivered on March 8, 2023. Other Munsch Hardt team members who were involved include paralegal Joanna Walls, as well as legal administrative assistant Crissy Bernal.