Joseph Hobbs v. Petroplex Pipe and Const, I ( 2020 )

Case: 19-50350 Document: 00515267211 Page: 1 Date Filed: 01/10/2020
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
January 10, 2020
No. 19-50350
Lyle W. Cayce
Clerk
JOSEPH HOBBS, Individually And On Behalf Of All Others Similarly
Situated; DRAKE FEENEY, Individually And On Behalf Of All Others
Similarly Situated,
Plaintiffs - Appellees
v.
PETROPLEX PIPE AND CONSTRUCTION, INCORPORATED,
Defendant - Appellant
Appeal from the United States District Court
for the Western District of Texas
Before JOLLY, SMITH, and COSTA, Circuit Judges.
E. GRADY JOLLY, Circuit Judge:
Joseph Hobbs and Drake Feeney are former pipe welders for Petroplex
Pipe & Construction, Inc. Hobbs and Feeney brought this suit in federal
district court, alleging that although they often worked more than forty hours
per week for Petroplex, they were not paid overtime as required by the Fair
Labor Standards Act of 1938, 29 U.S.C. § 201 et seq. (FLSA). Following a bench
trial, the district court held that Petroplex was liable to Hobbs and Feeney
under the FLSA. Petroplex appeals, contesting only the district court’s holding
that Hobbs and Feeney were employees instead of independent contractors.
We affirm.
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I.
Petroplex is an oilfield contractors and services company located in
Midland, Texas. Pioneer Natural Resources is one of Petroplex’s clients for
whom it provides its services. Beginning in February 2014, Pioneer asked
Petroplex to provide pipe welding services at the locations where Petroplex was
constructing oil treatment and storage facilities for Pioneer. Petroplex then
hired Sam Hardcastle and Joseph Hobbs to perform pipe welding services.
Although Hobbs and Hardcastle were initially hired as W-2 employees,
Petroplex later reclassified them as independent contractors. This change in
classification occurred after discussions between the pipe welders and
Petroplex’s president, T.R. Bridges. But nothing in the record indicates that
the pipe welders ever signed a contract with Petroplex. Subsequently, Drake
Feeney began to work as a pipe welder for Petroplex. Feeney worked for
Petroplex from July 2014 to October 2014 and then left to work closer to home.
Feeney returned to work for Petroplex in January 2016, and this time stayed
with the company until June 2016. During his fourteen-month absence from
Petroplex, Feeney provided pipe welding services to other companies. Hobbs
worked continuously for Petroplex from February 2014 until January 2017.
Although Hobbs and Feeney worked primarily as pipe welders, in the
course of the workweek, they would sometimes perform structural welding,
complete maintenance jobs, and operate forklifts for Petroplex. Depending on
the year, Petroplex paid the pipe welders at a straight hourly rate of either $70
or $80. The pipe welders testified that they did not negotiate their rate of pay.
Typically, the pipe welders would work from 7:00 AM to 5:00 PM six days a
week. And while they worked for Petroplex, neither Hobbs nor Feeney
provided pipe welding services to other companies. Hobbs and Feeney,
however, both testified about instances where they missed work for weeks at a
time.
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The welders supplied their own trucks, welding machines, beveling
machines, grinders, torches, torch hoses, leads, jack stands, hand tools, levels
and squares. The welders were also responsible for their own meals and
housing. For this purpose, both Hobbs and Feeney purchased campers to live
in while working for Petroplex. In their tax returns, Hobbs and Feeney listed
themselves as self-employed and took thousands of dollars in deductions on
work-related expenses. Petroplex paid for and supplied the welders with
consumables, such as oxygen acetylene for coating, welding rods, buffing
wheels, grinding disks, face shields, and sanding pads. Petroplex would
typically spend about $500,000 on all of its equipment at each construction
site. Petroplex would also compensate the pipe welders for the time they spent
undergoing testing and certification by Pioneer.
Petroplex set the pipe welders’ hours, and if they showed up late, sent
them home for the day. The pipe welders also took their breaks and lunches
at the same time as Petroplex’s employees. But unlike Petroplex’s employees,
Hobbs and Feeney did not receive an employee handbook or uniforms. At first,
Bridges was the person who oversaw the pipe welders and gave them
instructions, such as which job assignments to complete each day. Over time,
however, Hardcastle took on a supervisory role. After assuming this role,
Hardcastle would divide up job assignments among the pipe welders, pull
measurements on the welds, provide diagrams for the pipe welders, and send
the pipe welders home when they showed up to work late. Hobbs’s relationship
with Petroplex ended after he showed up to work late and got into an argument
with Hardcastle over Hobbs’s attitude. Feeney’s second stint with Petroplex
ended after Hardcastle indicated that Petroplex was running out of work for
him.
Hobbs and Feeney filed a FLSA collective action, alleging that Petroplex
improperly classified them as independent contractors and that they should
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have been paid overtime for hours worked in excess of forty hours per week. 1
The district court conducted a bench trial on September 4, 2018. Following the
bench trial, the district court issued findings of fact and conclusions of law in
which it held that the pipe welders were employees of Petroplex and that
Petroplex was liable for violating the FLSA. The district court then entered
final judgment in the amount of $101,600 in favor of the pipe welders. This
timely appeal followed.
II.
The FLSA requires employers to pay employees at least one-and-one-half
times the regular hourly rate for hours worked in excess of forty hours per
week. See 29 U.S.C. § 207(a)(1). Independent contractors are exempt from
such requirement. In determining employee/independent contractor status,
the “relevant question is whether the alleged employee so economically
depends upon the business to which he renders his services, such that the
individual, as a matter of economic reality, is not in business for himself.”
Thibault v. Bellsouth Telecomms., Inc., 612 F.3d 843, 845 (5th Cir. 2010). This
court utilizes “five non-exhaustive factors” to guide this inquiry. See Hopkins
v. Cornerstone Am., 545 F.3d 338, 343 (5th Cir. 2008). These “economic
realities” or Silk 2 factors are: “(1) the degree of control exercised by the alleged
employer; (2) the extent of the relative investments of the worker and the
alleged employer; (3) the degree to which the worker’s opportunity for profit or
loss is determined by the alleged employer; (4) the skill and initiative required
in performing the job; and (5) the permanency of the relationship.” Id. “No
single factor is determinative. Rather, each factor is a tool used to gauge the
1 Although several plaintiffs opted in to the collective action, the only plaintiffs
remaining at the time the district court issued its findings of fact and conclusions of law were
Hobbs, Feeney, and Benjamin Humphrey. The district court found that Humphrey’s claims
fell outside the applicable statute of limitations, a finding that is not challenged on appeal.
2 See United States v. Silk, 331 U.S. 704 (1947).
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economic dependence of the alleged employee, and each must be applied with
this ultimate concept in mind.” Id. (internal citations omitted).
Because the district court resolved this case following a bench trial, we
review the district court’s historical findings of fact for clear error. See Brock
v. Mr. W. Fireworks, Inc., 814 F.2d 1042, 1044 (5th Cir. 1987) (citing Fed. R.
Civ. P. 52(a)). The district court’s findings as to the Silk factors are “based on
inferences from fact and thus are questions of fact” that are also subject to the
clearly erroneous standard of review. See id. But the district court’s “ultimate
determination of employee status is a finding of law subject to de novo
consideration by this court.” Id. at 1045.
“[A] finding is ‘clearly erroneous’ when although there is evidence to
support it, the reviewing court on the entire evidence is left with the definite
and firm conviction that a mistake has been committed.” Anderson v. City of
Bessemer City, 470 U.S. 564, 573 (1985) (quoting United States v. U.S. Gypsum
Co., 333 U.S. 364, 395 (1948)). However, “[i]f the district court’s account of the
evidence is plausible” in the light of the entire record, this court “may not
reverse it even though convinced that had it been sitting as the trier of fact, it
would have weighed the evidence differently.” Id. at 573–74.
III.
The district court found, based on the underlying historical facts, that
four of the Silk factors—control, investment, opportunity for profit and loss,
and permanency—weighed in favor of employee status. The remaining
factor—skill and initiative—it found to be neutral. We review those findings,
keeping in mind that Brock requires us to afford the district court significant
deference.
A.
We first consider the degree of control Petroplex exercised over the pipe
welders. “Control is only significant when it shows an individual exerts such
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control over a meaningful part of the business that [the individual] stands as
a separate economic entity.” Parrish v. Premier Directional Drilling, L.P., 917
F.3d 369, 381 (5th Cir. 2019) (quoting Usery v. Pilgrim Equip. Co., Inc., 527
F.2d 1308, 1312–13 (5th Cir. 1976)). The relevant determination is whether
“the worker has a viable economic status that can be traded to other
companies, keeping in mind that lack of supervision of the individual over
minor regular tasks cannot be bootstrapped into an appearance of real
independence.” Id. (cleaned up).
The district court found that this factor weighed in favor of employee
status. This finding was not clearly erroneous. It is true, however, that
Petroplex did lack control over certain aspects of the pipe welders’ work. For
example, Pioneer determined the specifications for the pipe welders’ work and
inspected the welding, not Petroplex. But overall, the record supports the
district court’s finding that the degree of control factor weighs in favor of
employee status. First, there is evidence that Petroplex regularly assigned the
pipe welders’ specific tasks and the hours to be worked. Petroplex set the
welders’ schedule and typically required them to work from 7:00 AM to 5:00
PM. The welders were sometimes required to work late, and Hobbs testified
that he did not turn down assignments or refuse requests to stay late for fear
it could lead to termination of his employment. Hobbs additionally testified
that, if the pipe welders showed up to work late, they would be sent home for
the day. And unlike the workers in Parrish, the welders testified that they
never refused to work on assigned projects. Cf. id. at 382 (degree of control
factor favored independent contractor status where workers could turn down
projects without repercussion). Although Petroplex argues that Bridges’
testimony supports the opposite conclusion, the district court was entitled to
credit the welders’ testimony instead of Bridges’. We acknowledge that both
Hobbs and Feeney testified about instances where they missed work for weeks
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at a time, which militates against employer control of their schedule. Yet, this
testimony does not sufficiently undermine the district court’s finding that
Petroplex significantly controlled the workers’ schedule for us to conclude that
the finding was clearly erroneous. Petroplex’s control over the welders’
schedule, combined with evidence that it would discipline the welders for
arriving to work late, suggests employee status. See Carrell v. Sunland
Constr., Inc., 998 F.2d 330, 334 (5th Cir. 1993) (“Several facts weigh in favor of
employee status; for example, Sunland dictated the Welders’ schedule,
including the timing of their breaks[, and] Sunland assigned the Welders to
specific work crews . . . .”).
And the district court’s specific finding that Hardcastle, “with the
consent of Petroplex—and at its initial direction—” assigned tasks, disciplined
the pipe welders when they arrived late, and provided the pipe welders more
simplified diagrams is supported by the record. Hardcastle testified that,
although Bridges initially assigned jobs to the pipe welders, at some point,
those duties shifted to him. Further, Hardcastle testified that he had authority
to take on supervisory duties, and Bridges testified he was aware Hardcastle
was acting as a supervisor. Thus, it was reasonable for the district court to
infer that Hardcastle provided the welders’ instructions at the direction of
Petroplex. And we agree with the district court that Hardcastle’s diagrams
provided more specific instructions than the blueprints and well plans
discussed in Thibault and Parrish. Unlike the alleged employers in those
cases, who provided the workers with basic outlines that did not include
specifications, Hardcastle took Pioneer’s diagrams and provided the welders
with more specific instructions. Parrish, 917 F.3d at 381–82; Thibault, 612
F.3d at 847, 851. We thus conclude that Hardcastle’s provision of these
diagrams, combined with the other evidence of his day-to-day control over the
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pipe welders’ work, indicates that Petroplex, through Hardcastle, exercised a
significant amount of control over the welding work. 3
Finally, we conclude that it is significant to the degree of control inquiry
that the district court found that, at times, Petroplex assigned the pipe welders
with tasks other than pipe welding. Despite Petroplex’s argument to the
contrary, the district court’s finding that Petroplex assigned the welders to
tasks other than pipe welding is not clearly erroneous. Hobbs testified that,
although his main job was pipe welding, Petroplex assigned him to perform
work at its maintenance shop a handful of times and required him to
sometimes drive a forklift. Similarly, Feeney testified that if pipe welding
work was slow, Petroplex would occasionally pay him to do structural welding.
We agree with the district court that evidence Hobbs and Feeney, at times,
performed work other than pipe welding leans in favor of employee status. See
Robicheaux v. Radcliff Material, Inc., 697 F.2d 662, 665, 667 (5th Cir. 1983)
(finding employee status where only fifty percent of welders’ work was
welding). Based on the foregoing evidence, we conclude that the district court
did not clearly err when it found the degree of control factor to favor employee
status.
B.
We next consider the relative investments of the pipe welders and
Petroplex. In considering this factor, “we compare each worker’s individual
investment to that of the alleged employer.” Hopkins, 545 F.3d at 344. The
district court found that the relative investments factor weighed in favor of
employee status. Citing both Parrish and Carrell, the district court
3Although Hardcastle testified that “on occasion” other welders would make their own
drawings, the record is clear that Hardcastle provided the vast majority of these diagrams.
Thus, the district court’s conclusion that Hardcastle provided these diagrams as part of his
supervisory duties is plausible, and we will not disturb this finding on appeal.
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determined that Petroplex’s overall investment in the pipe construction
projects, of which the record supports that the plaintiffs’ welding work was an
important part, was relevant. Based on Parrish and Carrell, the district court
was entitled to make that determination. 4 Given the significant sums that
Petroplex invested in those projects 5—and notwithstanding the substantial
sums invested by Hobbs and Feeney 6—it was not clearly erroneous for the
district court to conclude that this factor cut in favor of employee status.
Moreover, the district court still would not have clearly erred even if we
view Petroplex’s relevant investments narrowly, i.e., as confined “to the specific
job the employee undertakes.” Thibault, 612 F.3d at 847. Here, the record
demonstrates that Petroplex invested in the welders’ work in the following
ways: (1) it provided a forklift to move pipes; (2) it paid for welders’ helpers to
the tune of $14 per hour; (3) it paid, on average, $100 per day per welder in
consumables; (4) it paid for forklift testing and safety school for the welders;
and (5) it spent approximately $30,000 to outfit a welding shop. While those
$14 per hour and $100 per day investments may seem insignificant at first
blush, they add up to tens of thousands of dollars per welder when annualized
for the fact that the welders worked, on average, from 7:00 AM to 5:00 PM six
4 See Parrish, 917 F.3d at 383 (“Obviously, Premier invested more money at a drill
site compared to each plaintiff’s investments.”); Carrell, 998 F.2d at 333 (“We further
recognize that Sunland's overall investment in each pipeline construction project was
obviously significant.”).
5 Petroplex would spend approximately $500,000 at each construction site.
6 Hobbs utilized two welding trucks to provide his welding services. His first welding
truck cost him approximately $30,000, he paid $7,000 to put a welding bed on it, and he paid
$3,000 to put a welding machine on it. The second truck cost him $50,000, and he paid
approximately $13,000 to put a welding machine on it. And he also spent hundreds of dollars
on beveling machines, two grinders, and two torches. Like Hobbs, Feeney paid approximately
$60,000 for a welding truck, $200 for a welding bed, $14,500 for a welding machine, and
hundreds of dollars for other welding equipment. The welders were also responsible for their
own meals and housing, and for that purpose, spent tens of thousands of dollars on campers.
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days a week. 7 When adding in the other costs above, it was not clear error for
the district court to conclude that the amounts invested by Petroplex exceeded
the sums Hobbs and Feeney themselves invested.
Further, even though the district court did not clearly err when it found
this factor to weigh in favor of employee status, it still afforded this factor little
weight in its analysis. In Parrish, 917 F.3d at 383, which also involved work
in the oil and gas industry, we accorded the investment “factor little weight, in
the light of the nature of the industry and the work involved.” We agree with
the district court’s conclusion to do so here.
C.
We now turn to consider whether Petroplex controlled the pipe welders’
year-end opportunities for profit or loss. “In evaluating this factor, it is
important to determine how the workers’ profits depend on their ability to
control their own costs. For that purpose, evidence gleaned from tax returns
can be useful.” Id. at 384 (cleaned up). This court has additionally looked to
whether the putative employer’s control over the worker’s schedule and pay
had the effect of limiting the worker’s opportunity, as an independent
contractor, for profit or loss. See Cromwell v. Driftwood Elec. Contractors, Inc.,
348 F. App’x 57, 61 (5th Cir. 2009).
The district court found that this factor weighed in favor of employee
status because Petroplex fixed the pipe welders’ hourly rate and schedule, the
welders’ year-end profits or losses did not depend on their ability to find other
work, Petroplex would assign the welders other welding work when the pipe
welding work slowed, and the pipe welders were paid the same rate without
7 For example, assuming a 48-work-week year, a single welder’s helper would cost
approximately $40,000 per year if they worked hours commensurate to the welders. And,
again assuming a 48-work-week year, Petroplex would have spent approximately $29,000 per
welder per year in consumables. The record is not clear on the number of weeks per year
Hobbs and Feeney worked, however.
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respect to their level of certification. But, as Petroplex notes, other evidence
adduced at trial suggests that the pipe welders could in some ways control their
own opportunities for profit or loss. Specifically, there was testimony that the
pipe welders controlled the costs of, for example, their business equipment; and
moreover, they took advantage of tax deductions for such business related
expenses. We have previously concluded that similar evidence supported a
finding of independent contractor status. See, e.g., Parrish, 917 F.3d at 384–
85; Thibault, 612 F.3d at 848–49.
Nonetheless, the record, as a whole, does not permit us to say that the
district court erred when it found this factor to weigh in favor of employee
status. Both Hobbs and Feeney testified that they never negotiated their rate
of pay. Thus, although Bridges testified that when Hobbs and Hardcastle were
first classified as independent contractors they negotiated their rate of pay, the
district court’s finding that Petroplex fixed the hourly rate of pay has support
in the record. We also find it irrelevant to the opportunity for profit or loss
inquiry that the pipe welders could hypothetically negotiate their rate of pay
because, under the economic realities test, “it is not what the [putative
employees] could have done that counts, but as a matter of economic reality
what they actually do that is dispositive.” See Brock, 814 F.2d at 1047. And
there is ample evidence in the record to support the district court’s finding that
the work schedule imposed by Petroplex severely limited the pipe welders’
opportunity for profit or loss. Feeney testified that the pipe welders regularly
worked more than forty hours a week and that, on average, they would work
from 7:00 AM to 5:00 PM six days a week. Hobbs and Feeney additionally
testified that given the hours they worked for Petroplex, it would have been
unrealistic for them to have worked for other companies. Although Hobbs and
Feeney did testify about instances where they missed work for weeks at a time,
they did not work for other companies during such time, which supports the
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district court’s finding that, as a matter of economic reality, the pipe welders’
schedule precluded them from working for other companies. As in Cromwell,
it is significant that the pipe welders’ work schedule for Petroplex effectively
prevented them from engaging in outside work. 348 F. App’x at 61.
We also agree with the district court that it is important to the
opportunity for profit or loss inquiry that, during the years they worked for
Petroplex, the welders’ “year-end profits or losses did not depend on their
ability to find welding work with other companies consistently or other work
generally.” As stated, Hobbs worked exclusively for Petroplex for almost three
years, and Feeney worked for no other company when he worked for Petroplex.
Thus, although in the years surrounding their work for Petroplex the pipe
welders worked for multiple companies, they are unlike the pipe welders in
Carrell, or the cable splicers in Thibault, who supplemented their income with
work for outside companies while they were working for their putative
employers. Carrell, 998 F.2d at 333–34; Thibault, 612 F.3d at 849. Feeney’s
testimony that, during downturns in the oil and gas industry, Petroplex would
occasionally provide him with structural work and Hobbs’s testimony that he
would sometimes work in the maintenance shop further bolster the district
court’s conclusion that the welders’ year-end profits did not depend on their
finding outside work. To be sure, during Feeney’s fourteen-month absence
from Petroplex, he worked for other welding companies. But this single fact
cannot lead us to conclude that the district court committed error when it found
the pipe welders’ year-end profits were independent from their need to find
available welding work. Nor does it tip the scales of the opportunity for profit
or loss factor to weigh in favor of independent contractor status. This
conclusion is especially true in the light of Feeney’s testimony that he did not
leave Petroplex due to a lack of available work, but instead, left because he
“had a good opportunity to go work closer to home and less hours.” Respecting
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the facts as the district court found them, we must say that in the light of the
pipe welders’ economic reality, the opportunity for profit or loss factor weighs
in favor of employee status.
D.
We will next consider the skill and initiative required of the pipe welders.
“Greater skill and more demonstrated initiative counsel in favor of
[independent contractor] status.” Parrish, 917 F.3d at 385. Relevant to the
initiative inquiry is the extent of discretion the worker has over his daily tasks
and whether he must take initiative to find consistent work. See id.
Here, the district court found that although the pipe welders were highly
skilled, they were not required to demonstrate initiative. “Pipe welding, unlike
other types of welding, requires specialized skills.” Carrell, 998 F.2d at 333.
Indeed, Hobbs testified that pipe welds are “pretty complicated,” and he and
Feeney had to learn pipe welding skills by observing other pipe welders.
Moreover, that the pipe welders were tested and certified in pipe welding
demonstrates that they were highly skilled workers. See id. Thus, the district
court did not err when it found that the pipe welding work performed by the
plaintiffs required specialized skills.
Nor did the district court err when it found that the pipe welders’ job did
not require them to demonstrate significant initiative. Petroplex provided the
pipe welders with their job assignments and Hardcastle’s diagrams specified
how the pipe welders were to complete their assigned tasks. Thus, as Petroplex
concedes, the pipe welders’ initiative was limited once on the job. And, unlike
the pipe welders in Carrell, during the time period relevant to this dispute,
Hobbs’s and Feeney’s success did not depend on their “ability to find consistent
work by moving from job to job and company to company.” Id. Instead, Hobbs
worked steadily for Petroplex for nearly three years, and Feeney’s fourteen-
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month absence from the company was due to a desire to work closer to home,
not lack of available work.
Although we are mindful that, in certain circumstances, a plaintiff’s
highly specialized skills could support a finding of independent contractor
status even absent demonstrated initiative, we are unable to say that the
district court clearly erred in finding this factor to be neutral. As we have
previously noted, unlike in some of our previous FLSA classification cases,
Petroplex would occasionally pay the pipe welders for work that did not require
them to use their highly specialized skills, which counsels against finding that
this factor favors independent contractor status. Thus, considering the totality
of the circumstances, and respecting the district court’s findings, we affirm the
district court’s finding that the skill and initiative factor is neutral.
E.
The final Silk factor to be considered is the permanency of the
relationship. Relevant to this factor is “whether any plaintiff ‘worked
exclusively’” for Petroplex, “the total length of the relationship,” and “whether
the work was on a ‘project-by-project basis.’” Parrish, 917 F.3d at 387. But
ultimately, “[t]he inferences gained from the length of time of the relationship
depend on the surrounding circumstances.” Id. The district court found that
this factor supports employee status.
In evaluating this factor, the district court first found that the pipe
welders were not hired on a project-by-project basis. Although Petroplex points
to evidence that could suggest that it hired the welders on a project-by-project
basis, the district court’s finding to the contrary is also plausible. Petroplex
could have up to a dozen construction projects going on at a time. Feeney
testified that Petroplex never told him that it was hiring him for a specific
project and that if he finished an assigned task, he would go to Hardcastle for
his next Petroplex assignment. Hobbs testified that Petroplex would
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sometimes move him from one of its jobs to the next Petroplex job. For
example, if a pipe already in service cracked and needed to be repaired,
Petroplex would occasionally pull Hobbs from a new construction project to
complete an emergency maintenance job. This evidence is sufficient to support
the district court’s finding that Petroplex hired the pipe welders to work on all
its pipe welding work as needed, and not on a project-by-project basis. We are
unpersuaded by Petroplex’s contention that it necessarily hired the pipe
welders on a project basis because Pioneer hired Petroplex on a project basis.
The key question is not whether Pioneer, Petroplex’s customer, used Petroplex
on a project basis but whether Petroplex hired its welders for only specific
projects. Because evidence in the record supports the district court’s finding
that Petroplex hired the pipe welders to complete all available welding work,
it did not clearly err when it made this finding.
The district court also found that Hobbs and Feeney worked exclusively
for Petroplex during the relevant time period and that the total length of the
relationship was indicative of employee status. As we have previously noted,
the record supports the district court’s finding that neither Feeney nor Hobbs
worked for another company while they were working for Petroplex. Further,
we agree with the district court that the pipe welders worked for Petroplex for
a substantial period of time. Hobbs worked for Petroplex for almost three years
and Feeney worked for Petroplex for four months and then six months. We
find the length of the pipe welders’ relationship with Petroplex to more closely
resemble the tenure of the workers in cases where we have found the
permanency of the relationship factor to weigh in favor of employee status than
the tenure of the workers in cases where we have found independent contractor
status. Compare Robicheaux, 697 F.2d at 666 (“The duration of the
relationship was from ten months to three years for each [welder]—a
substantial period of time—and except for insignificant work elsewhere, was
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exclusive[ ].”); with Carrell, 998 F.2d at 332, 334 (finding independent
contractor status where average number of weeks worked for the alleged
employer varied from approximately three to sixteen weeks per year).
We recognize that Petroplex has presented evidence that casts doubt on
whether this factor weighs in favor of employee status; that it is unusual for
pipe welders to work for one company for as long as the pipe welders worked
for Petroplex, that the pipe welders testified about instances where they took
several weeks off from work at a time, that there was a fourteen-month gap in
Feeney’s employment with Petroplex, and that Feeney testified that he ended
his employment with Petroplex due to what he perceived as a lack of available
work. All of this evidence is relevant and probative of the subject. No doubt.
Nonetheless, considering the totality of the circumstances surrounding the
welders’ employment relationship with Petroplex, we cannot reverse the
district court for clear error when it laid out all of the evidence and found this
factor to favor employee status. Besides evidence that Petroplex hired the pipe
welders to complete all its pipe welding work and that the pipe welders worked
solely for Petroplex, there is also evidence that during downturns in the oil and
gas industry, Petroplex used its pipe welders for jobs other than pipe welding.
This evidence, combined with the district court’s findings that the pipe welders
were not hired on a project basis, worked exclusively for Petroplex, and worked
for Petroplex for a substantial period of time, demonstrates strong and
sufficient evidence that the permanency of the relationship factor weighs in
favor of employee status.
F.
Because the Silk factors are non-exhaustive, we will also look to other
factors to help gauge the economic dependence of the pipe welders. Parrish,
917 F.3d at 387. Petroplex argues that other facts indicative of independent
contractor status are that the pipe welders did not wear uniforms, nor have
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No. 19-50350
Petroplex vehicles, nor receive Petroplex’s employee handbook. Though we
agree that this evidence is indicative of independent contractor status, its
significance pales in the light of the substantial evidence of economic realities
supporting the district court’s determination of employee status.
Both Petroplex and the pipe welders also ask us to consider the extent to
which the pipe welders’ work was “an integral part” of Petroplex’s business.
Other circuits, such as the Sixth and Tenth Circuits, include this consideration
as an enumerated sixth factor in the economic realities test. See, e.g., Acosta
v. Off Duty Police Servs., Inc., 915 F.3d 1050, 1055 (6th Cir. 2019); Baker v.
Flint Eng’g & Constr. Co., 137 F.3d 1436, 1443 (10th Cir. 1998). “The more
integral the worker’s services are to the business, then the more likely it is that
the parties have an employer-employee relationship.” Acosta, 915 F.3d at
1055. In support of its argument that the pipe welders were unimportant to
its business, Petroplex points to Bridges’ testimony that Petroplex is an oilfield
services company that only began providing pipe welding services in 2014 at
the behest of its client Pioneer. But, as the pipe welders note, Bridges also
testified that approximately forty percent of its construction projects require
welding and that Pioneer insisted Petroplex begin providing pipe welding and
fabrication services for it. Thus, the record demonstrates that, although pipe
welding is not the main focus of Petroplex’s business, it is integral to
Petroplex’s relationship with its major client Pioneer. We therefore consider
this factor neutral in our overall assessment under the economic realities test.
IV.
We conclude by noting that this case is not the first occasion we have had
to consider whether welders or workers in the oil and gas industry were
employees under the FLSA. And several facts present here do bear some
resemblance to the facts in Carrell, Thibault, and Parrish, in which we have
held that the putative employees were in fact independent contractors; namely,
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No. 19-50350
that the pipe welders invested a relatively significant sum in their welding
equipment, were highly skilled workers, and took several thousands of dollars
in business deductions on their taxes. Evidence that Feeney worked for other
pipe welding companies during his fourteen-month absence from Petroplex
provides additional support for a finding of independent contractor status. But
Brock makes clear that our role on appeal after a bench trial is limited. To the
extent the evidence was to be weighed, it was within the judgment of the
district court to do so. Here, the district court found that the control,
investment, opportunity for profit and loss, and permanency Silk factors all
weighed in favor of employee status. And it found the skill and initiative factor
to be neutral. Because we can discern no clear error in those findings, we
conclude that, as a matter of economic reality, Hobbs and Feeney were
Petroplex employees. Accordingly, the judgment of the district court is, in all
respects,
AFFIRMED.
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