CWS 3.0: March 6, 2013

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Judge Rejects Feds’ IC Argument

A federal judge in Texas ruled in favor of Gate Guard Services L.P., upholding the firm’s practice of classifying “gate attendants” as independent contractors and not employees, according to court records. The ruling thwarted the U.S. Department of Labor’s effort to reclassify the workers as employees and force the company to pay more than $6 million in back wages.

Gate Guard Services locates people to serve as gate attendants at oilfield sites, according to court records. The workers log vehicles going into and out of the sites. And the workers live at the gates for up to 24 hours per day and must have their own recreational vehicle. They receive between $100 and $175 per day.

The ruling in favor of the Corpus Christi, Texas-based firm was handed down last month.

Initially, the Department of Labor had met with Gate Guard Services in November 2010 and demanded the company reclassify its workers and pay more than $6 million in back wages, according to court documents.

However, the judge ruled the workers were independent contractors.

Weighing in favor of the workers being independent contractors was the level of control exerted by Gate Guard Services, opportunity for the workers’ profit or loss and lack of expected permanency in the work, according to court records.

It was also noted in court records that the Army Corps of Engineers uses gate guards for some of its sites and considers them independent contractors.

“This case is a victory for businesses nationwide, but perhaps none more immediately impacted than in the energy sector,” Annette Idalski, an attorney for Gate Guard Services, said in a press release.

“More and more energy companies, particularly in the shale revolution, are choosing to hire independent contractors rather than employees in order to reduce expenses simply because the cost of taxes and benefits incurred by Obamacare are prohibitive,” Idalski said. “The re-classification sought by the current DOL would greatly increase costs for energy start-ups, with those costs passed along to oil and gas operators and, ultimately, consumers.”

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