Department of Labor in Question by a Company Suing Them over Employee Classification

A company based in Corpus Christi filed a federal lawsuit against the Department of Labor’s Secretary of Labor, Hilda Solis, on Nov. 19.

An investigation was prompted by the Department of Labor earlier in the year with claims that the company, Gate Guard Services, violated the Labor Standards Act of 1938. But it was the plaintiff who denied the allegation and contends that the contractors they hired were indeed self-employed under FLSA standards because of the nature of their jobs.

Gate Guard Services disputed the Department of Labor’s findings because they claim that the independent contractors, who were responsible to log in and recorder all drivers’ names upon entering the oil field, were not their direct employees, but were essentially self-employed. The workers were required to obtain the drivers’ information such as license plate numbers, next of kin, and up-to-date emergency contacts, in case of an emergency.

These independent contractors are required to provide their own tools, their camper and other equipment, sleeping only five to eight hours, as per their shift, in a 24-hour period. They are also paid $100 to $175 per day, with three meals a day, uninterrupted, and are allowed time for personal affairs when there are no vehicles present. Therefore, according to the lawsuit, Gate Guard Services did not provide instruction or kept daily interaction with the independent contractors other than once-a-week while servicing the septic tank.

The Department of Labor has found that Gate Guard Services owes approximately $6.9 million dollars in back wages to the independent contractors, including payment for overtime since July 2008.

However, the plaintiff has stood its ground against the allegations and requested the Department of Labor change its classification from employees to independent contractors. They said that they had complied FLSA wage provisions, stating that the independent contractors were on standby “waiting to be engaged” in between recording the entering vehicles in to the logs and therefore do not get paid for the down time. Therefore, by definition, independent contractors are considered self-employed and are not covered by the same provisions and expectations as an employee of a company under labor and tax laws.

Gregory D. Jordan is an Austin business attorney, Austin employment lawyer, and Austin business litigation lawyer. To learn more, visit

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