July 30, 2025 – On July 14, 2025, the Fifth Circuit Court of Appeals published its opinion in Gilchrist v. Schlumberger Technology Corporation, No. 22-50257, 2025 WL 1924690, holding that two plaintiffs were exempt employees under the Fair Labor Standards Act’s (“FLSA”) highly compensated employee exemption.  This opinion reversed the verdict for the plaintiffs issued after a bench trial and remanded the case back to the district court to dismiss the plaintiffs’ claims in their entirety.

This case was litigated by two Kullman attorneys, Robert Lombardi and Kelly Reese.

By way of background, the two plaintiffs worked as Measurements While Drilling specialists, or “MWD” for short.  They worked on customers’ oil rigs collecting data from tools attached to the drill downhole, which provides information such as drilling trajectory, pressure, and temperature.  They then shared that data with the rig operator who used it to determine how to continue drilling.

The opinion focused on whether the plaintiffs’ work satisfied the duties prong of the highly compensated employee exemption – that is, whether the plaintiffs customarily and regularly performed any of the exempt duties of an administrative or executive employee.

The opinion held that the district court understated the plaintiffs’ duties by equating their work to the work of the plaintiffs in Hobbs v. EVO, 7 F.4th 241 (5th Cir. 2021), who the Fifth Circuit held were not exempt.  In that case, the plaintiffs’ most technical duty – at least as described by the court – was dropping a quarter in a jar of fluid from the well to see if their video camera could film objects inside the well.  In contrast, the Gilchrist court held that the “wealth and variety of data that the Gilchrist plaintiffs were collecting and reviewing went far beyond the rudimentary test conducted in Hobbs” and that the reports the MWDs submitted to the oil rig operators “easily fit[ ] into the court’s past understanding of quality control,” which is an administrative duty under the FLSA.   This was because the “data output is the product that the MWD would be providing to the client” and “quality control here means controlling the quality of the data provided to [the oil rig operator] clients.”  (Internal citations and quotations omitted).

The Court then applied Venable v. Smith Int’l, 117 4th 295 (5th Cir. 2024) (another Kullman win), to hold that the MWDs provided essential information which “crucially informed the client’s precise drilling of the well” that was “critical to the drilling operations.”  The court held that the MWDs “fit comfortably in the adviser category” of the administrative exemption.  The court then concluded that the administrative duties the MWDs performed were directly related to the management or general business operations of their employer’s customers, i.e. the oil rig operators, which satisfied the duty element of the FLSA’s highly compensated employee exemption.

Gilchrist is the most recent in a progression of Fifth Circuit cases revising its FLSA exemption analysis to adopt and align its analysis with the Supreme Court’s seminal Encino Motorcars decision in 2018. 584 U.S. 79 (2018) (courts must give the FLSA exemptions a “fair reading” rather than a narrow interpretation).  When set beside Hobbs and Smith v. Ochsner, 956 F.3d 681 (5th Cir. 2020) (organ procurement coordinators are exempt), employers now have clearer benchmarks of what type of field work does or does not constitute exempt work under the FLSA.