The highly compensated employee (HCE) exemption under the Fair Labor Standards Act (FLSA) is one of the most complex exemptions in employment law. In the recent case of Gilchrist, et. al. v. Schlumberger Technology Corp.(5th Cir. July 14, 2025), the 5th Circuit clarifies how to analyze the HCE exemption.
To qualify for the HCE exemption, an employee must earn an annual salary of at least $100,000. However, the entire test does not hinge on salary alone. In addition to the minimum salary, the employee must customarily and regularly perform the duties of one or more of three typical white collar exemptions (executive, administrative, or professional), and also has primary duties that entail performing office or non-manual work. The key here is that if the employee does not customarily and perform the duties of one of the white collar exemptions, an employer merely has a very highly paid non-exempt employee.
Schlumberger provides oilfield services to clients engaged in the exploration and development of oil and natural gas. The plaintiffs worked for Schlumberger as Measurement-While-Drilling Field Specialists (MWDs). MWDs are responsible for providing Schlumberger’s clients “’downhole’ information such as drilling trajectory, pressure, and temperature,” which the clients in turn use “to determine how to continue drilling and how to best produce hydrocarbons.”
MWDs’ data ensures that the directional driller steers the...
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