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Faludi v. U.S. Shale Sols., L.L.C.

United States Court of Appeals for the Fifth Circuit

August 21, 2019, Filed

No. 17-20808


 [*217]  JENNIFER WALKER ELROD, Circuit Judge:

Appellant Jeff Faludi, a former practicing attorney, took a consulting job at an oil and gas services company. When Faludi left the company, he filed this lawsuit under the Fair Labor Standards Act (FLSA), seeking to recover unpaid overtime wages. Because Faludi was exempt from the FLSA, we AFFIRM the district court's summary judgment in favor of his former employer. However, because the district court did not state its reasons for declining to award costs to the prevailing party, we VACATE the award of costs and REMAND that issue to the district court.

Jeff Faludi became a licensed lawyer [**2]  in 1998, and he practiced law for sixteen years until he allowed his license to lapse. Around the same time, one of his former colleagues offered him a consulting position at a newly-formed oil and gas services company, U.S. Shale Solutions, L.L.C. Faludi accepted the position, and the parties signed an "Independent Contractor Master Consulting Services Agreement" in November 2014.

Under the agreement, Faludi agreed to work for U.S. Shale for "an indefinite period of time" at a rate of $1,000 per day for every day he worked in Houston and $1,350 per day for every day he worked outside of Houston. The agreement required Faludi to submit invoices to U.S. Shale for payment twice a month. The agreement also contained a non-compete clause prohibiting Faludi from working for U.S. Shale's competitors while the agreement was in effect and for one year after its termination.

During the approximately sixteen months that Faludi worked for U.S. Shale, he submitted invoices to U.S. Shale once or twice a month. Although his day rate applied regardless of how many hours he worked, he often billed U.S. Shale for less than the day rate when he did not work a full day. Faludi testified that he did this [**3]  voluntarily, and U.S. Shale paid the requested amounts without asking why Faludi had billed for less than his day rate. Even with these prorated invoices, Faludi was paid at least $1,000 for every week in which he performed work for U.S. Shale, and his annual compensation was approximately $260,000.

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936 F.3d 215 *; 2019 U.S. App. LEXIS 24936 **; 170 Lab. Cas. (CCH) P36,732; 2019 WL 3940878

JEFF FALUDI, Plaintiff — Appellant / Cross-Appellee, v. U.S. SHALE SOLUTIONS, L.L.C., Defendant — Appellee / Cross-Appellant.

Subsequent History: As Revised, August 22, 2019.

Opinion withdrawn by, Substituted opinion at Faludi v. U.S. Shale Sols., L.L.C., 2020 U.S. App. LEXIS 4791 (5th Cir. Tex., Feb. 14, 2020)

Prior History:  [**1] Appeals from the United States District Court for the Southern District of Texas.

Faludi v. US Shale Sols. LLC, 2017 U.S. Dist. LEXIS 196706 (S.D. Tex., Nov. 30, 2017)


exempt, weekly, district court, overtime, compensated, costs, salary basis, regulations, day rate, independent contractor, predetermined amount, summary judgment, frequent basis, reasonable relation, award of costs, regularly, practice of law, employees, salary, prevailing party, perform work, declining, reduction, invoices, performs, receives, reasons

Civil Procedure, Summary Judgment, Motions for Summary Judgment, Cross Motions, Appeals, Summary Judgment Review, Standards of Review, Entitlement as Matter of Law, Appropriateness, Genuine Disputes, Legal Entitlement, Materiality of Facts, Standards of Review, Abuse of Discretion, Remedies, Costs & Attorney Fees, Costs, Business & Corporate Compliance, Wage & Hour Laws, Scope & Definitions, Overtime & Work Periods, Labor & Employment Law, Exemptions, Executives & Professionals, Administrative Proceedings, Burdens of Proof, Exemptions, Costs & Attorney Fees