Additional Straight‑Time Pay Does Not Defeat the HCE Salary‑Basis Test; Magistrate Judges May Tax Costs Under Rule 54(d)(1)

Introduction

In Descant v. CTCI Americas, No. 25‑40112 (5th Cir. Nov. 6, 2025) (summary calendar; unpublished), the Fifth Circuit affirmed a district court’s judgment in favor of the employer, CTCI Americas, Inc., in a Fair Labor Standards Act (FLSA) overtime dispute brought by four former employees: Shane Descant, Shaun Oranday, Prentis Tatum, and Gregg Henry. The case presented three principal issues:

• Whether a defendant’s mispleaded overtime exemption (citing 29 U.S.C. § 213(b) instead of § 213(a)) can be cured, rendering a Rule 12(c) motion moot;
• Whether the employees qualified for the “highly compensated employee” (HCE) exemption—particularly in light of their receipt of “additional straight‑time” pay—and thus were exempt from overtime;
• Whether a magistrate judge may tax costs under Rule 54(d)(1) and 28 U.S.C. § 1920 pursuant to an order of reference, and whether awarding both stenographic and video deposition costs was within discretion.

The Fifth Circuit affirmed across the board: the employer’s corrected pleading sufficed; the employees were exempt HCEs as a matter of law; and the magistrate judge had authority to tax costs, including both transcript and video deposition expenses.

Summary of the Opinion

• Pleadings and Rule 12(c): Although CTCI initially cited the wrong FLSA exemption subsection, the plaintiffs had clear notice that the § 213(a) “white‑collar” exemptions were at issue; the district court properly permitted amendment under Rule 15 and denied the employees’ Rule 12(c) motion as moot.
• Summary Judgment on FLSA Exemption: The court held there was no genuine dispute of material fact that all four plaintiffs were paid on a salary basis at or above the HCE thresholds and performed at least one exempt duty. Additional straight‑time compensation did not destroy the salary‑basis test under 29 C.F.R. § 541.604(a). Summary judgment for CTCI was affirmed.
• Taxation of Costs: A magistrate judge, acting under an order of reference, had authority to tax costs as a non‑dispositive matter. The award of costs—including both stenographic deposition transcripts and video recordings—was within the court’s discretion.

Analysis

Precedents Cited and Their Influence

• Helix Energy Solutions Group, Inc. v. Hewitt, 598 U.S. 39 (2023): The Supreme Court reiterated that to qualify as exempt, employees generally must be paid on a salary basis at or above a threshold and perform exempt duties. Helix emphasized that a daily‑rate scheme fails the salary‑basis test unless it meets 29 C.F.R. § 541.604(b)’s guarantee and reasonable relationship requirements. In Descant, the Fifth Circuit relied on Helix for the importance of the salary‑basis test and to note that additional compensation does not necessarily defeat exemption when a compliant weekly salary guarantee exists (29 C.F.R. § 541.604(a)). The court distinguished hourly calculations or extra straight‑time from the kind of daily‑rate arrangement that doomed the exemption in Helix.
• Venable v. Smith Int’l, Inc., 117 F.4th 295 (5th Cir. 2024): Venable clarifies the HCE framework and the relaxed duties analysis for highly compensated employees who meet the salary‑basis and salary‑level thresholds. Descant uses Venable to underscore that HCEs need only perform “at least one” of the executive, administrative, or professional duties.
• Kelley v. Alpine Site Services, Inc., 110 F.4th 812 (5th Cir. 2024), and Cunningham v. Circle 8 Crane Services, L.L.C., 64 F.4th 597 (5th Cir. 2023): These cases provide bedrock statements of the FLSA overtime rule and reinforce the statutory baseline (overtime at 1.5x for hours above 40), against which exemptions operate. The court situates the dispute within this framework.
• Great Plains Trust Co. v. Morgan Stanley Dean Witter & Co., 313 F.3d 305 (5th Cir. 2002), and Hebert Abstract Co. v. Touchstone Properties, Ltd., 914 F.2d 74 (5th Cir. 1990): These inform the Rule 12(c) standard—judgment on the pleadings is proper only where no material facts are disputed and judgment can be rendered on the face of the pleadings.
• Rule 15/Forfeiture authorities: The panel referenced Fed. R. Civ. P. 15(b)(2) (amendments to conform to the evidence, even post‑judgment) and cited Calhoun v. Collier, 78 F.4th 846 (5th Cir. 2023) on liberal amendment. It invoked Morrow v. Jones, 140 F.4th 257 (5th Cir. 2025) to characterize unraised issues as “forfeited,” not waived, at the appellate stage.
• Costs and Magistrate Authority: The court referenced Chance v. Dallas County Hospital District, 176 F.3d 294 (5th Cir. 1999) and Richardson v. Wells Fargo Bank, N.A., 740 F.3d 1035 (5th Cir. 2014) for de novo review of legal authority to award costs, and relied on Fifth Circuit and district authorities—Mendes JR Int’l Co. v. M/V Sokai Maru, 978 F.2d 920 (5th Cir. 1992), Holland v. City of Houston (5th Cir. 2000) (unpublished), and district cases such as Oyekwe and Rodriguez—to support the proposition that, under an order of reference pursuant to 28 U.S.C. § 636, magistrate judges may tax costs as non‑dispositive matters. The Eleventh Circuit’s Pinkston v. University of South Florida Board of Trustees, 715 F. App’x 877 (11th Cir. 2017) was cited in accord.
• Favata v. National Oilwell Varco, L.P., No. 12‑CV‑0082, 2014 WL 5822781 (S.D. Tex. Nov. 10, 2014): Supporting that courts may award costs for both video and stenographic depositions where appropriate for trial preparation.

Legal Reasoning

1) Pleadings: Mispleaded Exemption and Rule 12(c)

CTCI initially pleaded an inapposite exemption—§ 213(b) (transportation, seamen, and carriers)—rather than the white‑collar exemptions of § 213(a). The plaintiffs moved for judgment on the pleadings. The Fifth Circuit agreed with the district court that:

• The parties always litigated the § 213(a) exemptions; discovery, briefing, and responses demonstrated mutual understanding that the white‑collar exemptions were in play;
• Rule 15(b)(2) authorizes amendment, even post‑judgment, to conform pleadings to issues tried by consent; and
• The plaintiffs did not timely oppose amendment and forfeited their contrary objection.

On that basis, the court affirmed denial of the Rule 12(c) motion as moot and treated CTCI’s exemption defense as properly pleaded.

2) FLSA Exemption: Highly Compensated Employees and “Additional Straight‑Time”

The central merits issue was whether the four plaintiffs were exempt HCEs. The court focused on:

• Salary Basis (29 C.F.R. § 541.602): Whether each employee received a predetermined, fixed amount each pay period not subject to reduction based on work quantity or quality.
• Salary Level and HCE Thresholds (29 C.F.R. § 541.601): For 2023, the applicable HCE thresholds were $107,432 annually and $684 weekly (the panel correctly applied the then‑current 2020 regulation; it also observed a later 2024 increase not relevant to the period at issue).
• Additional Compensation (29 C.F.R. § 541.604(a)): Employers may pay extra compensation—such as hourly “straight‑time” for hours above 40—without losing the exemption, provided there is still a guaranteed weekly salary meeting the minimum.
• Duties (29 C.F.R. § 541.601(c)): For HCEs, the duties test is relaxed; performing “at least one” of the duties of an executive, administrative, or professional employee suffices.

The record showed each plaintiff held a managerial/procurement leadership role and received an annualized base well over the HCE minimum:

• Henry: construction manager, $250,000/year (approx. $4,697/week);
• Oranday: construction manager, $166,400/year (approx. $3,200/week);
• Descant: oversaw preventive maintenance/installation, $130,000/year (approx. $2,500/week);
• Tatum: procurement/logistics lead, $130,000/year (approx. $2,500/week).

Each offer letter explicitly designated the role as exempt and provided for eligibility for additional straight‑time pay (i.e., paid at the regular hourly rate rather than time‑and‑a‑half). The Fifth Circuit held that such additional compensation is expressly permitted under § 541.604(a) and does not undermine salary‑basis status so long as the guaranteed salary exists and exceeds the minimum weekly amount. The panel further noted that calculating an hourly equivalent from the salary does not convert a salary into non‑salary pay nor otherwise defeat the exemption.

On duties, the court accepted that these senior roles easily performed at least one qualifying executive or administrative duty (e.g., managing departments or contractors, directing work, or involvement in procurement decisions with substantial authority), therefore satisfying the reduced HCE duties standard. On this undisputed record, CTCI was entitled to summary judgment.

3) Costs: Magistrate Authority and Discretion

The plaintiffs challenged the magistrate judge’s authority to tax costs after dismissal and the inclusion of both stenographic and video deposition expenses. The Fifth Circuit addressed authority and discretion separately:

• Authority: Under Rule 54(d)(1) and 28 U.S.C. § 1920, “a judge or clerk” may tax costs. When a case is referred under 28 U.S.C. § 636, taxation of costs is a non‑dispositive post‑judgment matter within a magistrate judge’s authority if the order of reference so provides. The panel, drawing on Fifth Circuit and persuasive out‑of‑circuit authority, held the magistrate judge had authority here. It also observed the plaintiffs did not raise their authority objection below—another forfeiture.
• Discretion: Awarding costs is reviewed for abuse of discretion, and there is a strong presumption in favor of costs for the prevailing party. The court cited district practice approving both transcript and video costs where appropriate to trial preparation. No abuse of discretion occurred.

Impact

• Pleading Practice: The decision reinforces that mislabeling a precise statutory subsection is not fatal where the litigation record shows the opposing party had clear notice of the actual issue, discovery proceeded on that basis, and amendment is appropriate under Rule 15(b)(2). Litigants should promptly seek leave to amend to correct such errors and should timely object to preserve contrary arguments.
• Compensation Design for Exempt Employees: Employers paying exempt HCEs a fixed salary may, consistent with § 541.604(a), provide additional “straight‑time” compensation for extra hours without losing the exemption—so long as the guaranteed weekly salary meets or exceeds the minimum threshold. The panel’s application harmonizes with Helix by distinguishing impermissible daily‑rate schemes from permitted salary‑plus‑supplement arrangements with a weekly guarantee.
• HCE Duties Showing at Summary Judgment: Where uncontested job descriptions reflect supervisory, managerial, or procurement authority, the relaxed HCE duties test can be satisfied as a matter of law, facilitating summary judgment for employers.
• Costs and Case Management: The opinion confirms pragmatic post‑judgment administration by magistrate judges. Parties should expect that, with an order of reference in place, magistrate judges may enter cost awards under Rule 54(d)(1) and § 1920, and that both video and transcript deposition costs may be recoverable when reasonably necessary.
• Regulatory Thresholds and Retroactivity: The court’s footnotes correctly apply the thresholds in effect during the claim period (2023) and acknowledge later regulatory increases effective July 1, 2024. Practitioners must match the threshold to the relevant time period.

Complex Concepts Simplified

• Salary Basis vs. Salary Level:
  • Salary basis: a fixed, predetermined amount paid each pay period, not docked for hours or quality of work (29 C.F.R. § 541.602).
  • Salary level: the minimum dollar threshold set by regulation (for HCEs, an annual total compensation threshold and a minimum weekly salary component, e.g., $107,432/year and $684/week for 2023).
• HCE Exemption (29 C.F.R. § 541.601): A highly compensated employee who is paid on a salary basis at or above the threshold and performs at least one exempt duty can be exempt from overtime.
• Additional Straight‑Time Pay (29 C.F.R. § 541.604(a)): Employers may pay extra hourly (or other) compensation to a salaried exempt employee without defeating the exemption if the guaranteed weekly salary still meets the threshold.
• Rule 12(c) vs. Rule 15(b)(2):
  • Rule 12(c) allows judgment on the pleadings when no material facts are in dispute and the complaint fails as a matter of law.
  • Rule 15(b)(2) permits amendment to conform pleadings to the issues actually litigated, even after judgment, where parties tried the issue by consent.
• Forfeiture vs. Waiver: Forfeiture is the failure to timely raise an argument; waiver is the intentional relinquishment of a known right. Unraised arguments are often deemed forfeited on appeal.
• Taxation of Costs: Under Rule 54(d)(1) and 28 U.S.C. § 1920, prevailing parties presumptively recover specified costs (e.g., fees for transcripts). With a § 636 order of reference, a magistrate judge may tax costs as a non‑dispositive matter.

Notable Clarifications and Cautions

• The opinion references “1983” as the year of the FLSA’s enactment; the Act was enacted in 1938. This appears to be a typographical error with no bearing on the outcome.
• The opinion’s discussion of weekly minimums includes historical numbers appearing in older regulations (e.g., $455/week), but its operative analysis applies the correct 2020‑era thresholds for 2023 claims ($684/week and $107,432/year). Practitioners should verify thresholds for the relevant period and jurisdiction, especially given mid‑2024 increases.

Conclusion

Descant v. CTCI Americas reinforces three practical propositions in FLSA litigation within the Fifth Circuit. First, substance prevails over form in pleadings: where discovery and briefing show the parties actually litigated the § 213(a) exemptions, a citation error can be cured under Rule 15(b)(2), and a Rule 12(c) attack fails. Second, for highly compensated employees, the exemption remains intact when a compliant guaranteed weekly salary is paid, even if the employer also pays additional “straight‑time” compensation for extra hours; such supplements are permitted by § 541.604(a). Third, under an order of reference, magistrate judges may tax costs post‑judgment as non‑dispositive matters, and awarding both transcripts and video deposition costs is within discretion where reasonably necessary.

Although unpublished, the opinion offers clear guidance on how courts will evaluate compensation structures for HCEs and manage post‑judgment costs. Employers designing pay plans for exempt personnel gain further assurance that salary‑plus‑supplement models, if anchored by a compliant weekly salary guarantee, will not by themselves jeopardize the exemption. Litigants are reminded to correct pleading miscues promptly and to preserve objections—or risk forfeiture on appeal.