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BP announces massive layoffs – will unpaid wage claims follow?

BP has announced plans to layoff a massive number of people. BP’s CEO Bernard Looney said the company would layoff 10,000 employees, equating to roughly 15% of the oil major’s global workforce. The oil and gas industry has been hammered by both the Saudi-Russian price war as well as the COVID pandemic, which has caused oil prices to collapse. 

Workers in the oil and gas sector that have been furloughed or laid off entirely should make sure that they understand the overtime laws so that they can evaluate their legal rights. Workers who have signed separation agreements or other, similar releases should still educate themselves about unpaid overtime – unlike other claims that can be released by voluntary agreement, unpaid overtime claims generally cannot be, meaning that workers may still be able to assert claims for unpaid overtime even if they signed documents saying they would not sue their former employer. 

The U.S. Court of Appeals for the Fifth Circuit, which is the appellate court that oversees appeals of federal cases in Texas, Mississippi and Louisiana, held in 2015 that overtime claims cannot be released even if a legal document states that a worker is releasing “any and all claims” against the company. See Bodle v. TXL Morg. Corp., 788 F.3d 159 (5th Cir. 2015). In Bodle, the Fifth Circuit stated, “The general rule establishes that FLSA claims (for unpaid overtime, in this case) cannot be waived. Accordingly, many courts have held that, in the absence of supervision by the Department of Labor or scrutiny from a court, a settlement of an FLSA claim is prohibited.” The Court went on to hold that the parties never discussed overtime compensation or the FLSA in their settlement negotiations, thus there was no factual development of the number of unpaid overtime hours nor of compensation due for unpaid overtime, and therefore the release did not waive the claims for overtime. Other cases have reached the same conclusion. See Bryant v. United Furniture Industries, Inc., 2016 WL 2904909 (N.D. Miss. May 18, 2016) (refusing to enforce settlement in separate case in which the fact issues related to FLSA claims were not subjected to discovery), and Branson v. Pulaski Bank, 2015 WL 139759 (W.D. Mo. Jan. 12, 2015) (refusing to interpret state court settlement as disposing of FLSA claims in federal case because discovery and full analysis of the strength of FLSA claims had not occurred in the federal case with jurisdiction over them); Redzepagic v. Hammer, No. 14 Civ. 9808 (ER), 2017 WL 780809, at *3-4 (S.D.N.Y. Feb. 27, 2017) (finding that purported waiver of FLSA rights in a separation agreement was not enforceable because the fairness of the agreement had not been approved).

Under these cases, anyone who has been laid off, even those that signed broad general releases as part of a separation agreement, should promptly determine whether they may have a claim for unpaid overtime. If you think you may be owed unpaid overtime (and if you are or were paid a salary or day rate, you should always consider these issues), talk to an experienced overtime attorney. Josh Borsellino is a Texas attorney that represents workers on claims for unpaid overtime. Josh used to work for a large corporate law firm and has filed suit against some of the largest oil and gas companies in the world on behalf of workers with unpaid overtime claims. Josh can be reached at 817.908.9861 or 432.242.7118 for a free consultation. 

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