Downsizing oil companies could see gusher of litigation — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Downsizing oil companies could see gusher of litigation

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in Employment Law,Human Resources

Falling oil prices have forced many energy companies to cut their workforces until the market recovers. Former employees on the receiving ends of those cuts could try to recover lost income through lawsuits.

Employers that fail to protect themselves may find litigation costs cutting into their bottom line. Because of its high compensation rates, the oil business can be a tempting target for plaintiffs.

Those big paychecks sometimes blur the lines between FLSA exempt and nonexempt employees. In a bid to cut large overtime costs, employers may err in employee classification, a move that could bring misclassified employees a big payday.

Advice: Regularly review your employee classifications, with input from your attorney.

Employers that use arbitration agreements can theoretically shield themselves from large legal bills and the threat of class actions, but only if those agreements are well crafted. Boilerplate agreements may not provide enough protection. To create a custom-designed agreement that will withstand legal scrutiny, consult with an attorney who knows the energy industry and the latest court rulings.

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