Bust for oil fields may mean boot times for litigation

| Mar 5, 2016 | Civil Litigation

During boom times, everyone seems happy. Employers are busy and in a rush to hire employees. Workers flock to these areas, ready to grab any job, and other businesses strive to either open new locations in these areas or to work with other businesses already there as suppliers or providing other support.

North Dakota during the last five years has seen boom times. In the last year, that boom has begun to recede and in its wake, it leaves behind some things that may have been ignored during the good times.

There has been a decided increase in the amount of litigation involving workers and former workers in the oil industry, both in North Dakota and across the nation in other oil producing regions, like Wyoming and Texas.

Disputes may arise involving classification of workers as independent contractors. The oil industry has used great numbers of independent contractors and some may argue that they were misclassified and should have been considered employees for purposes of the Fair Labor Standards Act (FLSA).

Other litigation has developed with issues related to the Workers Adjustment and Retraining Act (WARN). For covered employers, the WARN Act creates additional requirements for notice when instituting mass layoffs. And with downturns and layoffs come allegations unfairness often involving age discrimination, as employers selectively downsize.

As contracts are terminated, some businesses may feel their agreement was breached, leading to breach of contract disputes. If businesses are in bankruptcy, there may be struggles for the remaining assets among creditors.

With any of these types of business litigation, it is important to act quickly, as the longer a problem is ignored, the more difficult and expensive it become to remedy.

Source: dallasnews.com, “Layoffs in the oil patch leading to increase in labor lawsuits,” Natalie Posgate, February 29, 2016