Several pandemic-related personnel issues are spurring a rise in lawsuits against production and midstream companies, particularly wage & hour class actions certified under the Fair Labor Standards Act (FLSA). Most of these cases are focused on the misclassification of employees as an Independent Contractor (IC) and challenges to “day rate” compensation structures. Because classes have had mixed results in getting certified, depending on the court they are in, these suits are best fought at the certification stage.

Businesses can reduce their FLSA risk by properly evaluating workers, documenting their compensation structures, and modifying contracting practices. Counsel have also had success in defeating certification by coming to court with rock-solid Master Service Agreements (MSAs) that include terms offering the best protections against such claims. Such terms include arbitration provisions, which can force classes out of court and into single-person mediation.

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