Federal Court in Tennessee Rejects Argument that Severance Payments Can Offset Unpaid Overtime September 14th, 2008

Companies continue to attempt to avoid their failure to pay overtime under the FLSA by arguing that other types of payments to the employee should ”offset” the unpaid overtime. These arguments usually fail. For the most recent example, check out Mezger v. Price CPAs, PLLC, 2008 U.S. Dist. LEXIS 68859, *11-12 (M.D. Tenn. Sept. 8, 2008), where the federal court easily rejected the company’s argument that an employee’s severance payments should offset his previously unpaid overtime, even though the severence agreement did not in any way connect the severence pay to an FLSA claim. Do defense lawyers really get paid for making these kinds of arguments?

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