Posted By Ron Kramer on December 15, 2009

If you signed a severance agreement in Utah where you agreed to waive your right to bring a claim for unpaid overtime in exchange for money, you should know that such releases or waivers of your unpaid overtime claims are invalid under the Fair Labor Standards Act (FLSA). In Utah, as well as elsewhere, employers are generally not allowed to base the payment of severance benefits on your agreement to release your claim for unpaid overtime wages. Bottom line: all private employees have a right to minimum wages and to overtime wages under the FLSA – even if they signed a waiver.

Under federal law, your rights to collect unpaid overtime wages are exactly the same as if you had never signed the waiver in the first place. In fact, the only way that these waivers are enforceable is if the waiver or release was supervised by a court or by the U.S. Dept. of Labor. This principle was established in the U.S. Supreme Court case of  Brooklyn Savings Bank v. O’Neill, 324 U.S. 697 (1945).

Even as recently as 2002, this long-standing principle was upheld and even extended to include a state wage and hour claim. See O’Brien v. Encotech Constr. Serv. Inc., 183 F. Supp.2d 1047 (N.D. Ill. 2002). In the O’Brien case, the court invalidated overtime waivers under both the FLSA as well as Illinois law and allowed an overtime class action to proceed. The court found that the public policy of invalidating releases under the FLSA also applied to Illinois wage law claims. By extension, these principles extend to claims brought under Utah’s Payment of Wages Act, Utah Code section 34-28-1.

Since employees are allowed under the FLSA to make a claim for unpaid overtime, it goes without saying that they are entitled to consult with legal counsel of their choice regarding the bringing of such a claim. Any clause in the severance agreement which forbids an employee to speak to others about their claim in either an individual, collective or class context, would be in invalid, just as the overtime waiver is. Furthermore, any provision that requires the employee to aid and assist the employer in defending the non-payment of overtime would likewise be invalid and contrary to rights the employees have under the FLSA.  In short, any clause or provision that either directly or indirectly attempts to dampen or stifle an employee’s ability to bring an unpaid overtime claim would not be upheld if challenged in court.

A claim for unpaid wages and/or overtime wages, must be filed in court within two years. However, where you can show that the Utah employer “willfully” violated the Federal Labor and Standards Act, then you have an extra year. See 29 U.S.C. section 255(a).

In order to prove that the violation was willful, a claimant must show that the employer “knew or showed reckless disregard” for whether the wage and labor conduct was prohibited by the FLSA. See Reich Bay, Inc. 23 F3rd 110, 117 (5th Cir. 1994). If the court does find a willful violation, the award may include the unpaid overtime wages for three years, liquidated damages in an amount equal to the unpaid overtime pay and attorney fees of the aggrieved party.

Categories: Utah Unpaid Overtime
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