U.S. Court of Appeals for Fifth Circuit Bars Offset of Severance Payment Against Claim of Unpaid Overtime


INTRODUCTION. The United States Court of Appeals for the Fifth Circuit (the federal appeals court overseeing federal cases covering Texas, Louisiana and Mississippi) recently issued a decision that emphasizes the distinction between a severance payment and a claim for unpaid overtime. The Court ruled in Martin v.PepsiAmericas, Inc. that an employer could not attempt to offset an employee’s claim for unpaid overtime by the amount of the severance payment.

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