US Court of Appeals for the Fifth Circuit rules in favor of Latshaw Drilling in WARN Act lawsuit

On 1 August, the US Fifth Circuit Court of Appeals ruled in favor of upholding the previous decision by a US District Court in Dallas on 31 May 2016 to dismiss action filed against Latshaw Drilling Company by a former employee. The plaintiff in the case was laid off when the contractor was forced to stack 29 rigs in Q1 2015 due to the downturn.

The plaintiff had alleged that Latshaw violated the Worker Adjustment and Retraining Notification (WARN) Act, which requires employers to give affected employees a 60-day written notice before a plant closing or mass layoff in single sites of employment with 50 or more employees. The district court agreed with Latshaw’s argument that each of its drilling rigs – which each hold an average crew size of 22 – comprises an individual site of employment and are, therefore, not subject to the WARN Act. After the case was dismissed, the plaintiff’s lawyers filed for an appeal, arguing that the company’s rigs in aggregate should be considered a single site of employment.

The ruling by the Fifth Circuit Court of Appeals is the first federal appeals court to make a decision of this kind in the US, according to Trent Latshaw, President of Latshaw Drilling. Several federal cases have been filed in Texas against oil industry companies by laid off employees seeking severance pay under the WARN Act. The Fifth Circuit Court of Appeals decided to publish the opinion, according to Mr Latshaw, so the name Latshaw Drilling would be associated with the ultimate controlling case law on this issue to reference for other oilfield service companies that are fighting this same frivolous lawsuit.