As readers of McMahon Berger’s legal blog will know, last week Federal Judge Amos Mazzant of the Eastern District of Texas issued a preliminary injunction blocking the Obama Administration’s overtime rule that was set to take effect just nine days later on December 1, 2016. This week, the Department of Labor (“DOL”) filed an appeal of that decision and will seek review of Judge Mazzant’s injunction in the United States Court of Appeals for the Fifth Circuit.
Although the appeal does not affect the injunction – the DOL’s new salary requirements for executive, administrative and professional employees remains blocked – it casts doubt on how long Judge Mazzant’s injunction will remain in effect. The Fifth Circuit Court of Appeals generally is considered to be conservative (it blocked the Obama Administration’s executive order on immigration earlier this year), but many are confident that the Fifth Circuit will reinstate the DOL’s overtime rules. For nearly 80 years, the DOL has used workers’ salaries as well as their duties to determine overtime eligibility, and Congress never has objected. Judge Mazzant’s injunction rests largely on his conclusion that the Fair Labor Standards Act does not authorize the DOL to set a “minimum salary” for exempt workers. It therefore is questionable whether even the conservative Fifth Circuit will adopt that reasoning.
But the future of the DOL’s overtime rule remains uncertain for other reasons. Even before the election, some Republican members of Congress indicated they would attempt to use the seldom-used “Congressional Review Act” to invalidate the rule. Although President-elect Trump does not appear to have spoken publicly about his position on the DOL’s rules, many believe he will be open to changing the rule in its current form. Further, it is highly unlikely the DOL’s current appeal will be argued and decided before Inauguration Day, January 20, 2017, which would mean the new Secretary of Labor will determine whether to continue to appeal Judge Mazzant’s injunction.
In sum, the future of the DOL’s new overtime rules remains as uncertain as ever. At present, employers should know that the new rule is not in effect, and should continue to comply with the existing rules regarding payment of exempt executive, administrative and professional employees.
The St. Louis employment attorneys at McMahon Berger have been representing employers across the country in labor and employment matters, including those relating to the FLSA, for sixty years, and are available to discuss these issues and others. As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation as every situation must be evaluated on its own facts. The choice of a lawyer is an important decision and should not be based solely on advertisements.