Last updated on November 29th, 2016 at 09:39 am
Texas federal District Judge Amos L. Mazzant III has preliminarily blocked the U.S. Labor Department’s new overtime rule, which was set to go into effect on Dec. 1.
In a ruling Tuesday, Mazzant blocked the implementation or enforcement of the salary-related changes in the federal Fair Labor Standards Act’s “white collar” exemptions. He issued his decision in response to an emergency motion by 21 states that had filed suit seeking to invalidate the Labor Department’s actions.
Mazzant said that the Labor Department’s new regulations are inconsistent with what Congress intended for these exemptions. He also concluded that, while Congress gave the Labor Department the power to define these exemptions, the agency had exceeded that authority.
A similar Texas lawsuit brought by a number of business groups and employer advocates has been consolidated with the states’ case. Mazzant ruled in the states’ lawsuit only, but he extended his order nationwide and did not say that the injunction was limited to the states alone.
“While for the moment the Labor Department’s new regulations are not scheduled to go into effect as previously ruled, it is important to understand that this is a temporary injunction and that the Labor Department is likely to appeal in every way it can,” according to a press release from the National Association of Convenience Stores (NACS).
Oral arguments for summary judgment in the overtime case are scheduled for Monday, Nov. 28. It is unclear which side of the issue will prevail, so retailers should still be prepared for a Dec. 1 enforcement date, says NACS.
Background
Ogletree Deakins, the organizer of the Food Marketing Institute’s labor coalition, has provided background on the case:
On Sept. 20, 21 states filed a lawsuit against the DOL and its Wage and Hour Division (including three officials of those agencies) challenging the overtime regulations. A few weeks later, the states filed an emergency motion seeking an injunction to halt or delay the implementation of the new overtime regulations. Meanwhile, on Oct. 19, another lawsuit—this one brought by numerous chambers of commerce and business groups also aimed at preventing the implementation of the new regulations—was consolidated with the states’ case. Before the suits were consolidated, the plaintiffs in the second suit had asked the court to consider a motion for summary judgment to halt the new regulations on an expedited basis. After the cases were consolidated, these plaintiffs also joined in the states’ request for a preliminary injunction. Mazzant conducted a hearing on the preliminary injunction motion on Nov. 16, during which he vigorously questioned both sides and took the matter under advisement. At that time, he indicated that he intended to issue a written ruling on the preliminary injunction motion on Nov. 22, which he now has done.
Impact
According to Deakins: “For the many employers that have been struggling to meet the Dec. 1 effective date, Mazzant’s ruling offers some welcome relief. It does not, however, provide any certainty for the future. Although the injunction halts the revised regulations from becoming effective on Dec. 1, it is a preliminary injunction, not a permanent one, and it does not necessarily mean that the new rule will be gone forever, either in its current form or in some revised form under a Trump administration.
“Employers that have not yet made changes therefore should continue their planning process so they can be in compliance with the revised regulations if and when they do become effective. Those that already have made changes will need to decide whether it makes business sense to suspend, alter or reverse those changes pending any subsequent legal developments. Any such decisions should be made in accordance with any applicable state and/or local notice requirements.”
*Editor’s note: Chris Cooley of MyHRConcierge has written several pieces for The Shelby Report about the overtime rules; see the most recent here.
