Executive Summary: Today, a federal District Court in Texas issued a decision declaring the Department of Labor’s (DOL’s) new overtime rules invalid and, therefore, permanently enjoining the implementation of these rules nationwide. This decision comes on the heels of a preliminary injunction issued by the same court in November 2016, halting the implementation of the new overtime rules, which were to have taken effect on December 1, 2016. Although the DOL had appealed the issuance of the preliminary injunction, this new development likely moots the pending appeal and will require President Trump and the DOL to reexamine their options going forward.
Articles Discussing Overtime Exemptions Under The FLSA.
The Fifth Circuit Court of Appeals tentatively has set oral argument for October 2nd on the Obama-era overtime pay rule that has been blocked from government enforcement by a federal district court in Texas since last November.
As a preliminary step to replacing the December 1, 2016, Fair Labor Standards Act “white collar” exemptions Final Rule, the Department of Labor has issued a Request for Information (RFI) seeking public comment on a wide variety of issues related to potential revisions of the Rule. Comments on the RFI, published in the Federal Register on July 26, 2017, are by September 25, 2017.
On July 25, 2017, the Department of Labor’s Wage and Hour Division announced its intent to publish a Request for Information (RFI) seeking input from the public before issuing revised proposed overtime exemption regulations to address, most significantly, the minimum salary level required for exempt status. These regulations apply to workers employed in an executive, administrative or professional capacity, and meet specific criteria relating to salary basis, salary level and job duties. The regulations, codified at 29 C.F.R. part 541, are referred to as the “white collar” exemptions.
On June 30, the U.S. Department of Labor filed its long-awaited brief announcing the new administration’s position on the ongoing litigation over the FLSA overtime exemption rules published last May. As readers may recall, the new rules would have increased the minimum salary for exempt employees from $455 per week to $913 per week. The rules were blocked by a preliminary injunction from a U.S. District Court just days before they were to take effect last November. The Department of Labor appealed that injunction ruling to the 5th Circuit Court of Appeals shortly before President Obama left office. That appeal has been on hold while the new administration reviewed its position on the regulations and the lawsuit.
Mortgage underwriters do not qualify for the Fair Labor Standards Act’s administrative exemption because they are more appropriately characterized as “production” employees, according to the U.S. Court of Appeals for the Ninth Circuit. McKeen-Chaplin v. Provident Savings Bank, 2017 U.S. App. LEXIS 11950 (9th Cir. July 5, 2017).
On June 7, 2017, a plaintiff brought a putative class and collective action against Chipotle for alleged violations of the Fair Labor Standards Act and New Jersey’s Wage and Hour Law.1 The plaintiff asserts the company misclassified her “apprentice” position as salaried-exempt in violation of state and federal law. She claims her duties were those of an hourly non-exempt employee and she was entitled to overtime. The plaintiff also claims that Chipotle violated the salary basis test by failing to pay her at least $913 per week in violation of a DOL overtime rule that was enjoined and never went into effect. At least as to the latter claim, the plaintiff’s complaint will likely be subject to a strong argument favoring dismissal, in light of the preliminary injunction issued last November by a federal judge in the Eastern District of Texas in Nevada v. Perez.
Last week Rep. Francis Rooney (R-FL) introduced a bill that would remove travel agents from the Department of Labor’s list of workers that cannot qualify for the Fair Labor Standards Act’s (FLSA) overtime exemption for retail workers. Under the exemption at issue, an employee must work at an establishment “recognized as retail.” In 1970, the DOL created a list of industries—including travel agents—that were expressly excluded from using this retail service establishment exemption. The Travel Agent Retail Fairness Act (H.R. 2515) would strike travel agencies from this regulatory list.
The Fifth Circuit granted the government’s request for additional time to file its final reply brief in the pending appeal of a nationwide injunction issued by a Texas District Court Judge, blocking the DOL’s controversial overtime rule raising the required salary level for the white collar exemptions.
The government has asked for another delay in submitting its final brief to the Fifth Circuit Court of Appeals regarding the DOL’s Final overtime rule, which raised the salary level for the white collar exemptions from $23,660 to $47,476. The final reply brief was scheduled to be filed on May 1, 2017, after two earlier requests for an extension. Now the government has asked for an additional 60 days, until June 30, 2017, to file the reply brief.
The appeal regarding the validity of the federal overtime rule will not be fully briefed until May 1, 2017, according to an order issued by the Fifth Circuit on February 22, 2017, granting an unopposed request by the Department of Justice for an extension.
Before the election the Department of Labor asked the Fifth Circuit Court of Appeals to expedite its appeal regarding the validity of the DOL’s Final Rule, which increased the salary level for the white collar exemptions. Earlier this week, however, following the inauguration of President Trump, the Department of Labor made the opposite request, asking the Court to slow down the process. The DOL asked the Court for additional time to submit its reply brief, currently due January 31, 2017, “to allow incoming leadership personnel adequate time to consider the issues.” The Fifth Circuit Court of Appeals granted that request on January 26, 2017, extending the due date for the reply brief to March 2, 2017.
President Trump has had a busy week since his inauguration: ordering construction of a wall, starting to unwind the ACA, arguing with the media about how many people attended his inauguration – the list goes on. One thing that he has not yet gotten to is the U.S. DOL’s stalled overtime exemption rules. Right now the rules remain in limbo, temporarily suspended by order of a U.S. District Court in Texas. That order is now on appeal to the 5th Circuit Court of Appeals. Earlier this week, the Department of Justice, representing the DOL in the case, asked the 5th Circuit to extend the due date for the government’s brief in the appeal by 30 days “to allow incoming leadership personnel adequate time to consider the issues.” The coalitions of states and business groups opposing the new rules, not surprisingly, did not oppose that request.
Earlier today, the Department of Labor filed an unopposed motion to extend the deadline for its next submission in support of its appeal of the salary basis rule injunction. The motion for extension requested until March 2, 2017 to submit the Department’s reply brief to the Fifth Circuit, and expressly stated that the extra time is “necessary to allow incoming leadership personnel adequate time to consider the issues.”
In the latest round in the litigation between 21 States, led by the State of Nevada, and the Department of Labor regarding the Final Rule, the State Plaintiffs filed their appeal brief today with the Fifth Circuit, urging the Court to affirm the district court’s order, which issued a nationwide injunction blocking the rule.