United States: Texas Federal Judge Blocks U.S. Department Of Labor from Implementing Controversial Rule Expanding Overtime Protections

On November 22, 2016, Judge Amos Mazzant of the U.S. District Court for the Eastern District of Texas entered a nationwide injunction blocking the U.S. Department of Labor from implementing a controversial rule that would have expanded overtime protections. The judge held that the rule improperly creates a de facto salary test for determining which workers fall under the Fair Labor Standards Act's "white collar" exemptions. Under the new regulations that would have gone into effect on December 1, 2016, the minimum annual salary threshold required to qualify for any "white collar" exemption was increased to $47,476, a significant increase from existing regulations.

The judge sided with 21 states and business groups by deciding to issue a preliminary injunction that blocks the DOL's overtime expansion regulation from taking effect on December 1. "The court determines that the state plaintiffs have satisfied all prerequisites for a preliminary injunction," Judge Mazzant said. Specifically, the judge held the states and business groups were able to show a likelihood of success in their challenge of the new overtime rule and irreparable harm if the new overtime rules went into effect, while the DOL failed to show it would be harmed if the rules were delayed. The court further stated that the "state plaintiffs have established a prima facie case that the Department's salary level under the final rule and the automatic updating mechanism are without statutory authority."

Given this nationwide injunction, the December 1, 2016, effective date for the new rule is stayed from implementation and enforcement pending a final decision from this court or a higher court of appeals. Wilson Elser's national Employment & Labor practice lawyers are experienced in helping organizations comply with DOL rules and are available to respond to questions you may have about this rule or others throughout the country.

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