Department of Labor Takes Surprise Appeal From Texas Decision Overturning Overtime Rule

The Department of Labor (DOL) is appealing a Texas judge’s decision to toss out an Obama-era rule that would have extended overtime pay to some 4 million Americans.

As we reported previously, the Secretary of Labor under former President Obama announced a rule raising the salary basis threshold for overtime exemption from $455/week to $913/week, which rule was to go into effect on December 1, 2016. In a last minute reprieve, Judge Amos Mazzant of the Eastern District of Texas issued a preliminary injunction, and later granted summary judgment, to opponents of the measure, ruling that the DOL exceeded its Congressionally-delegated authority by raising the salary threshold. Judge Mazzant opined that the salary level set by the DOL was so high that it defied Congress’ intention that the overtime exemption apply to employees who perform “bona fide executive, administrative or professional capacity” duties. He noted that nothing in the exemption indicates that Congress wanted the DOL to define employee classifications with respect to a minimum salary level. Judge Mazzant, however, noted he was not making any determination regarding the lawfulness of the salary level test or the DOL’s authority to issue one, saying instead that he evaluated only the salary-level test in the 2016 final regulations.

On July 26, 2017, after the preliminary injunction decision and shortly before the Judge’s ruling on summary judgment, the DOL (now through Trump appointee Secretary R. Alexander Acosta) published a Request for Information (RFI) regarding the Overtime Final Rule, asking for public input on how the DOL’s overtime regulations should be amended, if at all. The DOL received more than 140,000 comments.

Then on Monday, October 30, 2017, the DOL announced that it had filed a notice of appeal from Judge Mazzant’s summary judgment order with the US Court of Appeals for the Fifth Circuit (which has jurisdiction over appeals from, among others, Texas federal district courts). In the appeal, the DOL is seeking to defend its authority to define and delimit the overtime regulations, while still backing away from the substantially higher salary limit set by the Obama administration, a move experts say is designed to protect the agency’s authority to set a lower salary threshold for the overtime exemption that still fits the Trump administration pro-employer agenda. The DOL is asking the Fifth Circuit to hold the appeal in abeyance while it rewrites the current overtime regulations, focusing on the salary threshold, an unusual move whereby the current DOL is attempting to announce new regulations before the Fifth Circuit rules whether it even has the authority to do so. As for the anticipated new salary test, Labor Secretary Acosta has indicated on numerous occasions that the Trump DOL would seek to write a revised version of the rule that sets a salary level somewhere between the existing threshold of $23,660, set in 2004 by the Bush administration and the one proposed by the Obama administration in 2016. We will continue to report on the status of the appeal and Trump-administration labor developments.