Ruling on Challenge to New FLSA Overtime Regulations Expected Tomorrow

In the last twomonths, we have written about two lawsuits that challenge the Department of Labor’s new regulations on the “white collar” overtime exemptions, which go into effect on December 1. It now appears that we will receive a key ruling in this case on November 22.

As you may recall, two lawsuits challenging the new regulations were filed in the same federal district court in September—one by a group of 21 states and the other by a group of 55 pro-business organizations. The two cases have since been consolidated into one. In October, the group of states filed an emergency motion for a nationwide preliminary injunction against the implementation of the new regulations.

At oral argument on November 16, the group of states contended that the DOL exceeded its statutory authority by setting a salary threshold for the exemptions, setting that threshold too high, and establishing automatic increases to that threshold. Observers are hard-pressed to guess how the judge will rule, as he asked tough questions of both sides. Notably, the judge indicated that he hopes to issue a ruling by November 22. If the injunction is denied, further argument has been scheduled for November 28 on the business group’s emergency summary judgment motion.

It is far from certain whether these challenges or any legislative efforts to overturn the new regulations will succeed. It is also unclear whether overturning or changing the new regulations through the administrative rulemaking process is a priority for President-elect Trump (or what such a regulation would look like). In light of this uncertainty, we recommend that employers continue to prepare as if the December 1 effective date of the new regulations will stand. Nevertheless, we will be sure to keep you updated of any developments on this front.

For assistance with complying with the new regulations or any other labor and employment matter, please do not hesitate to contact a member of our Labor and Employment Department: George Hlavac, Steve Hoffman, Jeff Stewart, Ed Easterly, or John Buckley.