District Court Judge Grants Injunction Putting DOL Overtime Rule on Hold

In late September 2016, twenty-one states led by Texas and Nevada, along with the U.S. Chamber of Commerce and other business groups, challenged the U.S. Department of Labor’s (“DOL”) new overtime exemption rule set to take effect on December 1, 2016, and sought a nationwide injunction preventing the rule from taking effect.  stop-sign-2

The states argued that the DOL unconstitutionally overstepped its authority by establishing a federal minimum salary level that more than doubled the minimum salary threshold required to qualify for the Fair Labor Standards Act’s (“FLSA”) white collar exemption, and that the rule would result in a substantial increase in employer operating costs. [1]  In particular, the states took issue with the policy behind the rule change, arguing that salary level alone does not reflect the type of work an employee performs, and that the DOL’s regulation disregarded the text of the FLSA by imposing a salary threshold without regard to whether an employee actually performs bona fide executive, administrative or professional duties.

On Tuesday November 22, 2016, U.S. District Judge Amos Mazzant of the Eastern District of Texas granted the states’ preliminary injunction, stopping (or at least delaying) the DOL from implementing the rule that would have expanded overtime protections to more than 4 million employees nationwide.

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