District Court Judge Enjoins Overtime Final Rule

On November 22, 2016, Judge Amos L. Mazzant III, a federal district court judge for the Eastern District of Texas, issued a preliminary nationwide injunction that temporarily enjoins the U.S. Department of Labor from implementing and enforcing a Final Rule that would have increased the minimum salary level for exempt employees from $455 per week ($23,660 annually) to $921 per week ($47,892 annually). The Final Rule was set to become effective on December 1, 2016.

As noted previously, on October 12, 2016, 21 states moved for emergency injunctive relief, arguing that the Fair Labor Standards Act’s overtime requirements violate the Constitution by regulating the States and coercing them to adopt wage policy choices that adversely affect the States’ priorities, budgets, and services. Judge Mazzant agreed.

The Fair Labor Standards Act provides, in relevant part, that “any employee employed in a bona fide executive, administrative, or professional capacity . . . as such terms are defined and delimited from time to time by regulations of the Secretary” shall be exempt from minimum wage and overtime requirements. After opining that “Congress defined the EAP exemption with regard to duties, which does not include a minimum salary level,” Judge Mazzant held that “[w]ith the Final Rule, the Department exceeds its delegated authority and ignores Congress’ intent by raising the minimum salary level such that it supplants the duties test . . . . Congress did not intend salary to categorically exclude an employee with EAP duties from the exemption.”

It is worth noting that the injunction is not permanent. However, for now, the Final Rule will not take effect on December 1, 2016.

For more information, please contact Nicole Gardner of Gardner Skelton PLLC.