Department of Labor Appeals Overtime Injunction

New Overtime RulesA Federal judge in Texas stopped the Department of Labor’s new overtime regulations from taking effect.  Now, the Obama Administration and the Department of Labor have filed a notice of appeal, seeking to lift the temporary injunction.

The Department of Labor had issued new regulations that would force sweeping changes in American workplaces, redefining how employees are evaluated for overtime.  Many workers who  previously were exempt from being paid overtime are eligible under the new regulations.  In response, 21 states and 50 business groups, such as the U.S. Chamber of Commerce, filed lawsuits against the government to stop the regulations from taking effect. Judge Amos Mazzant, of the U.S. District Court for the Eastern District of Texas, agreed with the business groups and found that the Department of Labor had overstepped its powers.  The Judge issued a nationwide injunction, which temporarily stopped the regulations from taking effect on December 1, 2016, as planned.

In response, the Obama Administration promised to pursue all legal avenues to overturn the injunction and put the regulations into effect.  Following through on this promise, Secretary of Labor Thomas Perez filed a Notice of Appeal with the U.S. Court of Appeals for the Fifth Circuit in New Orleans.  Ordinarily, the appeals process would take considerable time.  No decision could be reached until well into 2017 and after the inauguration of Donald Trump, who is said to be critical of the new regulations’ impact on businesses.

As expected, the Department of Labor has filed a motion with the 5th Circuit on December 2, 2016, asking the Court to establish an expedited briefing schedule.  This means the normal deadlines for parties to prepare their arguments would be dramatically shortened.  The motion requests that the case be fully briefed by “February 7, 2017 and noticed for argument as soon as possible thereafter.”  This is an exceptionally fast timeline for a federal appeal, and we anticipate that the business groups will oppose such s fast-track briefing schedule.  It is important to note that February 7th is after Donald Trump will assume the Presidency.  President Trump could dictate a drastically different approach to the Department of Labor’s litigation strategy.

The 5th Circuit should issue a ruling on the expedited briefing schedule by December 8, 2016.

If you have questions about how the Department of Labor’s new regulations will affect your business, please contact the BiState Law Center.  You can schedule a time to review your business’ strategy regarding overtime pay for employees and create a game-plan to outline how your business can make 2017 more profitable than ever before.