On November 22, a judge in the US District Court for the Eastern District of Texas granted an emergency motion for a nationwide preliminary injunction barring implementation of the Department of Labor’s (DOL) new overtime rule.  The rule, which was scheduled to take effect on December 1, was expected to make more than four million workers eligible for overtime pay.  The court’s decision can be found under “notable cases” on the court’s website

Twenty-one states, including Ohio, argued that DOL exceeded its authority by establishing a rule requiring overtime pay for white-collar employees, even if they would fall under the executive, administrative and professional (EAP) exemption, if they earned less than the minimum salary level set in the rule.  DOL argued that the rule was necessary because Congress had not defined the terms "executive," "administrative" or "professional" capacities. 

The court traced the history of the Fair Labor Standards Act and related DOL rules, as well as DOL’s authority to make rules.  The court examined, first, whether Congress has directly spoken to the “precise question at issue” and clearly expressed its intent.  If not, the court said it would defer to the agency’s interpretation unless it is “arbitrary, capricious, or manifestly contrary to the statute.”

The court concluded that Congress “intended the EAP exemption to apply to employees doing actual executive, administrative, and professional duties,” without regard to the salary the person received.  The court stated that DOL exceeded its delegated authority and ignored Congress’s intent by raising the minimum salary level in a way that supplants the duties test.  The Court granted the requested preliminary injunction on this basis, and specifically stated that the injunction should apply nationwide.

The rule’s future is unclear.  OSBA’s legal staff will provide updates through the Legal Ledger as they become available.  

Posted by Jennifer Hardin on 12/6/2016