Overtime rule update: District court won’t wait for appeals court’s ruling

January 04, 2017 - by: Kate McGovern Tornone 0 COMMENTS

On January 3, a federal district court judge said he won’t halt proceedings in the case challenging the U.S. Department of Labor’s (DOL) new overtime rules despite concurrent litigation in the U.S. 5th Circuit Court of Appeals.

The rules, which were scheduled to take effect December 1, 2016, would have required employers to pay overtime to employees earning less than $913 per week ($47,476 annually).

Judge Amos L. Mazzant III of the U.S. District Court for the Eastern District of Texas issued a preliminary injunction temporarily blocking the rules from taking effect as planned. The DOL appealed the order to the 5th Circuit, and final briefs are due by January 31, 2017.

The DOL also asked the lower court to refrain from taking further action until the 5th Circuit issues a ruling on the preliminary injunction. “Concurrent proceedings in this court and the 5th Circuit on substantially similar claims would be inefficient and contrary to judicial economy,” the DOL said.

In response, the plaintiffs argued that if the lower court ruled on the summary judgment (dismissal without a trial) motion, it actually would result in less litigation. “This court’s issuance of a final judgment vacating the unlawful rule would permit the 5th Circuit to review the legality of the rule in a single proceeding after a final judgment, rather than adopting the cumbersome piecemeal approach advocated by [the] defendants,” the plaintiffs said.

Mazzant denied the DOL’s request, saying district courts must employ a four-factor test for granting such stays. According to U.S. Supreme Court precedent, courts must consider “(1) whether the stay applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure other parties interested in the proceeding; and (4) where the public interest lies.”

The DOL has not shown that it is likely to succeed in proving that the court erred in issuing the injunction, Mazzant said. He denied the department’s request State of Nevada v. United States Department of Labor, No. 4:16-cv-731 (E.D. Texas, Jan. 3, 2017).

Shortly before the DOL filed its motion, the Texas AFL-CIO moved to join the lawsuit, saying that if President-elect Donald Trump drops the government’s defense of the regulations as predicted, the union will see it through.

“With the recent presidential election, and particularly as more information becomes available regarding the incoming Administration’s plans, policy, and appointments, the Texas AFL-CIO has grave concerns as to whether its interests in the Final Rule will be represented by the DOL,” the union said.

The plaintiffs, however, argued that the union’s speculation about the incoming administration’s views doesn’t justify granting its motion. “AFL-CIO proffers no legal basis warranting intervention now, solely based on speculation or concerns about whether the party that is adequately representing its interests now might change its position at some point in the future,” they said on December 15, urging the court to deny the request.

The court has not ruled on that motion.

About Kate McGovern Tornone:
Kate Tornone is an editor at BLR. She has almost 10 years’ experience covering a variety of employment law topics. Before coming to BLR, she served as editor of Thompson Information Services’ ADA and FLSA publications, coauthored the Guide to the ADA Amendments Act, and published several special reports. She graduated from The Catholic University of America in Washington, D.C., with a bachelor of arts in media studies. Kate can be reached at ktornone@blr.com.
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