Late Thursday afternoon (August 31, 2017), a U.S. federal judge officially invalidated the Obama administration’s highly-controversial attempt to expand overtime eligibility for millions for public and private sector employees. In November 2016, U.S. District Judge Amos Mazzant of the Eastern District of Texas made national news when he issued a nationwide preliminary injunction blocking implementation of a proposed rule that was set to take effect on December 1, 2016.
In September 2016, two separate lawsuits were filed in U.S. District Court in the Eastern District of Texas challenging the legality of the U.S. Department of Labor’s (DOL) proposed changes. The lawsuits—one filed by a group of 21 states and the other filed by a conglomerate of over 50 nationwide business groups and trade organizations—both sought to temporarily enjoin and permanently strike the DOL’s Proposed Overtime Rule from taking effect. The federal court later consolidated the two suits into one case.
Judge Mazzant’s November 2016 ruling temporarily prevented the DOL from enforcing the Proposed Overtime Rule, which would have significantly expanded overtime eligibility for millions for public and private sector employees. On Thursday, Judge Mazzant followed his preliminary injunction by granting summary judgment in favor of the plaintiffs.
If enacted, the Proposed Rule would double the minimum salary threshold—from the current $23,660 to the proposed $47,476—required for an employee to qualify for the Fair Labor Standards Act’s (FLSA) white collar exemptions. In his ruling, Judge Mazzant ruled that the “significant increase” contemplated in the Proposed Overtime Rule would essentially render meaningless the duties, functions, or tasks that an employee performs if their salary falls below the new minimum salary level. The Court further agreed with the states and business groups which argued that the DOL had “exceeded its authority and gone too far with the [Proposed Overtime Rule].” According to Judge Mazzant, the Obama-era DOL proposal made overtime status “predominately dependent on a minimum salary level, thereby supplanting an analysis of an employee’s job duties.”
Representatives of the states and business groups who initiated the legal challenge, as well as those from the now Trump-era DOL, have yet to comment. However, given the Trump administrations’ recent statements favoring an overhaul of the FLSA’s exemption analysis, the Court’s ruling on Thursday likely spelled the final chapter in the life of the much-maligned Proposed Overtime Rule.