Labor Department Files Brief Over Delay of Overtime Rule

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By Christine Pulfrey

The preliminary injunction imposed by a Texas federal district court, preventing the Labor Department’s new overtime rule from taking effect, rests on an error of law and should be reversed, the department said in a brief filed Dec. 15 with a federal appeals court.

The department, in challenging the district court’s claim that the Fair Labor Standards Act does not allow the use of a salary test for the white-collar overtime exemption, said that the U.S. Court of Appeals for the Fifth Circuit has “expressly upheld the department’s authority to use a salary test” and that “every circuit to consider the question has upheld the department’s salary-level test.”

The district court also did not identify a plausible basis to overturn the final rule’s salary level, which was in keeping with salary levels adopted over the past 75 years, the department said in the brief ( Nevada v. DOL, 5th Cir., No. 16-41606, appellant’s brief filed 12/15/16 ).

In challenging the preliminary injunction, which was issued Nov. 22, the department focused on the harm caused by the delay in bringing the lawsuit, the injunction’s overly broad application and the uncertainty sustained by those affected. The new rule was to have taken effect Dec. 1.

The injunction is “particularly unwarranted” because it took nearly five of the six months since the rule’s publication to its scheduled effective date for the 21 states to bring the lawsuit, the department said.

The district court also erred in issuing a nationwide injunction affecting third-party employers that were not party to the lawsuit and that did not seek the injunction, the department said. The 21 states that brought the lawsuit failed to demonstrate irreparable harm, which is a prerequisite to a preliminary injunction, the department said.

Millions of workers would gain FLSA overtime protection under the final rule, but many such workers work overtime only occasionally, if at all, so the final rule’s effect on employers’ compliance costs, a basis for the injunction, should be relatively low, the department said.

The department also reiterated its broad authority to define and limit the scope of the exemption.

An expedited hearing of the request to remove the injunction was granted Dec. 8 by the appeals court. All briefs in the case are to be filed with the court by Jan. 31 and oral arguments are to occur soon after. The court is to rule on the appeal after oral arguments are heard.

To contact the reporter on this story: Christine Pulfrey in Washington at cpulfrey@bna.commtrimarchi@bna.com. To contact the editor responsible for this story: Michael Trimarchi at mtrimarchi@bna.com.

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