States File Emergency Motion to Stop Overtime Rule

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By Ben Penn

Oct. 13 — A group of states filed an emergency motion asking a federal judge to halt the Labor Department’s overtime rule before it takes effect Dec. 1 ( Nevada v. U.S. Dept. of Labor , E.D. Tex., No. 4:16-cv-00731, motion filed 10/13/16 ).

The 21 plaintiff states, led by Nevada and Texas, argued that the U.S. District Court for the Eastern District of Texas should issue a nationwide injunction to prevent implementation of the rule, which will expand overtime eligibility to an estimated 4.2 million workers.

The litigation’s odds of succeeding are considered remote by some observers, but it may be the only chance for opponents to prevent the rule from taking effect. Several bills pending before Congress that would either block or delay the overtime rule all face a veto threat.

The states argue the DOL exceeded its authority in rolling out the new rule by focusing on the salary a worker makes, instead of the duties performed, to determine overtime eligibility. They also challenge a provision that adjusts for inflation the salary threshold every three years.

The DOL previously criticized this lawsuit and another challenge filed by the U.S. Chamber of Commerce for being politically motivated. Among the 21 states to sign on, 20 have a Republican governor.

The regulation doubles the annual salary threshold—from $23,660 to $47,476—below which workers are eligible for time-and-a-half pay when exceeding 40 hours of work in a week.

Businesses have called the new salary level too high and said that it takes effect too soon. They warned that it would limit career advancement for midlevel employees and would be particularly costly for businesses in poorer regions.

States Warn of ‘Irreparable Harm.'

“Absent an injunction, the Plaintiff States will suffer irreparable constitutional harm as well as crippling, irreversible budgetary injury before the Court can issue a decision on the merits,” the plaintiffs said in their motion. “Accordingly, it is appropriate to enjoin the DOL from implementing the new overtime rule pending this challenge.”

The plaintiffs, in requesting that the court enjoin the regulation, contended that the rule violates states’ constitutional rights under the 10th Amendment and that the DOL exceeded authority under the Administrative Procedure Act.

The case is assigned to Judge Amos Mazzant, who was nominated by President Barack Obama in 2014. Mazzant is the only one of the three judges serving in the Eastern District’s Sherman division to be nominated by a Democratic president.

To contact the reporter on this story: Ben Penn in Washington at bpenn@bna.com

To contact the editor responsible for this story: Peggy Aulino at maulino@bna.com

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