Trump Administration Extension Request Clouds Overtime Litigation

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By Ben Penn

The Justice Department’s request for 60 additional days to determine its position on the overtime rule appeal adds to the mix of moving parts in an already complicated case.

The stated purpose for the government’s unopposed motion for an extension to file a reply brief to a federal appeals court was to “allow incoming leadership personnel adequate time to consider the issues” ( Nevada v. DOL , 5th Cir., No. 16-41606, motion for extension to file reply brief 2/17/17 ). The U.S. Court of Appeals for the Fifth Circuit is expected to grant the extension, which would allow time both for a labor secretary to be confirmed and for the lower court’s temporary freeze of the rule to potentially become permanent.

Sixty additional days would give the DOJ until May 1 to coordinate with the Labor Department and determine whether to change the administration’s stance on one of the Obama DOL’s top regulatory priorities. A federal judge in Texas issued a temporary injunction Nov. 22, just before the rule would have made an estimated 4 million workers newly eligible for time-and-a-half pay ( Nevada v. DOL , E.D. Tex., No. 4:16-cv-00731, motion granted 11/22/16 ). The DOJ appealed the ruling before President Barack Obama’s term was up, leaving major questions as to how Trump-appointed attorneys would prioritize the regulation.

Alexander Acosta was named as the new labor secretary nominee Feb. 16, and it’s uncertain if May 1 would allow time for the Senate to confirm him.

The same judge in Texas, Amos Mazzant, is mulling business groups’ motion for summary judgment to permanently invalidate the rule. Mazzant is also considering the Texas AFL-CIO’s motion to intervene in the case. A 60-day extension at the appellate level would boost the chances that the DOJ will have clarity on the AFL-CIO’s intervenor status and on the summary judgment motion before the government makes its next move.

If summary judgment is granted, “it could potentially make the appeal moot,” Jeffrey Brecher, a principal at Jackson Lewis PC on Long Island who heads the management firm’s national wage-and-hour practice group, told Bloomberg BNA Feb. 21, “because if the judge issues a permanent injunction, that could potentially supplant the earlier order.”

However, if Mazzant simultaneously permits the Texas AFL-CIO to intervene, the union would appeal the injunction, still leaving the status of the case in limbo for the DOJ. The AFL-CIO could also appeal if its request to intervene is denied, leaving the case’s future further in doubt.

The DOL regulation would double the annual salary level to $47,476 below which employees qualify for overtime pay when working more than 40 hours in a week. Some employers, facing a Dec. 1 enforcement date, began complying early and continued to do so even after the Nov. 22 injunction.

Would Extension Test Mazzant’s Patience?

The Texas judge granted a request from 21 Republican state attorneys general to preliminarily halt the regulation. He argued the department should look more closely at the duties that employees actually perform to see if they qualify as “executive, administrative, or professional” workers exempted from overtime requirements.

Mazzant Jan. 3 declined the DOL’s request to put the case on hold, pending the Fifth Circuit’s review of the temporary injunction.

It’s unclear when Mazzant will rule on the two pending motions in the case or if he’d act before a new May 1 briefing deadline, assuming the Fifth Circuit grants it. However, for the Trump administration, the possibility that Mazzant does rule before May 1 may serve as an “ancillary benefit potentially derived from the extension,” Brett Bartlett, co-chairman of Seyfarth Shaw LLP’s national wage-and-hour litigation practice group, told Bloomberg BNA in a Feb. 21 e-mail.

But the potential for a summary judgment ruling to impact the DOJ’s appeal is also an open question.

“The theory on which the state plaintiffs got the preliminary injunction is slightly different from the theory in which the business plaintiffs are seeking a summary judgment motion,” Sachin Pandya, an employment law professor at University of Connecticut law school, told Bloomberg BNA Feb. 21. “It is certainly possible for the district court to rule on the summary judgment motion and on the motion to intervene without necessarily touching on the issues that are before the Fifth Circuit.”

“But it all sort of depends on who moves first and how quickly the district judge is moving to decide those motions,” added Pandya, who was the counsel of record in an amicus brief filed by law professors in support of the overtime rule's legality.

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

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Christopher Opfer at copfer@bna.com

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