Update on proposed new overtime rules
Just before Thanksgiving, as businesses were gearing up to implement the burdensome new overtime rules by the Department of Labor, Judge Amos Mazzant of the Eastern District Court of Texas issued a preliminary injunction effectively postponing the start date, which was set to take effect on Dec. 1.
One of the most important items of this ruling should be that it is preliminary — also known as temporary. Law firms across the country have received questions regarding this ruling and how businesses should plan to move forward. Most importantly, many have inquired whether the injunction will last into the next administration. Right now, that is not entirely clear, and legal experts and the Partnership to Protect Workplace Opportunity (PPWO), of which the American Supply Association is a member, are working to get as much clarity as possible.
The issue of the timing of an appeal is of note because should the Fifth Circuit overturn the injunction, it would be most advantageous for small businesses impacted by this rule that it occurs after President-elect Trump is sworn in so his administration would have time to act to block or delay the rule.
The DOL has a right to immediately appeal the preliminary injunction to the U.S. Court of Appeals for the Fifth Circuit. Many suspect DOL will exercise that right. One of the attorneys close to the suit said that while “it is theoretically possible” the Fifth Circuit could rule “in advance of the inauguration… there are many reasons why that is unlikely.” That said, another attorney noted “there was a significant abortion decision in the Fifth Circuit (where a federal district court in Louisiana) granted an injunction on Jan. 26, 2016. Defendants moved to stay the injunction in the Fifth Circuit and it granted that stay on Feb. 24, 2016 — 29 days later.”
In short, the best answer that lawyers can provide given the uniqueness of this situation is that the injunction could be overturned before Jan. 20, 2017, but DOL and the Fifth Circuit would need to move very quickly for that to happen.
In addition, it’s important to remember that if the injunction were overturned prior to Trump taking office, there would need to be a number of legal steps to withdraw the rule. Trump’s swearing in and support of the businesses impacted by this rule is not enough to undo the damage that could be done.