In a surprising development, a federal judge in Texas granted an emergency injunction late Tuesday afternoon blocking the implementation of a new overtime rule that would have given more white-collar workers overtime.
Judge Amos L. Mazzant from the Federal District Court for the Eastern District of Texas held a hearing November 16 to decide whether to issue a preliminary injunction delaying the December 1, 2016, effective date for the new Department of Labor regulations. Many observers believed that Mazzant, a recent appointee by President Barack Obama, would not issue the injunction in the Nevada v. U.S. Department of Labor case. However, it has been widely noted that the U.S. District Court in East Texas has been very plaintiff friendly.
“Due to the approaching effective date of the Final Rule, the court’s ability to render a meaningful decision on the merits is in jeopardy. A preliminary injunction preserves the status quo while the court determines the department’s authority to make the Final Rule, as well as the Final Rule’s validity,” Mazzant wrote in his 20-page order.
The rule, issued by the Department of Labor, was to take effect December 1 and would have doubled, to $47,500, the maximum salary a worker can earn and still be eligible for mandatory overtime pay.
“While this does not kill the DOL regulation, it is definitely on life support,” said T. Scott Gilligan, general counsel for the National Funeral Directors Association. “Given the strength of the judge’s ruling, it is very unlikely that he will later change his mind and uphold the regulation. Moreover, when his decision is appealed, it goes to the 5th Circuit Court of Appeals, which is very conservative and is unlikely to overturn Mazzant’s decision.” The 5th U.S. Circuit Court of Appeals in New Orleans blocked Obama’s executive actions on immigration in 2015.
Gilligan said that another factor that will come into play is the change of administrations that takes place at the end of January. “It is likely that the Justice Department under Trump may simply drop the appeal and allow the judge’s ruling to stand, which would kill the regulation.”
Some 21 states and more than 50 business groups filed suit to block implementation of the rule, alleging that it would cause significant financial harm. “With the Final Rule, the department exceeds its delegated authority and ignores Congress’ intent by raising the minimum salary level such that it supplants the duties test. The department’s role is to carry out Congress’ intent. If Congress intended the salary requirement to supplant the duties test, then Congress and not the department should make that change,” Mazzant said in his ruling.
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