In a Memorandum Opinion and Order
handed down yesterday, the federal district court for the Eastern District of Texas granted an emergency motion for preliminary injunction to put a hold on the December 1, 2016, effective date for the U.S. Labor Department’s Final Rule on overtime pay for salaried employees until the court can rule on the merits of two lawsuits challenging the rule itself. The injunction will remain in place until the court reaches a decision in the case or until the federal government wins a countermanding order from an appeals court. It is expected the DOL will appeal the decision.
Business decision makers must realize the injunction is temporary and does not delay the overtime rule indefinitely. A decision in favor of the Department of Labor could still result in the Final Rule taking effect in the future. MRA encourages its partner restaurants to take any remaining steps necessary to comply with the overtime rule in the event the DOL prevails.
Still, yesterday’s ruling is a positive development. A party seeking a preliminary injunction must establish “a substantial likelihood of succees on the merits” of the underlying lawsuit. U.S. District Judge Amos Mazzant ruled the Plaintiffs had cleared that hurdle, writing in his Order, “nothing in the EAP exemption indicates Congress intended the DOL to define and delimit with respect to a minimum salary level. With the Final Rule, the Department exceeds its authority and ignores Congress’s intent by raising the minimum salary such that it supplants the duties test. Consequently, the Final Rule is unlawful. If Congress intended the salary requirement to supplant the duties test, then Congress, and not the Department, should make that change.”
More information on yesterday’s development is available in a Client Alert
from McMahon Berger, the law firm that staffs the MRA Labor Law Hotline. McMahon Berger
is dedicated to the exclusive representation of management in labor and employment matters.