Federal Court Lowers the Boom on DOL’s Higher Salary Regulation

November 23, 2016

By Erica Parks

It has been a rough few weeks for the Department of Labor (“DOL”) in Texas federal court. Yesterday in Sherman, Texas, U.S. District Judge Amos Mazzant granted a nationwide preliminary injunction temporarily blocking the DOL’s new overtime regulations, which were scheduled to take effect on December 1, 2016. As we alerted you last month, those regulations would, among other things, nearly double the salary basis required to qualify for any of the “white collar” exemptions from federal overtime laws. Opponents of the rule have argued that it oversteps the authority granted to the DOL by Congress.

Judge Mazzant’s ruling comes on the heels of another ruling out of Texas that was adverse to the DOL. On November 16th, in an order granting summary judgment in favor of the National Federation of Independent Business, U.S. District Judge Samuel R. Cummings declared the DOL’s final “persuader rule” unlawful. As we alerted you in June, the new rule would, among other things, extend employers’ reporting obligations under the Labor-Management and Disclosure Act of 1959 to “indirect persuader activities” engaged in by attorneys, and narrow the advice exception to potentially require disclosure of attorney-client privileged communications. Judge Cummings’ summary judgment order follows a preliminary injunction issued in June of this year. The preliminary injunction, which the DOL had appealed before the Fifth Circuit, temporarily blocked the rule just days before it was supposed to take effect. As part of the summary judgment order, Judge Cummings wrote that his “preliminary injunction preventing the implementation of the rule should be converted into a permanent injunction with nationwide effect.”

Thus, for the time being, neither of these controversial regulations will go into effect. In any event, regardless of the outcome of these proceedings, we may well see changes to these and other labor and employment regulations under the new administration.

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