Federal Judge Halts Overtime Rule Changes

On May 18, 2016, I wrote the following blog entry on a series of changes to the Fair Labor Standards Act’s governing regulations that were scheduled to take place on December 1, 2016: http://andrewgjoneslaw.com/agjlaw/unpaid-wages/department-of-labor-announces-changes-to-overtime-rules. For now, and perhaps forever, those changes are in doubt.

Less than two (2) weeks before those changes were scheduled to go into effect, a federal judge in the United States District Court for the Eastern District of Texas issued a preliminary injunction halting implementation of the new regulatory rules.  You can read more about that ruling here: https://sports.yahoo.com/news/texas-judge-delays-federal-overtime-011803474.html. The basis for the ruling is fairly technical, even for attorneys who practice in this field.  My best effort at summarizing it would be to say that the federal judge ruled that Congress, not the Department of Labor, was the entity with the exclusive authority to modify the FLSA in this manner. 

On one hand, this is an entirely logical conclusion premised upon the balance of powers between the branches of government; the Department of Labor is part of the executive branch and laws are not made by that branch but rather by the legislative branch.  On the other hand, the Department of Labor would likely point out that it is merely changing how the FLSA is implemented and it has been making similar regulatory changes with respect to the FLSA for sixty-five (65) or so years.  If the DOL lacks the authority to do so, it could cast doubt upon decades of FLSA jurisprudence, not to mention all of the other laws where federal government agencies regularly implement regulatory changes to laws over which they preside (i.e. the DOL and the FMLA, the EEOC and Title VII, etc.). 

So what does this mean for employers and employees potentially affected by the new regulations?  That’s a question without any clear answers.  For now, many (but not all) employers have elected to hold off on implementing the new regulations in favor of maintaining the status quo.  The United States Court of Appeals for the Fifth Circuit has granted an expedited appeal with briefing expected to finish by the end of January 2017 and oral arguments to follow during the first week of February 2017. 

So that means we could get a quick resolution of this case, right?  I doubt it.  First, we will have a new President before the Fifth Circuit hears and decides the case.  It is possible that the new administration will withdraw the appeal and allow the District Court’s injunction to stand or take a contrary position from that currently being argued by the federal government.  Second, even if the Fifth Circuit were to overturn the District Court’s ruling, an appeal to the United States Supreme Court would likely follow.  Assuming certiorari would be granted which I think is a fairly safe assumption, the case would be heard by what most people expect to be a Court with a newly confirmed conservative justice who could very well cast the swing vote against the new regulations.  For now, employers and employees potentially affected by the DOL’s changes are in limbo waiting to see how this will all shake out but it says here that the new regulatory rules are unlikely to take effect.