Justice Department Asks Court to Halt Proceedings in Overtime Case

Additionally, Texas AFL-CIO seeks to intervene

Allen Smith, J.D. By Allen Smith, J.D. December 15, 2016
Justice Department Asks Court to Halt Proceedings in Overtime Case

The U.S. Department of Justice (DOJ) asked a district court on Dec. 12 to suspend further action in a case challenging the overtime rule until a federal appeals court decides the Department of Labor's (DOL's) appeal of a preliminary blocking of the rule.

In another wrinkle, the Texas AFL-CIO moved on Dec. 9 to intervene in the case, a motion that, if granted, could keep the litigation alive even if the Trump administration withdraws the DOL's appeal.

Summary Judgment Motion

The district court granted a preliminary injunction on Nov. 22, barring implementation of the overtime rule. The rule was challenged for more than doubling the exempt salary threshold from a salary of $23,660 a year to $47,476 annually.

The DOL appealed the preliminary injunction and the 5th U.S. Circuit Court of Appeals granted expedited review of its appeal on Dec. 8. Meanwhile, the plaintiffs—21 states and business groups, led by the U.S. Chamber of Commerce—asked the district court for summary judgment in their favor, a motion that the federal government is seeking to block.

FLSA overtime rule resources
FLSA Overtime Rule Compliance

For more overtime compliance news, tips and tools, check out the SHRM resources provided below:

· FLSA Overtime Rule Resources Guide
· Overtime Rule Blocked: Now What?
· Compliance Checklist · Infographic

The preliminary injunction is more prone to attack than a granted summary judgment motion might be, said Brett Coburn, an attorney with Alston & Bird in Atlanta. In the opinion granting the preliminary injunction, U.S. District Court for the Eastern District of Texas Judge Amos Mazzant said that the Department of Labor did not have the right to set an exempt salary threshold for the executive, administrative and professional exemptions. His opinion goes against seven decades of established law. "The legal analysis of the district court opinion is surprising," said Steven Suflas, an attorney with Ballard Spahr in Denver and Cherry Hill, N.J.

In an order granting summary judgment, Mazzant might take a more-nuanced approach less likely to be reversed, Coburn said. For example, Mazzant might say that the overtime rule unlawfully overshadowed the duties test, Coburn noted.

[SHRM members-only toolkit: Determining Overtime Eligibility in the United States]

A granted summary judgment motion also might slow down proceedings at the 5th Circuit level, which the current DOL might not want since the Trump administration could withdraw the department's appeal.

The motion to suspend further district court action stated that this would be the most efficient use of judicial resources, said Carol Barnett, an attorney with Polsinelli in St. Joseph, Mo. If the motion is granted, the DOJ would "be able to concentrate its efforts on the briefing before the court of appeals, rather than possibly have its resources spread more thinly between two different levels of the court system in this particular case," she noted.

Given what the court wrote in its preliminary injunction order, the DOJ likely believes there is a risk that the district court will grant the plaintiffs' motion for summary judgment, according to Brett Bartlett, an attorney with Seyfarth Shaw in Atlanta. "If it were to do so before the 5th [U.S.] Circuit Court of Appeals rules on the government's appeal of the preliminary injunction, then things would get even more complicated than they already are." The plaintiffs would argue that an order granting them summary judgment would make the appeal of the preliminary injunction irrelevant. An appeal of the summary judgment order likely would follow.

Texas AFL-CIO's Motion to Intervene

"The appeal may become a different animal once a new administration begins calling the shots after Jan. 20," Bartlett said.

In addition to the DOJ's motion to put the case in a holding pattern at the district court level, the Texas AFL-CIO asked to be allowed to intervene in the action as a defendant. In its motion, the organization expressed concern that the Trump administration might not defend the overtime rule and said it therefore would like to intervene.

It seems a stretch that the Texas AFL-CIO would be allowed to be a defendant when the true defendant has to be the federal government, Coburn said.

And Eric Magnus, an attorney with Jackson Lewis in Atlanta, said he didn't find the union's motion to intervene meaningful, saying, "I am not entirely sure there is even any procedural basis for it."

It's "really unclear still what the likely outcome of the litigation will be," said Douglas Diaz, an attorney with Archer in Haddonfield, N.J. "It is up to the 5th Circuit now, but once Trump takes office, the DOL could just drop the appeal and this becomes a moot issue."

On the other hand, if the Texas AFL-CIO's motion to intervene is granted, the AFL-CIO as an intervener could pursue the legality of the regulations before the courts even if the Trump administration decides not to defend the overtime rule, said Glenn Grindlinger at Fox Rothschild in New York City.

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