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Employers are in ‘wait and see’ mode until court rules on appeal of order blocking overtime rule
The Department of Labor's (DOL's) Dec. 2 arguments for expedited review of its appeal of
an order blocking implementation of the
overtime rule "are not slam dunks," according to Robert Boonin, an attorney with Dykema in Detroit.
Even if an expedited hearing is granted, the appeal won't be decided until early March at the soonest, predicted Brett Coburn, an attorney with Alston & Bird in Atlanta. However, he said, the district court judge in the meantime might rule on the business groups' motion for summary judgment. (In addition to 21 states challenging the overtime rule, the U.S. Chamber of Commerce and other business groups sued the DOL to block the overtime rule;
their cases were consolidated in October.)
[SHRM members-only toolkit:
Determining Overtime Eligibility in the United States]
For more overtime compliance news, tips and tools, check out the SHRM resources provided below:
Moreover, the Trump administration's DOL
might withdraw the appeal once it takes office, noted Eric Magnus, an attorney with Jackson Lewis in Atlanta. "The briefing schedule they have requested effectively gives President Trump and his DOL appointee a veto power over the 5th Circuit because the appeal can be withdrawn prior to resolution." The DOL has requested briefing dates that straddle Inauguration Day (Jan. 20, 2017).
Trump's inauguration would be sandwiched between the proposed brief dates, noted Brett Bartlett, an attorney with Seyfarth Shaw. This might make it more difficult for the Trump administration to withdraw an appeal, as it would be likely to receive a flurry of media attention, he said.
However, Boonin said, if the court grants the motion for expedited hearing—"and that's a big 'if' "—the court would likely adopt its own schedule.
Arguments for Expedited Hearing
In the DOL's motion for expedited review, it argued that a salary-level test has existed for 75 years, so the right to have a salary-level requirement is established. And it maintained that the 5th Circuit previously decided in
Wirtz v. Mississippi Publishers Corp., 364 F.2d 603 (5th Cir. 1966), that the DOL has the right to set a salary level for exempt status.
Boonin didn't find these arguments persuasive. "Courts don't normally hold Congress to a standard that its perceived acquiescence over time means that it indeed has acquiesced," said Boonin, immediate past chair of the Wage & Hour Defense Institute, a network of wage and hour attorneys. "Rather, the courts understand that there are many reasons for why Congress may not step in to undo an overreach by the government."
He said that
Wirtz "hardly discusses the legal issues at stake in this case, that being if there's a right to set a salary level and [if] the magnitude of the increase in the new rule is, in and of itself, improper. To date, no court has really focused hard on these issues."
Magnus said that the DOL's argument that it should get expedited review since there was an expedited hearing of the motion for preliminary injunction "was not that compelling." Requests for injunctions typically are heard faster than other motions, he explained.
"It's anyone's guess as to the outcome, particularly in light of the intervening change in administrations and no word as to how the Trump administration and a new secretary of Labor will decide how to address this matter," Boonin said. "For those reasons, most employers should wait and keep their fingers on the pause button.
Keep your plans to comply on hold while the case is pending "in case you need to implement them," Magnus said. "In the meantime, track [affected employees'] hours of work in case back overtime needs to be paid."
Carol Barnett, an attorney with Polsinelli in St. Joseph, Mo., said that for now employers don't have to comply with the overtime rule. But she added, "It remains to be seen whether the appeal will proceed, whether it will be expedited and whether the new administration will continue to press forward."
"Employers should call upon the Trump Labor Department to revisit the salary level and initiate a new rulemaking that will result in a more reasonable and fair salary level that complements the duties test in differentiating between exempt and nonexempt employees," said Alfred Robinson Jr., an attorney with Ogletree Deakins in Washington, D.C., and former acting administrator of the Wage and Hour Division.
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