Trump Faces Choice on Overtime Appeal

By Allen Smith, J.D. Dec 5, 2016
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The Department of Labor (DOL) under President-elect Donald Trump may withdraw the DOL's appeal of a preliminary blocking of the federal overtime rule if there hasn't been a decision on the appeal by Inauguration Day. But there's a slight chance the appeal will be decided before Jan. 20, though every day that goes by without an order on the appeal makes the chance of it "exponentially narrower," said Eric Magnus, an attorney with Jackson Lewis in Atlanta. 

The DOL moved for an emergency hearing on Dec. 2, but courts' dockets move slower this time of year, he added. And it isn't a persuasive argument to say an expedited hearing is needed because presidents are changing, he said.

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

On the other hand, a single judge can grant a motion for expedited hearing. If it wanted to, the 5th Circuit could even hear the case without both sides submitting legal briefs. But the DOL requested a brief schedule that straddles Inauguration Day, making a decision before inauguration unlikely.

Even if a panel of the 5th Circuit reverses the preliminary injunction before inauguration, the state plaintiffs in the case could delay the court's order by filing a petition to be heard by the full circuit—something the plaintiffs would be likely to do since 10 of the 15 judges on the 5th Circuit were appointed by Republican presidents, Magnus noted.

Whether the Trump administration withdraws the DOL's appeal is "a question of timing," agreed Brett Bartlett, an attorney with Seyfarth Shaw in Atlanta. If the court refuses an expedited hearing and briefs are filed after Jan. 20, Trump's DOL is more likely to withdraw the appeal, he predicted, though workers might perceive a withdrawal as pandering to corporate interests.

In the DOL's motion for expedited briefing, it proposed the following scheduling of briefs:

  • Dec. 16—DOL's opening brief.
  • Dec. 23—Friend-of-the-court briefs in support of the DOL.
  • Jan. 17, 2017—The plaintiff states' brief.
  • Jan. 24, 2017—Friend-of-the-court briefs in support of the states.
  • Feb. 7, 2017—The DOL's reply brief. 

Given the requested schedule of the briefs, a 5th CIrcuit decision before Inauguration Day is unlikely.

Trump's Position Uncertain

If a decision is not reached before Jan. 20, the question becomes whether Trump "really is a Republican" who will withdraw a challenge of the court order blocking the rule, Magnus said.

Maybe he figures he was elected because of blue-collar voters and decides not to withdraw the appeal in order to fight to preserve overtime rights, he noted. Then the case eventually is headed to the Supreme Court, he predicted.

However, Carol Barnett, an attorney with Polsinelli in St. Joseph, Mo., thought Trump was more predictable, noting he mentioned on the campaign trail that he opposed the overtime rule's application to small businesses. Trump isn't likely to pursue an appeal originally brought by the Obama administration, she said.

Trump could either withdraw the appeal or simply let the case languish. "If you do not proceed according to [court] deadlines, you may not be able to proceed at all," she said.

Other Ruling Could Be Imminent

In addition to 21 states challenging the overtime rule, the U.S. Chamber of Commerce and other business groups sued over it, and the states' and Chamber's  lawsuits were consolidated. The business group plaintiffs sought summary judgment, a motion that has not been ruled on yet.

[SHRM members-only HR Q&A: What is the difference between California overtime exemption requirements and federal overtime exemption requirements?]

Brett Coburn, an attorney with Alston & Bird in Atlanta, predicted that Judge Amos Mazzant, the same judge who granted the preliminary injunction, might grant the business groups' motion for summary judgment. And that ruling could be soon, Coburn said.

Or Mazzant might choose to wait to see what the 5th Circuit does. Any granting of a motion for summary judgment could be appealed.

More Overtime Rulemaking?

If the preliminary injunction still is in place Jan. 20, the Trump administration might ask the court to consider leaving it in place pending new rulemaking, said Alfred Robinson Jr., an attorney with Ogletree Deakins in Washington, D.C.

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For more information about Donald Trump's workplace policies and how they effect HR professionals, check out the SHRM resources provided below:

· SHRM's post-election coverage
· Trump's work policies · First 100 days

While the district court questioned the DOL's authority to use a salary-level threshold for the white-collar exemptions, Robinson said the court really was taking issue with the department for overreaching on the exempt salary level by more than doubling it from $23,660 to $47,476 a year. Most people agree there needs to be an increase in the exempt salary level, just not too much too fast, he noted. The salary amount should complement the duties test rather than supplant it, he explained.

"The Trump administration DOL could abandon its pursuit of an appeal and instead focus on more modest regulatory changes that allow the administration to maintain its pledge to support American workers while abrogating the drastic changes that were set to take effect," said Jim Swartz, an attorney with Polsinelli in Atlanta.

If there were more rulemaking, the Trump administration might consider nuances overlooked by the Obama administration's overtime rule, such as modified overtime rules for small businesses, nonprofits and rural areas, according to Robert Boonin, an attorney with Dykema in Detroit. And it could consider whether the Fair Labor Standards Act permits any salary-level threshold.

In any event, new rulemaking could be lengthy, Bartlett observed.

As for the status of the appeal, for now employers are "in a holding pattern and will have to keep their eyes on it," Coburn said.

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