Dive Brief:
- The U.S. Department of Labor has appealed a Texas federal judge’s 2024 decision blocking its Biden-era final rule which sought to expand overtime pay protections under the Fair Labor Standards Act, according to a Friday court filing.
- Last December, Judge Sam Cummings of the U.S. District Court for the Northern District of Texas ruled against DOL in Flint Avenue, LLC v. U.S. Department of Labor, vacating and setting aside the final rule. Cummings’ decision came just over one month after another Texas judge similarly vacated and set aside the rule in a separate lawsuit filed by the state of Texas and parties including the Plano Chamber of Commerce.
- The appeal takes Flint Avenue to the 5th U.S. Circuit Court of Appeals, the same court in which DOL filed an appeal of the decision in the State of Texas case last year. DOL’s public affairs staff did not immediately respond to a request for comment. The U.S. Department of Justice, which represents the DOL, did not respond to a request for comment submitted via its online form.
Dive Insight:
Friday’s notice of appeal may come as a surprise to employers who expected the Trump administration to abandon the final rule; attorneys who previously spoke to HR Dive said that the rule was effectively “dead” despite DOL’s State of Texas appeal because of the Trump administration’s conservative policy stance on overtime.
In fact, the new administration had already filed motions in the 5th Circuit pertinent to overtime rule litigation. On Jan. 22, two days after President Donald Trump’s inauguration, DOJ attorneys sent a letter to the 5th Circuit requesting a 30-day extension on the deadline set by the court to file an opening brief in the State of Texas appeal. The court granted the request and the agency’s filing deadline is currently set to March 7.
The April 2024 final rule proposed a two-step process that would have eventually raised the minimum annual salary threshold for overtime pay eligibility under the FLSA from $35,568 to $58,656 by Jan. 1, 2025. The rule would then have implemented a mechanism for automatically adjusting the threshold every three years using current wage data beginning in July 2027.
But a series of Texas court decisions froze the rule. The judge in State of Texas held that the rule exceeded DOL’s authority and was unlawful. Likewise, Cummings said in his decision that he found the State of Texas judge’s reasoning “persuasive,” and he adopted the same reasoning in ruling for the plaintiffs.
There is some intrigue in how the 5th Circuit might rule on the two appealed judgments given that the court signed off on DOL’s overall use of a salary basis test for determining overtime pay eligibility in last year’s Mayfield v. U.S. Department of Labor. The Mayfield plaintiffs alleged that the salary basis test had no basis in the FLSA’s text, but the 5th Circuit disagreed. The court did hold, however, that DOL “cannot enact rules that replace or swallow the meaning” of the FLSA’s text, adding that particular salary threshold may raise legal issues because of their size.
