Correction: An earlier version of this story's headline incorrectly indicated that the suit involved multiple workers. It is only a putative collective action at this time. We regret the error.
Dive Brief:
- The Texas federal judge who enjoined the Obama administration's Fair Labor Standards Act (FLSA) overtime rule has ordered a Chipotle employee to withdraw a lawsuit alleging that his order didn't apply nationwide and that employers who didn't comply are therefore now in violation of the rule.
- The suit, initially filed in New Jersey, was sent to Texas for Judge Amos Mazzant's review. He not only told the employee to withdraw the suit but also held the worker's attorneys in contempt, saying they “recklessly disregarded a duty owed to the Court—the long-standing and elementary duty to obey its orders, including a nationwide injunction” and that “such disobedience mandates coercive action to ensure compliance with the Court’s Order.” Despite senior attorneys' protest, Mazzant also held junior attorneys associated with the case in contempt. “After three years of law school and eight to thirty-five years of practice, a lawyer should know that signing his or her name to a document has consequences," Mazzant said. He also ordered that Chipotle be compensated for the funds it spent in pursuit of the contempt order.
- At the attorneys' request, Mazzant has now stayed his order, but made clear that he "is currently presiding over a three-week-long civil trial of considerable complexity," which is preventing him from fully considering their motion.
Dive Insight:
The Chipotle suit was one of several questions that remained regarding the overtime rule's death. And while these most recent orders from Mazzant still may be appealed, it seems likely that a different appeal addressing the injunction may soon be the only unresolved item around the Obama-era rule.
The U.S. Department of Labor says it wants to replace the enjoined rule, but that paused appeal means employers aren't out of the woods just yet with respect to the proposed $47,476 threshold.
If the agency can get a proposal out this fall as planned, it's possible employers could see an increase (albeit significantly lower than $47,476) in the FLSA's salary threshold in the next few years. Experts, however, say there's little chance it will come that soon.