Labor Department to Appeal Judgment Against Obama-Era Overtime Rule

Labor Department to Appeal Judgment Against Obama-Era Overtime Rule

The US Labor Department will appeal a ruling handed down by a federal judge in Texas earlier this year, striking down the controversial new overtime rule put in place by the previous administration, the Washington Examiner reports:

The department will ask that the district court’s August ruling by stayed while it establishes a new overtime rule. The Trump administration is still expected to significantly scale back the rule.

Labor Secretary Alexander Acosta has repeatedly said that the Obama administration went too far when it expanded the rule, which extended overtime eligibility to an estimated 4 million more workers, but also that the rule itself was nevertheless in need of updating. He has suggested that a more moderate expansion would be appropriate.

A drawn-out court process could extend the duration of the uncertainty employers are currently facing as to the future of this regulation. Labor Secretary Alexander Acosta, appointed by President Donald Trump in March, has indeed been a critic of the Obama administration’s rule, which would have more than doubled the overtime salary threshold from $23,660 to $47,476. Before the judgment handed down in August, the Trump Administration signaled that it planned to rewrite the rule and Acosta’s department began the process of doing so with a solicitation of public comments in July.

So why is Acosta appealing on behalf of a rule he disagrees with and is planning to change? Most likely, he is hoping to avoid having his own rewrite of the rule subjected to the same constitutional challenges as the Obama administration’s version. As one employment attorney tells Allen Smith at SHRM, the ruling by the Texas judge, Amos Mazzant, could be construed as restricting Acosta’s own ability to create a (much lower) salary threshold through his department’s rule-making power—which is why Acosta would want it thrown out:

“Even the new administration has to be concerned about Mazzant’s reasoning that the statute does not permit a salary-level test at all,” said Steven Suflas, an attorney with Ballard Spahr in Cherry Hill, N.J., and Denver. … In the August decision, Mazzant backed away from saying the statute does not permit a salary-level test, Suflas said, but he added that the judge was “not very convincing” in doing so.

Maury Baskin, an attorney with Littler in Washington, D.C., who is representing the Chamber of Commerce in the litigation, disagreed. Baskin said that Mazzant’s final order “could not have been clearer in finding the DOL has the authority to use pay levels as a factor to determine exempt status; just not such high levels as to be inconsistent with legislative intent. So long as the court grants DOL’s motion to hold the case in abeyance pending the new rulemaking, the appeal should have no impact on employers.”