Just over a week before the new overtime rules were set to take effect, a federal judge in Texas issued a nationwide preliminary injunction suspending their implementation. The State of Nevada and twenty other states submitted an emergency motion for preliminary injunction as part of a lawsuit (State of Nevada, et al, v. United States Department of Labor, et.al ) seeking to invalidate the new overtime rules.
To obtain a preliminary injunction a party must establish 1) a substantial likelihood of success on the merits; 2) a substantial threat that the party will suffer irreparable harm if the injunction is not granted; 3) that the threatened injury outweighs any damage that the injunction might cause the defendant; and 4) that the injunction will not disserve the public interest.
Among the arguments made by the states are 1) that the Final Rule violates the Constitution by coercing the States to adopt wage policy choices that adversely affect their priorities, budgets, and services; and 2) that the Fair Labor Standards Act authorizes the Department of Labor to define and delimit the duties test for the white collar exemption, not dictate a minimum salary level. It may be significant that the Department of Labor changed the salary test without making any changes to the duties test. The Court found that both of these arguments and evidence that the harm the states would suffer under the new rule, including substantial negative impact on public services, were sufficient to form the basis for a preliminary injunction. The Department of Labor filed a Notice of Appeal on December 1.
The preliminary injunction does not mean that the Court will strike down the new overtime rules. We advise you to develop a plan to comply with the new rules if and when they are allowed to take effect.