Earlier today, the U.S. Department of Labor filed a reply brief in further support of its appeal of the November 22, 2016 order in State of Nevada v. United States Dep’t of Labor, No. 4:16-CV-00731 (E.D. Tex.). That order, issued by federal district judge Judge Amos L. Mazzant, enjoined the DOL’s 2016 overtime rule on a nationwide basis. The new rule–revising 29 C.F.R. Part 541, which “defines and delimits” the overtime exemptions for executive, administrative, and professional employees–was scheduled to take effect on December 1, 2016.
Last December, the lame-duck DOL filed an appeal with the Fifth Circuit, seeking a lift of the injunction. Many expected the DOL—following the change in administration in Washington in January 2017—to withdraw the appeal, allowing the injunction to stand. But one issue with the injunction order is that it appears to be based on the reasoning that DOL has no authority to set any minimum salary for exemption. If this reasoning is to stand, then even the current (i.e., pre-2016) version of the overtime rule would be invalid. As Proskauer noted in comments to The New York Times last November, “The Labor Department has been setting these minimums since 1940 … This [injunction order] is the first time that a district court judge is essentially saying you don’t have the authority to do that.”
Regardless of what happens on the appeal, the version of the overtime rule that was enjoined will not survive. Earlier this week, the DOL began the process of formally considering a new rule, by transmitting a Request for Information (RFI) to the White House’s Office of Management and Budget for review. Once approved by OMB, the RFI–which seeks public comment on a number of issues relating to the so-called “white collar” overtime exemptions–will be published in the Federal Register. Ostensibly, the responses to the RFI will, in time, inform the drafting of proposed revisions to Part 541. Based on comments made by Secretary Acosta during his confirmation hearings and since, it is possible that a new overtime rule will raise the minimum salary for many exemptions to the low $30,000 range–not nearly as drastic or sudden an increase as that proposed by the Obama DOL, which would have set that threshold at $47,476.
The DOL explained its rationale in filing a reply brief, and the relief it seeks from the Fifth Circuit, as follows:
The Department has decided not to advocate for the specific salary level ($913 per week) set in the final rule at this time and intends to undertake further rulemaking to determine what the salary level should be. Accordingly, the Department requests that this Court address only the threshold legal question of the Department’s statutory authority to set a salary level, without addressing the specific salary level set by the 2016 final rule. In light of this litigation contesting the Department’s authority to establish any salary level test, the Department has decided not to proceed immediately with issuance of a notice of proposed rulemaking to address the appropriate salary level. The rulemaking process imposes significant burdens on both the promulgating agency and the public, and the Department is reluctant to issue a proposal predicated on its authority to establish a salary level test while this litigation remains pending. Instead, the Department soon will publish a request for information seeking public input on several questions that will aid in the development of a proposal….. For the foregoing reasons, the Department requests that this Court reverse the judgment of the district court because it was premised on an erroneous legal conclusion, and reaffirm the Department’s statutory authority to establish a salary level test. The Department requests that this Court not address the validity of the specific salary level set by the 2016 final rule ($913 per week), which the Department intends to revisit through new rulemaking.
Stay tuned for further developments on this very interesting issue.