COMP NEWS – The Department of Labor’s long-awaited overtime ruling, which specifies precise guidelines, is moving forward despite potential legal challenges following the Supreme Court’s bombshell dismantling of the Chevron Doctrine.

Two federal court rulings in Texas within the past week diverged on the question of whether to block enforcement of the U.S. Department of Labor’s overtime rule, with one judge on Monday denying a request for stay or preliminary injunction of the rule filed by a technology company and another granting an injunction of the rule insofar as it applies to Texas state employees.

 

In the former case, Flint Avenue, LLC v. U.S. Department of Labor, Judge Sam Cummings held that plaintiff Flint Avenue failed to demonstrate irreparable harm resulting from the rule — the first part of which took effect July 1 — that would justify an injunction.

 

However, Cummings also said he would consider the merits of the company’s claims challenging the rule’s other provisions, including DOL’s proposal to again raise the threshold for overtime pay eligibility in January 2025.

 

Jordan’s decision occurred on the same day the U.S. Supreme Court in Loper Bright Enterprises v. Raimondo struck down its Chevron deference doctrine requiring federal courts to defer to agency interpretations of vague statutes. Jordan cited the outcome of Loper Bright in his own decision, stating that his analysis of the overtime rule “carefully follows Loper Bright’s controlling guidance and the APA.”

 

Analyzing the DOL’s implementation of the Fair Labor Standards Act, Jordan wrote that a salary threshold requirement which “effectively displaces” the act’s exemption from overtime pay for executive, administrative and professional, or EAP, employees “flatly contravenes” DOL’s authority.

 

“The application of a salary threshold for the EAP Exemption only comports with the Department’s authority under the FLSA, if at all, to the extent such threshold serves as a plausible proxy for the categories of employees otherwise exempted by the duties test,” he said. “That means a Department-invented test, untethered to the text of the FLSA, that systematically deprives employees of the EAP Exemption when they otherwise meet the FLSA’s duties test, is necessarily unlawful.”

 

Employees must not only perform specific duties in order to qualify for the EAP exemption, known as the “duties test,” but they also must earn pay above the salary threshold set by DOL, known as the “salary basis test.”

To read more about the DOL’s overtime ruling, click here.

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