Movement on overtime rules unlikely before Trump takes office

The U.S. Department of Labor (DOL) has requested that an appeals court fast-track its appeal of an injunction blocking the new overtime regulations. But even if the court agrees to the DOL’s proposed expedited schedule, it wouldn’t take action on the injunction until at least February, weeks after President-elect Donald Trump takes office.

The department filed an appeal with the U.S. 5th Circuit Court of Appeals on December 1. It argued that a federal district court judge’s injunction halting the rules “rests on an error of law and should be reversed.” The judge called into question the DOL’s authority to establish a salary basis test for overtime eligibility under the Fair Labor Standards Act (FLSA). In its appeal, the DOL argues that the 5th Circuit has already sanctioned the test in previous opinions.

In addition to asking the appeals court to review the injunction, the DOL filed a motion for expedited briefing and oral argument. “Expedition is clearly warranted in this case,” it said, asking the court to rule on that request by December 8. If the court grants the request for a quick review, the DOL has proposed a schedule that would have briefing completed on February 7, 2017.

That means that even if the court grants the DOL’s motion, it likely wouldn’t reach a decision on the injunction until weeks after Trump has taken office.

“Meanwhile, in less than 60 days, there will be new leaders over the DOL, and they may not be interested in pursuing the issue,” said Kara Shea, an editor of Tennessee Employment Law Letter and the practice group leader of Butler Snow’s labor and employment group. “In fact, before the Texas court’s decision came into play, there was already much speculation that the Trump administration and/or the Republican Congress would take steps to repeal or amend the rules in 2017.”

It’s also important to note that the district court still has jurisdiction and could make the injunction permanent. “The judge’s ruling is temporary, but given the tone of the ruling, it seems very likely that he will make it permanent soon,” Shea said.

The states and business groups, however, still hope to win summary judgment (dismissal without a trial) at the district court level. The two lawsuits were consolidated, but a summary judgment motion from the business groups’ suit is still outstanding. State of Nevada v. U.S. Department of Labor, No. 16-41606 (5th Cir., Dec. 1, 2016).

Bottom line

“So no one knows what will happen next, but based on the timing of the ruling and the election results, it’s quite possible the new regulations will never go into effect,” Shea said. “But they might. Stay vigilant, and for now, be prepared to implement your compliance plan quickly just in case.”

Need to learn more? Join us December 14 for the live webinar The Trump Presidency: What Will Survive—and What Won’t—from the Obama Regulatory Agenda. In addition to this injunction stopping the overtime rule,  a number of regulations are scheduled to go into effect in the next couple of months, so it’s very important for employers to know what they should expect to be enforced under President Trump.  During this in-depth webinar, featuring live Q&A, Washington insiders David Fortney and Nita Beecher of Fortney Scott will explain how employers can manage their regulatory requirements amid the transfer of presidential power. For more information, click here.