Overtime Rule Update: District Court Won’t Wait for Appeals Court Ruling

A federal district court judge said January 3 that he won’t halt proceedings in the case challenging the U.S. Department of Labor’s (DOL) new overtime rules, despite concurrent litigation in the 5th U.S. Circuit Court of Appeals.


The rules, which were scheduled to take effect December 1, 2016, would have required employers to pay overtime to employees earning less than $913 per week (which amounts to $47,476 annually).

Judge Amos L. Mazzant III of the U.S. District Court for the Eastern District of Texas issued a preliminary injunction, temporarily blocking the rules from taking effect as planned. The DOL appealed the order to the 5th Circuit and final briefs are due to that court January 31, 2017.

The DOL also asked the lower court to refrain from any further action until the 5th Circuit issues a ruling on the preliminary injunction, rather than issuing a permanent injunction or ruling on the plaintiffs’ summary judgment motion. “Concurrent proceedings in this Court and the Fifth Circuit on substantially similar claims would be inefficient and contrary to judicial economy,” the DOL said.

In reply, the plaintiffs argued that if the lower court ruled on the summary judgment motion, it actually would result in less litigation. “This Court’s issuance of a final judgment vacating the unlawful Rule would permit the Fifth Circuit to review the legality of the Rule in a single proceeding after a final judgment, rather than adopting the cumbersome piecemeal approach advocated by Defendants.”

Mazzant denied the DOL’s request, saying that district courts must employ a four-factor test for granting such stays. According to U.S. Supreme Court precedent, courts must consider: “(1) whether the stay applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure other parties interested in the proceeding; and (4) where the public interest lies.”

The DOL has not shown that it is likely to succeed in showing that the court erred in issuing the injunction, Mazzant said, denying the department’s request (State of Nevada v. United States Department of Labor, No. 4:16-cv-731 (E.D. Texas, Jan. 3, 2017)).

Shortly before the DOL filed its motion, the Texas AFL-CIO moved to join the lawsuit, saying that if President-elect Donald Trump drops the government’s defense of the regulation as predicted, the union group will see it through.

“With the recent presidential election, and particularly as more information becomes available regarding the incoming Administration’s plans, policy, and appointments, the Texas AFL-CIO has grave concerns as to whether its interests in the Final Rule will be represented by the DOL,” it said.

The plaintiffs, however, argued that the organization’s speculation about the incoming administration’s views doesn’t justify granting its motion. “AFL-CIO proffers no legal basis warranting intervention now, solely based on speculation or concerns about whether the party that is adequately representing its interests now might change its position at some point in the future,” they said December 15, urging the court to deny the request.

The court has not ruled on that motion.

Kate TornoneKate McGovern Tornone is an editor at BLR. She has almost 10 years’ experience covering a variety of employment law topics and currently writes for HR Daily Advisor and HR.BLR.com. Before coming to BLR, she served as editor of Thompson Information Services’ ADA and FLSA publications, co-authored the Guide to the ADA Amendments Act, and published several special reports. She graduated from The Catholic University of America in Washington, D.C., with a B.A. in media studies.