Update: This story has been updated to reflect that a motion to intervene filed by the Texas AFL-CIO also was denied Aug. 31.
Dive Brief:
- A federal judge ruled Aug. 31 that the Obama administration's overtime rule is "invalid," completing what may prove to be the final step in the rule's slow demise.
- While an appeals court was busy debating the appropriateness of the injunction that initially halted the rule, a lower court judge reviewed the rule on its merits and found that the U.S. Department of Labor (DOL) did not have the authority to issue a rule that effectively eliminates the Fair Labor Standards Act's duties tests. He also noted that because the rule itself is unlawful, the automatic updates that it included are unlawful, too.
- The ruling wasn't totally unexpected, but it could have implications for DOL's ability to regulate in the future.
Dive Insight:
On one hand, the ruling is largely "beating a dead horse," according to Eric B. Meyer, a partner at Dilworth Paxson and author of The Employer Handbook. That's because President Donald Trump's DOL is already reviewing the overtime rule and considering a lower salary threshold, he told HR Dive.
And as for the judge questioning DOL's authority, Meyer said it likely won't prevent the the agency from now adopting a new threshold. The judge acknowledged that DOL is empowered to establish a salary level, "but it's got to be reasonable," he explained. The court also denied a request filed by the Texas AFL-CIO to take over the defense of the rule.
But there could be at least one more issue to sort out: a lawsuit filed against Chipotle that alleges the injunction halting the rules never applied to private employers. And, theoretically, someone could appeal this decision, too, Meyer said. But among all the confusion, one thing's for sure: "The Department of Labor is not going to adopt the Obama administration’s final rule."
