New Developments in Ongoing Litigation Enjoining Obama Era White Collar Overtime Rules

U.S. Department of Labor Asks Fifth Circuit to Hold Appeal in Abeyance Pending New Rulemaking

District Court Considers Contempt Finding for Lawsuit Seeking to Enforce Enjoined Prior Regulations
November 9, 2017
In May 2016, the Obama Administration’s Department of Labor issued overtime regulations that substantially increased the salary threshold for the “white collar” overtime exemptions. The regulations were to go into effect December 1, 2016, but on November 22, 2016, Judge Amos Mazzant in the Eastern District of Texas issued a nationwide preliminary injunction enjoining their implementation. Nevada v. U.S. Dep’t of Labor, 218 F. Supp. 3d 520 (E.D. Tex. 2016). The Obama Administration immediately appealed the injunction to the Fifth Circuit. Although the Trump Administration continued with the appeal, it noted that it would not advocate for the salary level set by the 2016 rules. (See our July 7, 2017 blog post for more discussion of the appeal.) When on August 31, 2017, Judge Mazzant permanently enjoined the regulations, Nevada v. U.S. Dep’t of Labor, 2017 WL 3837230 (E.D. Tex. Aug. 31, 2017), the DOL reversed course and asked the Fifth Circuit to dismiss the appeal.  

In July 2017, the DOL issued a request for public comments on 11 questions about potential changes to the overtime white collar exemptions, which we summarized in this blog post. More than 140,000 public comments were received.

Last week, the DOL appealed Judge Mazzant’s permanent injunction (on October 30), and then asked the Fifth Circuit to “hold this appeal in abeyance pending the outcome of new rulemaking” (on November 3). The Fifth Circuit granted the unopposed motion on November 6.

During this ongoing litigation, as discussed in our June 12, 2017 blog post, Carmen Alvarez filed suit against her employer, Chipotle Mexican Grill Inc., in the District of New Jersey seeking to enforce the 2016 overtime exemption regulations. She argued that the preliminary injunction only applied to the DOL, not private plaintiffs. In August, Chipotle sought sanctions before Judge Mazzant, arguing that Alvarez and her attorneys “intentionally disregarded” his order. In a November 6 hearing on Chipotle’s motion for sanctions, Judge Mazzant stated that Alvarez’s attorneys “did probably violate” his order, and rejected their argument that it did not apply to private plaintiffs. Judge Mazzant will rule on the sanctions motion following post-hearing briefing.

DOL Wages and Overtime