Labor Law -- 2017

Plano Chamber of Commerce v. Perez   (E.D. Tex.)

Challenging DOL's new overtime rule

The new overtime rule drastically alters the Department of Labor's (DOL) minimum salary requirements—increasing the minimum by 100%, from $23,660 to $47,476 annually—so as to impose new overtime payment requirements on businesses of all sizes and employers that employ millions of individuals who have historically been considered to be exempt from overtime. The new rule raises the minimum salary so high that the new salary threshold is no longer a way to define the categories exempted by Congress.

In addition, DOL’s new rule permits employers for the first time to count nondiscretionary bonuses, incentives, and commissions toward up to 10 percent of the minimum salary level for exemption; however, this provision is so restricted by the DOL as to be meaningless. It also establishes an unprecedented “escalator” provision that will dramatically increase the minimum salary over time. The escalator provision exacerbates the detrimental impact on businesses, both large and small, by automatically updating the minimum salary requirements to even higher levels every three years.

On October 14, 2016, the NAM filed a motion for summary judgment, which the court will consider as an amicus brief in support of the states’ motion for a preliminary injunction. We subsequently filed a motion to consolidate with the states' lawsuit, which was granted. On October 21, 2016, we filed a response to the government's motion to stay summary judgment briefing.

On November 22, 2016, the day after the NAM filed its reply brief, the court issued a nationwide injunction preventing the implementation of the rule. The court found that the DOL had likely exceeded its statutory authority in setting a salary threshold higher than necessary. On December 1, 2016, the DOL appealed to the Fifth Circuit. The DOL also filed a motion to pause all further proceedings in the district court pending its appeal of the preliminary injunction, and the AFL-CIO filed a motion to intervene in the district court. On December 15, 2016, the NAM filed briefs opposing the AFL-CIO's motion to intervene and the DOL's motion to stay proceedings pending appeal. The district court judge denied DOL's motion to stay proceedings.

On August 31, 2017, the judge ruled in our favor and granted summary judgment. The judge held that because the rule "would exclude so many employees who perform exempt duties, the [DOL] fails to carry out Congress’s unambiguous intent. Thus, the Final Rule . . . is unlawful."

Related Documents:
NAM Opposition Motion to Intervene  (December 15, 2016)
NAM Opposition Motion to Stay  (December 15, 2016)
NAM Reply Brief  (November 21, 2016)
NAM Response  (October 21, 2016)
NAM Motion to Consolidate  (October 17, 2016)
NAM Summary Judgment Brief  (October 14, 2016)
NAM Complaint  (September 20, 2016)
Press Release  (September 20, 2016)


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