Trump Administration Drops Appeal of Overtime Ruling09.06.17
Last week our colleague, Bob Boston, wrote that the federal trial court in Texas formally struck down the Obama administration's overtime rule, which attempted to raise the minimum salary for exempt employees. You can read about the decision here. The government has just announced that it is dropping its appeal that had been pending before the Fifth Circuit of the court’s earlier decision enjoining enforcement of the new regulations.
Why did they do that?
President Trump's Department of Labor initially indicated it would appeal the injunction that prohibited the new rule from going into effect. DOL likely changed course because the Texas district court's final order striking down the rule was based on slightly different reasoning. The trial court’s original injunction suggested that the DOL might not have the authority to set a minimum salary. The government likely thought that suggestion went too far.
When the final order on summary judgment was entered last week, however, the court relied on slightly different reasoning. The judge didn't say that the Department of Labor could not set any minimum salary. Instead, the judge said the Obama rule went too far, too fast.
The court held that the Obama OT regs raised the salary too much and too quickly leaving open the possibility that a more incremental increase would be acceptable. That seems to satisfy the Trump Administration which dropped the decision to appeal.
Is the Obama rule finally dead?
Probably. It's certainly on life support. There is still one last avenue for those who hope to revive it. On December 9 2016, the AFI-CIO filed a motion to intervene in the case so that it could defend the rule. Its motion said, "[w]ith 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." That motion is still pending.
It's possible the Fifth Circuit will allow the union to intervene and take up the defense of the 2016 rule, but it's a long shot.
Allowing a third party to defend a regulation after the government has abandoned it is both unorthodox and an arduous uphill fight. As the tortured history of this regulation proves, anything is possible. Our best guess, however, is that the union's efforts to defend the rule will be rejected.
So the OT rules go back to where they were, right?
Unfortunately, no. The DOL’s July 25th request for information on the overtime rule implies that, though they weren’t happy with the Obama rule, they may not be completely satisfied with the status quo either. We blogged about what this could mean here.