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DOL appeals decision invalidating OT rule, to seek abeyance while rulemaking is pending

By Pamela Wolf, J.D.

The Department of Labor is not only appealing a Texas federal court’s decision invalidating the final overtime rule because it found the salary level exceeded the department’s authority, it is also going to ask the Fifth Circuit Court of Appeals to hold the appeal in abeyance while the DOL undertakes further rulemaking to determine what is the appropriate salary level.

Rule invalidated. In Nevada v. Department of Labor, the lower court on August 31, 2017, granted the business plaintiffs’ motion for summary judgment. Applying Chevron, the court found that the updated salary-level test (which nearly doubled the floor below which overtime must be paid to executive, administrative, and professional employees) contained in the final rule does not give effect to Congress’ unambiguous intent. “Specifically, the Department’s authority is limited to determining the essential qualities of, precise signification of, or marking the limits of those ‘bona fide executive, administrative, or professional capacity’ employees who perform exempt duties and should be exempt from overtime pay,” wrote the court. But the final rule “makes overtime status depend predominately on a minimum salary level, thereby supplanting an analysis of an employee’s job duties.”

Notably, even the DOL admits that the FLSA does not give the Secretary of Labor authority to “adopt a ‘salary only’ test for exemption.” Because the final rule would exclude so many employees who perform exempt duties, the rule does not carry out Congress’ unambiguous intent, concluded the court.

Moreover, even if the intent of Congress was ambiguous, the DOL’s construction of the FLSA is impermissible. By more than doubling the previous minimum salary level, the DOL “effectively eliminates” a consideration of whether an employee performs “bona fide executive, administrative, or professional capacity,” the court said.

Rulemaking in progress. The DOL noted that on July 26, 2017, it published a request for information about the final overtime rule, asking for public input on what changes the department should propose. That comment period has ended and the DOL is reviewing those submissions.

Appeal and abeyance. On October 30, 2017, the Department of Justice, on behalf of the DOL, filed a notice to appeal the Nevada v. Department of Labor decision invalidating the overtime rule to the Fifth Circuit. Once this appeal is docketed, the DOJ will file a motion to hold the appeal in abeyance while the DOL undertakes further rulemaking to determine the appropriate salary level.