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Labor Department appeals overtime ruling

Posted On: Oct. 31, 2017 1:48 PM CST

Labor Department appeals overtime ruling

The U.S. Department of Labor is appealing the Aug. 31 ruling by a federal judge that struck down the Obama administration’s overtime rule.

But the department also said in a statement Monday that once its appeal is docketed with the 5th U.S. Circuit Court of Appeals in New Orleans, the U.S. Department of Justice will file a motion with the court to hold the appeal in abeyance while Labor “undertakes further rule-making to determine what the salary level should be.”

The Labor Department in July called for public comments on the rule amid expectation it would issue a new rule with a lower salary threshold.

The overtime rule proposed by the Obama administration would have increased the threshold for overtime-exempt employees to $913 a week, or $47,476 annually for a full-time employee, from the current $455 a week, or $23,660 annually.

U.S. District Judge Amos L. Mazzant III in Sherman, Texas, issued a preliminary injunction in November 2016 halting the overtime rule’s planned implementation in response to litigation filed by 21 states and dozens of business organizations.

That ruling was appealed to the 5th Circuit, but the appeal was rendered moot when on Judge Mazzant struck down the rule on Aug. 31, holding overtime should be determined based on duties rather than salary.

At the same time, he ruled against the Austin, Texas-based Texas AFL-CIO, which had filed a motion to intervene in the case as a defendant. Judge Mazzant said in his ruling that the union “seeks to assert defenses” already raised by the Department of Labor. 

It appears the Department of Labor wants “to insure they have the power to do the things they want to be able to do,” said Richard R. Meneghello, a partner with Fisher Phillips L.L.P. in Portland, Oregon. “Even though the current administration may disagree with the previous administration on the merits of the rule in terms of how much the salary basis is increased for the overtime requirement, they don’t actually want to concede that they didn’t have the power to issue such a rule if they want to.”