Dive Temporary:
- The State of Texas is not going to have to abide by the U.S. Division of Labor’s new time beyond regulation rule — which adjustments the edge at which staff qualify for time beyond regulation from an annual wage of $35,568 to $43,888 starting Monday — following a preliminary injunction request granted Friday by U.S. District Court docket Decide Sean Jordan.
- Texas filed its lawsuit June 3, arguing that in elevating the wage bar, the division exceeded its authority by classifying government, administrative {and professional} staff — so-called “EAP” staff — as nonexempt primarily based on their wage, not their bona fide job duties (State of Texas v. U.S. Division of Labor, et. al.). The decide agreed that the rule is probably going illegal.
- In his resolution, Jordan invoked Loper Vivid Enterprises v. Raimondo, the Supreme Court docket’s resolution to overturn the Chevron doctrine, which got here down earlier the exact same day.
Dive Perception:
“Within the evaluation that follows, the Court docket fastidiously follows Loper Vivid’s controlling steerage and the APA [Administrative Procedure Act],” Jordan wrote within the resolution — probably the earliest in what’s prone to be a slew of judicial motion primarily based on Friday’s landmark Supreme Court docket resolution.
Counting on the Administrative Process Act, Texas referred to DOL’s 2024 adjustments to the EAP exemption as “arbitrary, capricious, an abuse of discretion, or in any other case not in accordance with regulation.”
In its passage of the Truthful Labor Requirements Act, Congress exempted EAP staff however didn’t outline these phrases, Jordan famous. “An examination of the extraordinary that means of the EAP Exemption’s undefined phrases reveals that the Exemption activates an worker’s capabilities and duties, requiring solely that they match one of many three listed, i.e., ‘government,’ ‘administrative,’ or ‘skilled capability,’” Jordan wrote. “The exemption doesn’t activate compensation.”
Many lawsuits difficult regulatory interpretations this spring have relied on the APA’s “arbitrary and capricious” argument. Among the many plaintiffs are 18 pink states that sued the U.S. Equal Employment Alternative Fee in late April over its new harassment tips and a bunch of insurance coverage business associates looking for to cease DOL’s replace to the definition of an funding recommendation fiduciary below the Worker Retirement Revenue Safety Act.
Enterprise teams led by the U.S. Chamber of Commerce additionally used the declare after they challenged the Nationwide Labor Relations Board’s joint employer rule — a case the teams equally gained in a Friday resolution issued the Monday earlier than the rule was slated to take impact.
Though the State of Texas sought a nationwide injunction, Jordan restricted the scope of his resolution to the plaintiff alone. “Right here, the one get together earlier than the Court docket is the State of Texas, in its capability as an employer, suing to forestall the 2024 Rule from going into impact,” Jordan wrote. “Texas has placed on proof of its personal accidents as an employer, however has not in any other case provided any proof of accidents to different entities or people.”
Nevertheless, the identical decide presides over a problem to the rule a number of enterprise teams filed in Could. “This resolution might foreshadow the same lead to that case, in addition to in a case pending within the Fifth Circuit that challenges the DOL’s authority to problem any wage requirement,” attorneys from Jackson Lewis famous in a Friday weblog publish.
For now, the time beyond regulation rule takes impact Monday for all lined employers apart from the State of Texas.
