As my colleague Bill Pokorny reported back on August 31, a Texas District Court struck down the Obama Administration’s FLSA Overtime Exemption Rule, holding that the Department of Labor (DOL) exceeded its authority by increasing the minimum salary for the Executive, Administrative, and Professional Exemptions to $913 per week. In a (somewhat) surprise move, on October 30, the DOL notified the District Court that it would be appealing the August order.
Wait…what?! Why is the Trump administration’s DOL appealing an order that ruled how it wanted? Is this some kind of Halloween trick? Well, it is likely that the DOL’s move is intended to protect the agency’s belief that the DOL has the authority to issue a rule that sets a salary threshold for overtime. Indeed, Labor Secretary Alex Acosta has indicated on multiple occasions that the Trump administration’s DOL intends to seek a revised version of the OT rule that includes a salary threshold more to its liking. The DOL’s statement issued on Monday confirmed as much stating the agency will undertake further rulemaking to determine the appropriate salary level for the overtime exemption. However, it is not entirely clear from the Court’s ruling whether the DOL even has the authority to determine a salary basis for the exemption without Congressional approval.
One other notable twist in this never-ending saga is that the AFL-CIO filed its own notice of appeal of the District Court’s order denying its request to intervene in the case. It is believed the AFL-CIO will support the DOL’s argument that it has the authority to set a new salary threshold, but may go further – advocating that the threshold should be the one set by the Obama Administration’s OT rule. If the AFL-CIO wins its appeal and is allowed to intervene, that could certainly make things interesting for the DOL!
So what does this all mean? The DOL’s goal is clear – erase the District Court’s order so that it will not limit or hamper the agency’s attempt at setting what it believes to be a more appropriate salary threshold. Such strategy is not without risk. It is possible that the Fifth Circuit Court of Appeals overturns the District Court’s ruling and upholds the Obama OT Rule in its entirety. This would be a huge burden for the Acosta-led DOL to overcome if President Trump truly wants to set a new salary threshold.