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Status of OT Rule

Wed, December 14, 2016 4:34 PM | Anonymous

Partnership to Protect Workplace Opportunity Members and others interested in changes to the overtime rules,

Here is the latest overview of where the overtime regulation stands, and some thoughts about what might be coming in the New Year.

Litigation

                As you know, the regulation is currently blocked by a preliminary injunction (PI) issued by U.S. District Judge Amos Mazzant on November 22.  The federal government has filed to appeal this PI to the 5th Cir. Ct. of Appeals and their motion for expedited consideration has been granted.  Under that request, the last briefs will be due January 31 with oral arguments to follow at a yet to be determined date, with a decision after that.  The key point is that this appeal will carry over into the Trump administration and the new administration will have to decide whether to continue with the appeal (i.e. defending the regulation), or abandon the appeal and let the injunction stand.

                Still pending before Judge Mazzant is the business groups’ Motion for Summary Judgment.  If Judge Mazzant grants this motion, it would result in a permanent injunction and moot the appeal of the PI, forcing the government to reinitiate an appeal of the permanent injunction. Obviously, such an appeal would also carry over into the Trump administration.

                The AFL-CIO will be petitioning to intervene in the case at the District Court level. This is a petition that must first be granted by the judge, and would not alter the underlying legal posture of the case—the PI would remain, and the arguments would not change. The only impact is that if the Trump administration does not continue the appeal, there would now be a party who could.

Congress

                While the House adjourned on Thursday, pro forma sessions have occurred, which means the opportunity to subject the overtime regulation to Congressional Review Act consideration in the next Congress (under the CRA, if a house of Congress adjourns before the 60 legislative day for consideration of a regulation expires, that regulation may be taken up in the next Congress within a 45 legislative day window) is still fluid. 

                One question that will have to be addressed if a CRA resolution is possible is how to handle the CRA’s prohibition on the agency issuing a regulation that is in “substantially the same form.”  The CRA provides that such a regulation can be issued only if Congress enacts specific authorization after the resolution of disapproval.  What exactly constitutes a substantially similar regulation is unclear as this phrase has never been tested.  Any legislation specifically authorizing a new regulation would have to move without the privileged procedure of a CRA resolution. It could also include specific provisions such as blocking any regulation that included an automatic update.

Incoming Trump Administration

                When the new administration takes office after January 20, this regulation will be one of the first items with which it will have to deal.  As noted above, the most immediate question will be whether to continue defending the regulation though the legal appeal process.  If the new administration declines to continue the appeal, it would no longer be a party.  If the AFL-CIO (or another outside party) is granted intervenor status, the appeal would continue to some final resolution.  If no other party is granted intervenor status, and the government declines to pursue the appeal, then the injunction would stand and the regulation would remain blocked.

                If the regulation is permanently enjoined, then the next question faced by the new administration would be whether to pursue a revised overtime regulation.  While Secretary of Labor nominee Andrew Puzder has spoken out strongly against the Obama Administration overtime regulation, we do not yet have any indication about what approach the new administration would take with regard to a new overtime rulemaking.

Bottom line: the rule is blocked from going into effect until further notice.  Any change in that status cannot come until sometime in February at the absolute earliest, and likely later than that.   There are no signals yet as to how the incoming Trump administration will respond to the legal challenge, or whether it will pursue a new regulation. 

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