A U.S. district judge in Sherman granted a preliminary injunction Nov. 22 on the U.S. Department of Labor’s new overtime rule, effectively delaying the rule’s implementation originally scheduled for Dec. 1.

The preliminary injunction does not completely stop the rule from being implemented but “preserves the status quo while the court determines the [DOL’s] authority” to establish the new overtime rule, according to court documents.

On Dec. 1 the U.S. Department of Justice appealed the preliminary injunction granted by U.S. District Court Judge Amos Mazzant. The appeal was filed in the U.S. Circuit Court of Appeals for the Fifth Circuit on behalf of the DOL.

The DOL said it disagrees with the court’s preliminary injunction and believes it has the legal right to implement the rule.

“The [rule] is the result of a comprehensive, inclusive rule-making process, and we remain confident in the legality of all aspects of the rule,” the DOL said in a statement.

The new rule would have increased the salary threshold for full-time, salaried employees exempt from overtime pay from $455 per week (or $23,660 annually) to $913 per week (or $47,476 annually).

Employees classified as executive, administrative or professional who earn less than $47,476 annually would qualify for overtime pay under the new rule, according to the DOL.

President Barack Obama first asked the DOL in 2014 to update the overtime requirements, stating that the current requirements were outdated and kept millions of Americans from receiving much needed pay.

The rule was expected to extend overtime protection to more than 4 million full-time, salaried workers nationwide.

More than 20 states filed a lawsuit in September against the DOL, arguing that the rule is unconstitutional and would cause irreparable harm to the states. The states filed an emergency motion for the preliminary injunction to delay the rule’s implementation.

The Frisco Chamber of Commerce also joined more than 50 Texas business organizations in September in filing a lawsuit against the DOL. In October, those business organizations moved for an expedited summary judgment on the case, which was consolidated into the motion for a preliminary injunction.

Shona Huffman, Frisco Chamber’s director of governmental affairs, said the Chamber is pleased with the preliminary injunction but knows there is more ahead.

“We’re pleased that there’s been an injunction,” she said. “This shows that we are joining with other chambers across the country and across the state to continue to advocate for the businesses on their behalf.”

Until a final decision is made on the overtime rule, Huffman said the Chamber is recommending that businesses either keep with their salary increases they made to put employees’ salaries over the new threshold—if
that is the route they chose—or allow their employees to maintain flexible work schedules rather than enforcing a rigid 40-hour work week.

“It enables them as a business to do what’s best for the business and the employees by having that flexible option that works for them,” Huffman said. “[The Chamber is] encouraging them to maintain that flexibility that they were doing before they had to enact these rules.”

Possible next steps

There are several possible outcomes with this case, said Jill Weinberg, a board certified attorney in labor and employment law.

With the appeal filed against the preliminary injunction, the case could be decided in the Court of Appeals, she said.

Weinberg said it is unlikely that the U.S. Supreme Court would take the case.

The U.S. House of Representatives has also filed legislation that would stop the rule from being implemented. That legislation is still pending in Congress.

Weinberg also said the new Republican President-elect Donald Trump could give an executive order to stop the rule from being implemented or to change the rule.

“It’s limbo land right now,” Weinberg said. “My advice to employers has been not to change anything given the injunction.”

Weinberg said any decision on the updated overtime rule is likely not to be made until the beginning of the year.