On November 3, 2017, the U.S. Department of Labor (DOL) filed a motion with the U.S. Court of Appeals for the Fifth Circuit asking the appellate court to hold in abeyance the DOL’s appeal of a district court decision that invalidated controversial federal overtime regulations promulgated by the Obama administration in 2016. The purpose of the motion is to hold off on any ruling in the case while the DOL under President Trump works on its own proposed overtime regulations.

If the 2016 regulations had gone into effect, they would have more than doubled the minimum salary requirement for the major white-collar overtime exemptions under the Fair Labor Standards Act (FLSA) from $455 per week to $913 per week. Annualized, that would have been an increase in the salary threshold from $23,660 per year to $47,476 per year.

Secretary of Labor Alexander Acosta has indicated that he thinks the $47,476 threshold proposed by the Obama administration is too high, and that a more reasonable annualized threshold would be between $30,000 and $35,000. In July 2017, the DOL published a detailed Request for Information (RFI) in the Federal Register, in which it asked several questions seeking input regarding the appropriate salary level (or levels) and the duties tests for the white-collar overtime exemptions. The DOL currently is reviewing the comments it received in response to the RFI, and it is asking the Fifth Circuit to “hold this appeal in abeyance, with status reports due every 180 days, pending the outcome of the new rulemaking.”

The DOL’s filing of the motion for abeyance occurred just one day after the appeal was docketed by the Fifth Circuit and was the anticipated next step in this case.

As we reported at the time the DOL filed its Notice of Appeal, the approach being taken by the government in this matter is consistent with the approach previously taken by the U.S. Department of Justice (DOJ), which represents federal agencies such as the DOL in this type of litigation. More specifically, when a federal district court finds that an agency has exceeded its authority in issuing a new rule, the DOJ will file an appeal while the federal agency it represents again engages in the rulemaking process to replace the rule that the federal district court found to be deficient. The DOJ then will move for a stay arguing that the appeal may become unnecessary due to the anticipated issuance of the new rule. 

Indeed, the DOL had stated on its website: “Once this appeal is docketed, the Department of Justice will file a motion with the Fifth Circuit to hold the appeal in abeyance while the Department of Labor undertakes further rulemaking to determine what the salary level should be.”