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Business Groups Sue to Enjoin DOL Rule Increasing Minimum Salary Thresholds for Overtime Exemption
Thursday, May 23, 2024

On May 22, 2024, a group of businesses filed sued to block the U.S. Department of Labor (DOL) from implementing its Final Rule, which would substantially increase the minimum salary required for the “white collar” overtime exemptions under the Fair Labor Standards Act (FLSA).

The plaintiffs are a group of national business associations, as well as businesses and associations local to the court in Texas where the lawsuit was filed. The plaintiffs claim that the Final Rule should be enjoined for the same reasons that the same court blocked the Obama administration’s attempt to increase the minimum salary threshold back in 2017.

Specifically, the plaintiffs allege that the Final Rule should be permanently enjoined, because:

  1. The Final Rule exceeds the statutory authority given to the DOL by Congress under the FLSA.
  2. The Final Rule violates the Administrative Procedure Act (APA) by adopting an automatic escalator for minimum salary thresholds.
  3. The DOL’s adoption of the Final Rule was arbitrary, capricious, and otherwise in violation of the APA.

In our prior alerts on this issue – the April 25, 2024 alert that described the effects of the Final Rule, and the May 15, 2024 alert that discussed how the Final Rule would be enforced – we noted that a legal challenge was expected, but that none had been filed.

This lawsuit now starts the process for a federal court to consider whether the DOL acted within its authority in promulgating the Final Rule. Notably, the lawsuit comes a full month after the Final Rule was announced, and less than six weeks before its July 1 effective date.

Moreover, the plaintiffs did not file any motions relating to their request to block the implementation of the Final Rule. Thus, there is a question as to whether the court will be in a position to act on plaintiffs’ requests by July 1.

It is possible that the court will order a temporary delay, allowing it to consider the claims without requiring businesses to comply with the first increase (to $844 per week/$43,888 per year) as of July 1, but at this early stage there is no way to be certain what the court’s timeline will be.

The case is Plano Chamber of Commerce, et al., v. Su, et al.(Docket No. 4:24-cv-00468,E.D. Tex. May 22, 2024).

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