As expected, on December 1, the DOL filed its appeal related to the preliminary injunction that put the new overtime rule on hold. The DOL is also seeking a motion for an expedited briefing of its appeal asking that the U.S. Court of Appeals for the Fifth Circuit in New Orleans issue a ruling on the expedition of the appeal by December 8 and for all briefs in the case to be filed between December 16, 2016 and February 7, 2017. Given the time frame of the rulings, it is unlikely that there will be a final ruling before the new administration arrives January 20, 2017. Ongoing and substantial litigation in the case is likely. SHRM, Allen Smith and Lisa Nagele-Piazza, lay out the details and possible scenarios.
Employers should continue with plans they made after the rule was blocked from taking effect.
The Department of Labor filed a motion for an expedited briefing of its appeal of a federal judge’s decision to put the brakes on the federal overtime rule, but that shouldn’t affect what companies do at this point.
The appeal was brought Dec. 1 by Labor Secretary Thomas Perez, Wage and Hour Administrator David Weil, Assistant Administrator Mary Zeigler and the DOL.
Unless the court grants a motion for an expedited hearing or a motion for a stay (which would make the rule take effect), employers should continue as they’ve been doing since Nov. 22 when Judge Amos Mazzant granted the emergency motion for a preliminary injunction to stop the rule, said Robert Boonin, an attorney with Dykema in Detroit.
The appellate process can be time-consuming, he said. The notice of appeal triggers the District Court for the Eastern District of Texas to send a record of the case to the Fifth Circuit Court of Appeals in New Orleans, which could take a couple of weeks. Then there is the timeline for filing briefs, which is at least 30 days, Boonin added. Without an expedited hearing, the briefs wouldn’t be filed before Inauguration Day on Jan. 20, he said.
“The only way it would be heard before is if there is an expedited appeal and if the court grants it, and those are two big ifs,” Boonin said.
Brett Coburn, an attorney with Alston & Bird in Atlanta, said the DOL may ask the 5th Circuit to review the decision on an expedited basis, but it isn’t clear if the department has a solid argument as to why the appellate court should make this case a higher priority than others.
If the upcoming change of administration is the only reason presented (President-elect Donald Trump has indicated he does not support the entire rule), the judges may not be inclined to speed up the review process, he said.
Employers should stick with whatever course of action they already decided to take at this point, whether they opted to wait and see what happens to the rule or to roll forward with changes for employee-morale reasons or other purposes.
Motion to Stay?
“It was widely anticipated that the DOL would appeal the case and it would go to the 5th Circuit,” said Carol Barnett, an attorney with Polsinelli in St. Joseph, Mo. Now employers must “anxiously await what the 5th Circuit decides to do.”
It would not be unusual for the DOL to file a motion to stay the injunction, which would suspend the injunction during the appeals process.
If that happened, Barnett said, “we’d be back to square one and the rule would apply—perhaps only for a limited period of time.”
That would “potentially open a Pandora’s box,” she noted, although she said that President-elect Donald Trump might abandon the regulations once he comes into office.
Barnett expects more questions about the appeal though, saying that her clients were frantically calling her over the Thanksgiving holiday about the preliminary injunction. She said the appeal “raises more questions that are best individually handled by attorney and client.”
DOL’s appeal is “a strong move” that shows it “believes the regulations were properly put together.” But she thinks “the next administration will see things differently.”
“Although DOL has appealed the preliminary injunction, the overtime rule still faces an uphill battle,” said Nancy Hammer, senior government affairs policy counsel for the Society for Human Resource Management. “A final court decision could take some time and the new administration arriving on Jan. 20 is unlikely to defend the rule in court,” she explained. “This appeal is another step in the process toward certainty for employers.”
“There are 50 days left in this administration,” said Alfred Robinson Jr., an attorney with Ogletree Deakins in Washington, D.C., and former administrator of the Wage and Hour Division. “There’s a good chance this rule will not become effective.”
He noted that if there is not an expedited appeal, an appeals court can take months to rule on a lower court’s decision.
As Coburn put it, “This is just the initial volley that may lead to some interesting developments later on.”
The Department of Labor under President-elect Donald Trump may withdraw the DOL’s appeal of a preliminary blocking of the federal overtime rule if there hasn’t been a decision on the appeal by Inauguration Day.