Trump Faces Choice on Overtime Appeal
By Allen Smith, J.D.
Dec 5, 2016 - SHRM
The Department of Labor (DOL) 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. But there's a slight chance the appeal will be
decided before Jan. 20, though every day that goes by without an order on the
appeal makes the chance of it "exponentially narrower," said Eric Magnus, an
attorney with Jackson Lewis in Atlanta.
The DOL moved for an emergency hearing on Dec. 2, but
courts' dockets move slower this time of year, he added. And it isn't a
persuasive argument to say an expedited hearing is needed because presidents are
changing, he said.
On the other hand, a single judge can grant a motion
for expedited hearing. If it wanted to, the 5th Circuit could even
hear the case without both sides submitting legal briefs. But the DOL
requested a brief schedule that straddles Inauguration Day, making a decision
before inauguration unlikely.
Even if a panel of the 5th Circuit reverses the
preliminary injunction before inauguration, the state plaintiffs in the case
could delay the court's order by filing a petition to be heard by the full
circuit—something the plaintiffs would be likely to do since 10 of the 15 judges
on the 5th Circuit were appointed by Republican presidents, Magnus noted.
Whether the Trump administration withdraws the DOL's
appeal is "a question of timing," agreed Brett Bartlett, an attorney with
Seyfarth Shaw in Atlanta. If the court refuses an expedited hearing and briefs
are filed after Jan. 20, Trump's DOL is more likely to withdraw the appeal, he
predicted, though workers might perceive a withdrawal as pandering to
corporate interests.
In the DOL's motion for expedited briefing, it
proposed the following scheduling of briefs:
- Dec. 16—DOL's opening brief.
- Dec. 23—Friend-of-the-court briefs in support of the DOL.
- Jan. 17, 2017—The plaintiff states' brief.
- Jan. 24, 2017—Friend-of-the-court briefs in support of the
states.
- Feb. 7, 2017—The DOL's reply brief.
Given the requested schedule of the briefs, a 5th
CIrcuit decision before Inauguration Day is unlikely.
Trump's Position Uncertain
If a decision is not reached before Jan. 20, the
question becomes whether Trump "really is a Republican" who will withdraw a
challenge of the court order blocking the rule, Magnus said.
Maybe he figures he was elected because of blue-collar
voters and decides not to withdraw the appeal in order to fight to preserve
overtime rights, he noted. Then the case eventually is headed to the Supreme
Court, he predicted.
However, Carol Barnett, an attorney with Polsinelli in
St. Joseph, Mo., thought Trump was more predictable, noting he mentioned on the campaign trail that he opposed the overtime
rule's application to small businesses. Trump isn't likely to pursue an appeal
originally brought by the Obama administration, she said.
Trump could either withdraw the appeal or simply let
the case languish. "If you do not proceed according to [court] deadlines, you
may not be able to proceed at all," she said.
Other Ruling Could Be Imminent
In addition to 21 states challenging the overtime
rule, the U.S. Chamber of Commerce and other business groups sued over it, and
the states' and Chamber's lawsuits were consolidated. The business group plaintiffs
sought summary judgment, a motion that has not been ruled on yet.
[SHRM members-only HR Q&A: What is the difference between California overtime exemption
requirements and federal overtime exemption requirements?]
Brett Coburn, an attorney with Alston & Bird in
Atlanta, predicted that Judge Amos Mazzant, the same judge who granted the
preliminary injunction, might grant the business groups' motion for summary
judgment. And that ruling could be soon, Coburn said.
Or Mazzant might choose to wait to see what the 5th
Circuit does. Any granting of a motion for summary judgment could be
appealed.
More Overtime Rulemaking?
If the preliminary injunction still is in place Jan.
20, the Trump administration might ask the court to consider leaving it in place
pending new rulemaking, said Alfred Robinson Jr., an attorney with Ogletree
Deakins in Washington, D.C.
While the district court questioned the DOL's
authority to use a salary-level threshold for the white-collar exemptions,
Robinson said the court really was taking issue with the department for
overreaching on the exempt salary level by more than doubling it from $23,660 to
$47,476 a year. Most people agree there needs to be an increase in the exempt
salary level, just not too much too fast, he noted. The salary amount should
complement the duties test rather than supplant it, he explained.
"The Trump administration DOL could abandon its
pursuit of an appeal and instead focus on more modest regulatory changes that
allow the administration to maintain its pledge to support American workers
while abrogating the drastic changes that were set to take effect," said Jim
Swartz, an attorney with Polsinelli in Atlanta.
If there were more rulemaking, the Trump
administration might consider nuances overlooked by the Obama administration's
overtime rule, such as modified overtime rules for small businesses, nonprofits
and rural areas, according to Robert Boonin, an attorney with Dykema in Detroit.
And it could consider whether the Fair Labor Standards Act permits any
salary-level threshold.
In any event, new rulemaking could be lengthy,
Bartlett observed.
As for the status of the appeal, for now employers are
"in a holding pattern and will have to keep their eyes on it," Coburn said.