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Summary Judgment Granted to Texas Business Groups Challenging the Obama Administration's Revised Overtime Rule

By Brian R. Redden with Robert G. Hyland

On August 31, 2017, a Texas federal court judge declared that the Revised Overtime Rule issued in 2016 by the Obama Administration that would have altered the landscape with respect to non-exempt employee and overtime regulations for employers throughout the United States is invalid. United States District Court Judge Amos Mazzant granted summary judgment to the various business groups who had challenged the new 2016 FLSA Overtime Rule. This rule would have doubled the minimum salary required to qualify for the white collar/executive exemption from $23,660.00 to nearly $47,500.00. This new Overtime rule, covered in this Blog in November, 2016, was expected to have significant impact on numerous industries and a negative impact on middle income earners' ability to earn overtime or compensatory time. The rule would have impacted many administrative, middle management, and sales personnel. The Trump Department of Justice is not expected to appeal the Judge's decision.

Based on the Court's decision, employers and employees now have a determination that the Obama Administration's attempt at changing the FLSA Overtime and Exemption rules is unenforceable and will not take effect.

Interestingly though, the Trump Department of Labor recently sent out a request for information with respect to the FLSA Overtime Rule to employer and industry groups. This Request could indicate that the Department of Labor may be examining whether there is a need for revision of the current Overtime and Exemption rules to a lesser degree than what was promulgated by the prior administration. The ruling by Judge Mazzant indicated that perhaps a much lower adjustment in the minimum salary would have been acceptable. In short, development in this area of Employment Law may not be at an end.

Should you have questions regarding your employer obligations under the Fair Labor Standards Act or any other employment matter, do not hesitate to contact Brian Redden, Robert Hyland, or another Buechner Haffer Meyers & Koenig lawyer.

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