In an emergency preliminary injunction, a Texas federal judge blocked a new overtime rule from the U.S. Department of Labor, championed by President Obama, from taking effect nationwide on December 1.
On Tuesday, U.S. District Court Judge Amos L. Mazzant III rendered a 20-page opinion from the Eastern District of Texas court in Sherman. He agreed with a 21-state coalition and an alliance of business groups including the U.S. Chamber of Commerce that the federal overtime rule was unlawful and the Obama Administration overstepped its authority.
The judge granted a temporary preliminary injunction to block the nationwide implementation of the rule which would have more than doubled the salary threshold for a worker to be entitled to receive overtime pay. It also would have forced many state and local governments, as well as private businesses, to substantially increase their employment costs.
“The finalized overtime rule hurts the American worker. It limits workplace flexibility without a corresponding increase in pay and forces employers to cut their workers hours. All in all, it exchanges the advantages of negotiated benefits, personal to each worker, with a one-size-fits-all standard that only looks good in press statements. Not on my watch,” said Texas Attorney General Ken Paxton, who, with Nevada Attorney General Adam Laxalt co-lead a lawsuit filed in September on behalf of nearly two dozen states to block the overtime rule. In it, they alleged the Obama Administration was in violation of the Tenth Amendment.
Specifically at issue, the new rule seeks to extend overtime eligibility to roughly four million workers by diminishing a “white collar” exemption and doubling the salary level to which employers must pay overtime from the current $455 per week ($23,660 per year) to $913 per week ($47,476). This pay threshold would automatically readjust every three years to reflect average wage changes.
Mazzant heard arguments for the preliminary injunction last week. On Tuesday, he gave his opinion saying the new rule improperly created a salary test to determine worker eligibility under the Fair Labor Standard Act’s “white collar” exemption. He reprimanded: “The Final Rule…is contrary to the statutory text and Congress’s intent” and “Congress, and not the Department, should make that change.”
After obtaining the injunction, Paxton said: “The Obama administration proved true to form when it ordered the Department of Labor to revise its interpretation of the Fair Labor Standards Act. Namely, the administration assumes that through force of will alone, it could order a new economic reality into existence.”
According to the Dallas Business Journal, Nevada’s AG Laxalt said he was “stunned” by the legal opinion and called it “breathtaking — legally and politically.”
Because of the emergency injunction, this new overtime rule will not go into effect anywhere in the nation on December 1. The Department of Labor issued a statement on the court’s decision:
We strongly disagree with the decision by the court, which as the effect of delaying a fair day’s pay for a long day’s work for millions of hardworking Americans. The department’s overtime rule is the result of a comprehensive, inclusive rulemaking process, and we remain confident in the legality of all aspects of the rule. We are currently considering all of our legal options.
Laxalt said he expects the Department of Labor to appeal the judge’s opinion to the Fifth Circuit Court of Appeals, anticipating the lawsuit will escalate to the U.S. Supreme Court.
The Nevada AG also called Mazzant’s decision “huge” that all 50 states and private business will not be forced to enact the “unlawful” rule. He tweeted: “Businesses and state and local governments across the country can breathe a sigh of relief…”
— Adam Paul Laxalt (@AdamLaxalt) November 23, 2016
Another state party to the lawsuit is Arkansas. In a news release, the state’s AG Leslie Rutledge called the injunction “an important victory that will help protect countless Arkansas business owners, nonprofits, sheriffs, mayors and county judges from increased costs and forced layoffs.”
She noted: “I am grateful to Judge Mazzant for granting this important injunction until the full legality of the rule can be determined, and I hope the Department of Labor will ultimately reconsider this ill-advised rule.”
In addition to Texas, Nevada, and Arkansas, the other states that joined the lawsuit are Alabama, Arizona, Georgia, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Mississippi, Nebraska, New Mexico, Ohio, Oklahoma, South Carolina, Utah, and Wisconsin.
Follow Merrill Hope, a member of the original Breitbart Texas team, on Twitter.