Today, we have an update on our previous post about challenges to the upcoming changes to the Department of Labor’s overtime regulations. We also have a quick note on other legal action affecting employment laws. It’s been a pretty busy few weeks in the U.S. District Courts for the Eastern District of Texas!
Shortly after Texas and multiple other states filed a lawsuit to stop the new overtime rules from going into effect on December 1, 2016, the U.S. Chamber of Commerce and 50 other groups, including the Plano Chamber of Commerce and the Frisco Chamber of Commerce here locally (as well as the Texas Association of Business), filed a similar lawsuit in the Eastern District of Texas to stop the overtime rules from going into effect. They claim the Department of Labor exceeded its authority with respect to the new regulations. In fact, the Frisco Chamber of Commerce estimated that more than 70% of its member businesses would be affected by increasing the salary threshold. On October 19 at the businesses’ request, Judge Amos Mazzant of the U.S. District Court for the Eastern District of Texas – Sherman Division consolidated the businesses’ lawsuit and the states’ lawsuit. While the cases will proceed together, the states’ case will be the lead case. As we previously said, even though this action is pending, we recommend that all businesses prepare for the change in the regulations and proceed as if the regulations WILL go into effect on December 1, 2016.
In addition to the legal action regarding the change in overtime regulations, there is other employment law action in the Eastern District of Texas. On Monday, October 24, 2016, Judge Marcia Crone of the U.S. District Court for the Eastern District of Texas – Beaumont Division issued an order halting enforcement of new federal rules that would require United States government contractors to disclose labor law violations, including safety violations, when those contractors are bidding for contracts. Judge Crone stated that the new system outlined pursuant to President Obama’s Executive Order went beyond what the U.S. Congress authorized and appeared to amount to compelled speech in violation of the First Amendment to the U.S. Constitution. Judge Crone’s injunction order applies nationwide. With an election upcoming and the U.S. Supreme Court currently split at 4-4 on ideological grounds, this could sit a while. As always, we will keep you updated.