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UPDATE: Federal Court Grants Preliminary Injunction Regarding new FLSA Overtime Regulations

Joel Gerring

By Joel Gerring, MASB Assistant Legal Counsel

DashBoard, Nov. 30, 2016

Back in the Sept. 7, 2016 issue of DashBoard we brought to your attention updates by the U.S. Department of Labor to its overtime rules, with one particular “final rule” resulting in a potentially significant expansion in the number of employees who may qualify for overtime pay. This new final rule was to take effect on Dec. 1 of this year. Lusk/Albertson Attorney Robert Schindler also informed members at length regarding this topic at the Michigan Council of School Attorneys Fall Conference earlier this month.

As various interest groups began to brace for the impact of this new rule, a coalition of states and business groups filed suit, arguing (among other things) that the U.S. Department of Labor had exceeded its authority by implementing the change unilaterally. On Nov. 22, a Texas federal court agreed and issued a nationwide preliminary injunction; meaning that, for the time being, the Department of Labor cannot enforce the new overtime rule.

The Department of Labor has indicated that it intends to appeal the preliminary injunction, which could result in its reversal within a matter of weeks or months. Of course, there is also the possibility that the injunction will remain in place while the merits of the underlying issue make their way through the federal court appeals process.

The National School Boards Association has weighed in on the matter via a letter submitted to the Senate Chair of the Health, Education, Labor and Pensions Committee, requesting legislative action to delay implementation of the rules, and, at the very least, requesting a “phase-in” period of a few years in order to allow school districts time to adjust to its potential financial impact.

MASB’s Legal Team will keep you informed as events regarding this matter unfold.

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