Nationwide Injunction Rejected in One Overtime Challenge

The U.S. District Court for the Northern District of Texas on July 1 declined to block the new overtime rule nationwide. The ruling comes on the heels of the U.S. District Court for the Eastern District of Texas blocking the rule for the state of Texas as an employer in a separate lawsuit. We’ve gathered articles on the news from SHRM Online and other outlets.

The ruling clears the way for the July 1 increase of the salary threshold for the white-collar exemptions to the overtime rule to take effect for all employees except those working for the Texas state government.

Injunction Denied

The U.S. District Court for the Northern District of Texas disagreed with Flint Avenue LLC’s argument that a preliminary injunction was necessary to prevent the rule from driving up its payroll costs, finding that the measure’s initial July 1 increase to overtime salary thresholds wouldn’t affect any of the marketing and technology company's employees.

Senior U.S. District Judge Sam Cummings agreed with the U.S. Department of Labor’s (DOL’s) argument that the company “cannot manufacture the element of irreparable harm to its junior employee and then demand the extraordinary remedy of a nationwide preliminary injunction.”
Attorneys for Flint Avenue, which is represented by the New Civil Liberties Alliance, predicted the overtime rule would be struck down later in the litigation.

(Bloomberg)

Litigation Continues

The Flint Avenue case is still being considered on its merits, but for now, the DOL’s overtime exemption rule remains unblocked and therefore in effect for private employers.

(Squire Patton Boggs)

Rule Blocked for Texas State Employees

The new federal overtime rule was blocked from applying to employees of the state of Texas on June 28, just days before the rule’s first increase to the salary threshold was to take effect on July 1.

For all other employers in Texas and around the U.S., the rule takes effect in two phases of raising the salary threshold for white-collar exemptions from overtime requirements: first from $35,568 per year ($684 per week) to $43,888 per year ($844 per week) on July 1 and then to $58,656 per year ($1,128 per week) on Jan. 1, 2025. There will be further automatic increases to the salary threshold every three years, starting July 1, 2027.

(SHRM Online)