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When Donald Trump won the U.S. Presidential election last November, one of the actions businesses anticipated was the death and burial of the greatly expanded overtime pay protections that the Department of Labor (DOL) championed under then-President Joe Biden.
On Friday, Feb. 28, Trump’s DOL did something on the matter that may make you raise an eyebrow. It pulled a legal move that, on its face, appears to support the previous administration’s rulemaking.
How We Got to This Point
To set up this story, note that the Biden DOL had issued a final rule in April 2024 that sought to:
- Significantly raise the minimum salary for exemption as an executive, administrative or professional (EAP) employee under the Fair Labor Standards Act (FLSA) and, in doing so, expand access to overtime pay to an estimated 5 million American workers who had been classified as salaried (or exempt) by their employer.
- Significantly increase the total annual compensation level for exemption as a “highly compensated employee” (HCE) under the FLSA.
In the months leading up to the election, the final rule was challenged in several lawsuits spanning multiple U.S. district courts, and on Nov. 15, 2024, the U.S. District Court for the Eastern District of Texas issued a decision in the case State of Texas v. Department of Labor that invalidated implementation of the rule. On Dec. 30, the U.S. District Court for the Northern District of Texas piled on, ruling against the DOL in the related case Flint Avenue, LLC v. Department of Labor.
On Nov. 26, three weeks after Trump’s win but less than two months before inauguration day, the DOL appealed the State of Texas verdict. After the pro-business new administration took office, some economists and legal pundits predicted the agency, led by Trump-installed leadership, would rescind its State of Texas appeal, close out the related cases and halt any federal momentum toward:
- Raising the bar for EAP exempt status;
- Increasing the salary threshold; and,
- Regularly updating that threshold with automatic salary escalator provisions.
What Trump’s DOL Did
On Jan. 22, two days after President Trump’s inauguration, Department of Justice (DOJ) attorneys sent a letter to the 5th U.S. Circuit Court of Appeals requesting a 30-day extension on the deadline to file an opening brief in the State of Texas appeal. The court granted the request and the agency’s filing deadline is currently set to March 7. So, State of Texas isn’t finalized yet.
On Feb. 28, the DOL filed an appeal of the Flint Avenue ruling. The 5th Circuit Court of Appeals will also hear this case.
This begs the question: Why is the Trump DOL appealing (or prolonging the appeal for) verdicts that support U.S. employers and a conservative political posture?
Well, it gets a bit more complicated here. In his Flint Avenue decision, Judge Samuel Cummings (who was appointed in 1987 by Ronald Reagan) opined that the DOL, in its April 2024 final rule, improperly based eligibility for overtime pay on workers’ salaries rather than their job duties.
The Trump administration is still expected to revisit and scrap the 2024 rule (such actions would hold to form). But appealing the Flint Avenue decision (and perhaps exploring salvageable elements of State of Texas) would allow his DOL (and installed agency leaders) to, when pertinent and in the administration’s interests, defend its ability to set a salary threshold for overtime eligibility.
In placing the case before the 5th Circuit, the administration likely has a court sympathetic to that reasoning. The court ruled last September in the case Mayfield v. Department of Labor that the agency can use workers’ salaries as a proxy for their duties. In addition, the court may consider historical precedence. The DOL has had the power to dictate salary thresholds since the 1930s, through Republican and Democratic administrations.
Neither the administration nor its DOL or DOJ provided any commentary or additional insight on the Flint Avenue appeal. More context will likely occur in the days to come.
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