DOL Appeal of Decision invalidating 2024 overtime Rule Likely on the Last Legs

The United States District Court for the Eastern District of Texas, on November 15, 2024 in State of Texas V. United States Dep’t of Labor ruled that the U.S. Department of Labor had exceeded its rulemaking powers by issuing in April 2024 a rule raising the minimum salary for an exemption as a executive, administrative or professional (EAP), employee under the Fair Labor Standards Act.

Under DOL’s rule the minimum salary for an EAP employee exemption, with limited exceptions increased from $684 per weekly ($35,568 annuallyized) to $844 each week ($43.888 annuallyized) on July 1, 2024. A second increase would’ve raised the salary threshold from $684 per week ($35,568 annualized) to $844 per week ($43,888 annualized) on January 1, 2025. The rule also increased minimum annual compensation levels for exemptions as a “highly-compensated employee” (HCE), and provided automatic triennial increases to the minimum compensation levels beginning July 1, 2027. The November 2024 decision declared the DOL’s rule an “unlawful exercise of agency power” and vacated it nationally.

The DOL–represented by the U.S. Department of Justice, Civil Division–filed an appeal of the decision with the U.S. Court of Appeals for the Fifth Circuit, notwithstanding that the incoming Trump administration was all but guaranteed to have no interest in appealing a decision curbing agency rulemaking power and saving American businesses untold billions in new overtime expenses. The government requested a 30-day extension to March 7, 2025 to file the opening brief of its appeal within 48 hours of Inauguration Day. This was due to “other business”. We wouldn’t expect the Trump Justice Department to do anything else in this case than withdraw the appeal. It may be for four years, but not forever. In its decision of September 2024 in Mayfield v. United States Dep’t of Labor, the Fifth Circuit held that the DOL’s power to “define” or “delimit” terms of EAP exemptions included the power to set a salary minimum for exemption — albeit with some meaningful limits. The Fifth Circuit denied Mayfield’s request for a rehearing by en bloc on February 14, 2025. We’ll see if Mayfield tries to take the issue to the U.S. Supreme Court.

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