The Eastern District Court of Texas approved a preliminary injunction that will halt the Department of Labor’s new overtime rule that was set to take effect on December 1. The injunction will remain in effect until a decision is made in the case.

“The National Restaurant Association is cautiously optimistic with today’s decision by the Eastern District of Texas,” says Cicely Simpson, executive vice president of government affairs and policy at the National Restaurant Association. "This was a critical step in what we hope will be a positive outcome in the case against the Department of Labor.”

The decision does not delay the overtime rule indefinitely, although it does place it in serious jeopardy. Additional legal actions or a final decision by the Court in favor of the Department of Labor could result in the overtime rule taking effect, but the litigation and possible appeal process is likely to drag out until President-elect Donald Trump's inauguration, giving him the ability to drop the defense of the rule. He expressed support for changing the order during his campaign.

Texas U.S. District Judge Amos Mazzant issued the injunction in a 20-page order.

“Due to the approaching effective date of the Final Rule, the Court’s ability to render a meaningful decision on the merits is in jeopardy,” he wrote. “A preliminary injunction preserves the status quo while the Court determines the department’s authority to make the Final Rule as well as the Final Rule’s validity.”

Twenty-one state attorneys, as well as a handful of business groups challenged the rule. It would have extended overtime pay to more than 4 million workers starting December 1 and have required employers to pay overtime wages to most salaried workers earning less than $47,476 annually. Currently, the salary limit is just $23,660.

The National Council of Chain Restaurants applauded the decision.

“Today, Judge Mazzant agreed with what NCCR and our coalition allies have been saying all along: that the Labor Department’s ill-conceived overtime regulation is a dramatic government overreach causing significant harm to small businesses and their employees around the country,” says Rob Green, the executive director. “The regulatory ‘timeout’ imposed by Judge Mazzant should allow Congress to vote to stop the regulation once and for all and would also let the incoming Trump administration create a more realistic and workable overtime solution based on sound economic considerations."

Employee Management, News