Off the Kuff Rotating Header Image


Texas AFL-CIO wants to be the defendant in the overtime case

Because they don’t trust the feds post-January 20 to do the job for them.

“We’re not saying that the Department of Labor and the Department of Justice haven’t forcefully defended the regulations [so far], but as for whether that will continue in the future, we’re starting to have serious concerns,” Yona Rozen, an assistant general counsel at the AFL-CIO, said in an interview Monday. Rozen is representing the Texas branch in the litigation in front of U.S. District Judge Amos Mazzant III in the Eastern District of Texas.

The AFL-CIO branch’s rare motion, filed Dec. 9, marks the latest chapter in a long fight over the rules, which labor regulators contend will provide time-and-a-half overtime pay to an additional 4 million workers.

The plaintiffs in the case, including 21 states, won a preliminary injunction last month. The challengers in the consolidated litigation—including the states and business groups such as the U.S. Chamber of Commerce—contend the rules violated states’ rights and the Administrative Procedure Act.

In order to intervene in the case, the Texas AFL-CIO must show it has sufficient interest in the issues and that its position won’t be represented adequately by the current named defendants. The plaintiffs oppose the Texas AFL-CIO’s request to intervene. The Justice Department on Monday said it takes no position on the Texas labor group’s request.

The motion filed by the Texas AFL-CIO, a federation of 650 local Texas unions, anticipates that Trump’s Labor Department will not support the rule. Andrew Puzder, the fast-food company chief executive who is Trump’s pick for Labor secretary, has opposed the Obama administration’s push to boost worker-pay.

“With the recent presidential election, and particularly as more information becomes available regarding the incoming administration’s plans, policy and appointments, the Texas AFL-CIO has grave concerns as to whether its interests in the final rule will be represented by the DOL,” the labor group wrote in its court papers.

See here for the background. The expedited appeal to the Fifth Circuit will take place on January 31, so it’s easy enough to imagine a different cast of lawyers from the Labor Department, whose new chief opposes the overtime rule change, tanking teh case. Of course, Congress or the new honcho could undo the rule as well, but there’s no need to make it easy for them. We’ll see what happens.

Fifth Circuit agrees to expedited appeal of overtime injunction

Good news and bad news.

The U.S. Court of Appeals for the Fifth Circuit granted an expedited hearing for the Department of Labor in litigation over new overtime regulations.

The Labor Department is seeking a hearing in its effort to overturn a trial court’s ruling halting the Obama administration’s proposed regulatory revisions that would have doubled for most employees the salary proposed threshold for overtime pay. Those rules were halted from taking effect on Dec. 1.

The appellate court ordered that oral arguments will be scheduled after Jan. 31, 2017, 11 days after President-elect Donald Trump is set to be inaugurated.

For lawyers advising employers, that timing prompts questions, with speculation that the Labor Department under Trump may drop the appeal.

“Bottom line for employers is unfortunately much uncertainty,” Doug Diaz, a partner with Archer in Haddonfield, New Jersey, wrote in an email.

“In the event the appeal is successful and the overtime rule is enforced retroactively, employers may be liable for overtime to those employees classified as exempt from overtime under the current rules, but not under the new rule,” Diaz wrote.

“At a minimum, employers should therefore keep accurate records of hours worked and ideally, if possible, limit overtime until there is more clarity, in order to reduce any potential exposure in the event of a successful appeal,” Diaz added.

See here and here for the background. Diaz’s email pretty much sums it up. We’ll just have to see what happens in January. The Texas AFL-CIO, which has filed a motion to intervene in the lawsuit, has more.

More on the overtime rule ruling

From the NYT:

Over the last two years, Federal District Court judges in the state have chipped away at Mr. Obama’s legacy by striking down or suspending no fewer than five regulations, executive orders or actions, and guidelines, including an action that would have allowed illegal immigrants who are parents of United States citizens to remain in the country, and guidance that would have expanded restroom access for transgender students.

The injunction in the overtime case, issued on Tuesday by a judge nominated by Mr. Obama, has many advocates and legal experts concerned.

“It’s a troubling trend because it’s essentially delegating policy oversight to a set of handpicked judges in the South, who can pick and choose which regulations move forward and which do not,” said Matthew Wessler, a principal at the firm Gupta Wessler who has argued multiple cases involving workers before the Supreme Court.


In an interview, the Nevada attorney general, Adam Paul Laxalt, whose state was the lead plaintiff in the case against the overtime rule, said that the coalition of states it led had elected to file in the Eastern District of Texas because the district had a reputation for handing down rulings quickly.

“That was what is known as a fast docket,” Mr. Laxalt said. “The decision was made based on a bunch of variables, but we thought we may be able to get the quickest answer.” Citing the Dec. 1 effective date for the new regulation, he said, “We were really fighting the clock.”

Mr. Laxalt added that Nevada had been part of multistate litigation that was filed in other states, including a case over a rule regulating waterways, which was filed in North Dakota.


Even though the federal judge who ruled on the overtime regulation, Amos L. Mazzant III, was formally nominated by Mr. Obama in 2014, the influence of Mr. Cruz and Mr. Cornyn made it unlikely that he would be overly sympathetic to federal regulations, Mr. Levy said.

Still, the sweep of Judge Mazzant’s decision appears to have surprised even skeptics of the regulation.

The Obama regulation raised the annual salary limit below which workers are automatically eligible for overtime pay — something that previous administrations, including George W. Bush’s, had done several times since 1938 — to $47,476, from $23,660.

In his ruling, however, Judge Mazzant suggested not simply that the administration lacked the authority to raise the salary limit so high, but that no administration had the authority to establish and raise a salary limit of any kind.

Nothing in the law, he wrote, “indicates that Congress intended the department to define and delimit with respect to a minimum salary level.”

(Judge Mazzant retreated from the implications of this statement in a footnote asserting that he was determining the legality only of the Obama regulation.)

Asked if he agreed with the judge that the Labor Department lacked the authority to create a salary limit of any kind, not just the new level developed by the administration, Mr. Laxalt, the Nevada attorney general, said, “We do think the judge got it right when he said it’s unclear whether or not they can do an arbitrary salary test,” but confessed that he wouldn’t necessarily follow the ruling to its logical conclusion.

“I’m not prepared to say categorically we’re opposed to the 23,000,” the limit established by George W. Bush, he said.

For his part, Thomas E. Perez, the labor secretary, argued in an interview that it simply was not possible to single out the Obama salary limit as extreme or arbitrary while accepting the previous increases, since the new limit was in line with some of them.

“If we had simply indexed the 1975 threshold to inflation, that number would be well in excess of what our current threshold is,” he said — about $57,000 annually.

The administration is widely expected to appeal the ruling, given the extensive history of such increases, and many management-side lawyers believed that Judge Mazzant was out on a limb.

“The Labor Department has been setting these minimums since 1940,” said Allan Bloom of the law firm Proskauer Rose. “This is the first time that a district court judge is essentially saying you don’t have the authority to do that.”

See here for the background. Kevin Drum brings the charts to show why the Labor Department’s rulemaking was well within the bounds of past precedent and should have been respected. It’s telling that even the lead plaintiff, who got everything he wanted and then some, didn’t quite fully embrace Judge Mazzant’s reasoning. I suppose that’s a small sliver of hope that the Fifth Circuit could reel him in, but you know what what it means to have to rely on the Fifth Circuit.

And of course to some extent this is all play acting at this point. The Trump Labor Department, which will no doubt be run by someone who longs for the days of indentured servitude and who thinks child labor laws are an affront to common decency, can simply repeal this directive at its discretion. And if you’ve been applauding these district court judges essentially making national policy, just remember that two can play this game. I think this is a bad way to run a government, but if it’s the reality we’re now in, then it is what it is.

UPDATE: The Labor Department has asked the Fifth Circuit for a quick hearing of their appeal.

Judge issues injunction against overtime pay change

Because of cours he did.

Millions of low-paid supervisors would have become eligible for overtime pay next week, but a federal judge in Texas blocked that path late Tuesday afternoon, ruling that Congress intended duties, not wages, to determine eligibility for overtime and minimum wage.

U.S. District Judge Amos L. Mazzant, sitting in Sherman, issued an emergency preliminary injunction to stop new overtime rules adopted by the Obama administration from taking effect on Dec. 1 as scheduled. The new rules would have raised the automatic salary threshold for executive, administrative, and professional positions to be eligible for overtime.

Under current rules, white collar workers earning more than $455 a week ($23,660 annually) are not eligible for overtime. The new rules would double that threshold to $921 per week, ($47,892 annually).

The state of Texas and 20 other states requested the injunction after filing suit to prevent enactment of the higher wage thresholds. The states argued they couldn’t afford to pay overtime to employees who were exempt under existing standards. The injunction appears to apply to all employers, including private employers.


Employment lawyers said that the ruling doesn’t mean that the new rules will get thrown out, but rather stops them from being put into effect while the case is litigated. Stephen Roppolo, a Houston lawyer, said he expects the Labor Department will ask the Fifth Circuit Court of Appeals to step in and overrule the lower court.

“It’s not a done deal,” Roppolo said.

The Labor Department did not immediately respond to a request for comment.

Mazzant noted in his ruling that when Congress enacted the Fair Labor Standards Act in 1938, it did not include a salary threshold. The Labor Department developed a duties test to define which occupations were exempt from overtime. By 1949, the department had incorporated a minimum salary into the formula.

The last time the rules changed was 2004, when white collar workers had to meet three tests to be exempt from overtime: they had to be paid a salary, earn at least $455 per week and perform executive, administrative or professional duties.

The real focus of Congress was on the duties performed, not salary paid, noted Mazzant.

See here for the background, and here for the opinion. You’d think after an election that was supposedly all about economic anxiety and stagnant wages, a judge blocking an effort to increase the pay for millions of people who currently earn modest salaries, due to the relentless efforts of Attorneys General like Ken Paxton, might be a bit of a political issue going forward. Just a thought. The Trib, Kevin Drum, Nancy LeTourneau, and the Current have more.

Texas versus the feds, Overtime Pay Edition

Hey, look, it’s another lawsuit filed by Texas against something the Obama administration did that our AG doesn’t like.

Texas is helping lead a lawsuit against President Barack Obama’s administration over a new rule that makes millions of more workers eligible for overtime pay.

Attorney General Ken Paxton announced Tuesday he is joining his counterpart in Nevada, Adam Laxalt, to file the lawsuit on behalf of 21 states. Paxton said the rule, announced earlier this year by the U.S. Department of Labor, is another example of Obama “trying unilaterally rewrite the law.”

The rule, set to go into effect Dec. 1, doubles the salary threshold under which workers qualify for overtime pay, from $455 per week to $913 per week. The Labor Department estimates the rule will benefit an additional 4.2 million workers.

Critics of the rule say it will place a new burden on businesses, potentially forcing them to demote or lay off workers whom they cannot afford to pay more. On Tuesday, Paxton warned the rule “may lead to disastrous consequences for our economy.”


The lawsuit specifically claims that the rule is too broad because it is based on the salary threshold. Such a requirement, the states argue, overlooks the fact that some workers in the salary range perform management duties that would make them ineligible for overtime.

The states are asking a federal judge in Sherman to issue an injunction to prevent the rule from taking effect. Texas and Nevada are being joined in the lawsuit by Alabama, Arizona, Arkansas, Georgia, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Mississippi, Nebraska, New Mexico, Ohio, Oklahoma, South Carolina, Utah and Wisconsin.

A copy of the lawsuit is here. The DMN has a response to the arguments put forth in the suit.

Lawrence Mishel, president of the Economic Policy Institute, said sarcastically that the salary standard had also been raised in the past by “other communists like George W. Bush and Gerald Ford.”

“It’s remarkable that somehow they think it’s an overreach,” he said. “But it’s not an overreach when an employer asks a $25,000-a-year employee to work 20 hours of overtime for free?”

I trust that’s a rhetorical question, but feel free to answer it anyway, because those are always the most fun. I suspect that as with other recent litigation, the fact that this lawsuit was filed in Sherman is not a coincidence, but the result of seeking out the most sympathetic bench they could find. That has been a fairly successful strategy so far, so keep an eye on that. A statement from the Texas AFL-CIO is beneath the fold, and the Chron has more.


You really can go broke saving money

The state of Texas has cost itself billions of dollars over the past decade or so by doing things like cutting CHIP and thus losing out on far more federal funds than any savings achieved in the state budget. Harris County is costing itself a bunch of money in deputy overtime because of their current hiring freeze. And the city of Houston is losing revenue in the municipal courts because of a bizarre and unpopular new policy that is keeping police officers out of the courts for traffic cases most of the day. The policy was intended to reduce overtime costs, and you can guess the rest:

While the city has saved a quarter-million dollars on officer overtime in just two months, revenue at municipal court is down $2.3 million in August, September and October 2010 compared to the same three months last year.

Officers say it’s because so many cases are being reset and unresolved that fines are not being paid.

I certainly understand wanting to control overtime costs, but there’s no possible way that this makes sense. In addition to reducing revenues at a time when the city – and HPD – desperately needs them, it greatly inconveniences people who have court dates, and effectively denies them due process. One way or another, the city – and by that I really mean Mayor Parker and HPD Chief McClelland – needs to address this.

Still focusing on overtime

Mayor Annise Parker talks again about trying to control HPD and HFD overtime costs as a way of bridging the city’s budget shortfall.

Mayor Annise Parker provided an early picture of how she intends to close a $140 million budget gap to City Council Wednesday, indicating she will steer the city away from layoffs and furloughs, but demand millions in cuts from public safety departments.

Parker, however, said she plans to move forward with the city’s contractual obligations to pay raises to all employees.

“The budget, as it stands now, does not have any cuts in those pay increases, nor does it have any major furloughs,” she told council. “We may be the last major city in America not to have a furlough, and I kind of want to hold on to that.”


Parker has insisted that the cuts under consideration, which include everything from reducing overtime to privatizing ambulance services, are necessary because more than $1 billion — roughly half of the city’s general fund budget — is spent in the Houston police and fire departments.

She said the cuts she has proposed, which she said would reduce spending by more than $16 million, will not reduce the number of police officers on the street.

Although she offered few specifics, Parker said police and fire budgets will be trimmed by taking a close look at overtime expenses. Police overtime can be reduced by adding a cadet class and fire overtime can be reduced by changing the structure of some shifts, she said.

I hope the Mayor is able to hold onto that “no furloughs” distinction, too. More on overtime costs is here, and more on ambulance costs is here; be sure to read the comment, as well. Bringing in another cadet class mirrors the county’s plan to help reduce overtime costs in the Sheriff’s office, which is both sensible and likely to be broadly popular. We don’t know the details yet, so we’ll see how this plays out.

NFL passes new overtime rule


The National Football League owners have approved a change in overtime, starting with the playoffs following the 2010 season, that will modify the sudden-death format and prevent a team from winning a game with a field goal on the opening possession.

The vote was 28-4, with the Buffalo Bills, Minnesota Vikings, Baltimore Ravens and Cincinnati Bengals voting against. It needed at least 24 votes to pass.

“It was really a good discussion in the sense that there’s been a lot of debate, both publicly and privately, over the rule — which is always good,” Competition Committee co-chair Rich McKay said in announcing the vote. “We’ve had this discussion for a number of years. We felt like this proposal, which we call ‘modified sudden death,’ was really an opportunity to make what we think was a pretty good rule — sudden death — even better.”

McKay stressed that the new overtime rule, which says the team receiving the kickoff can’t end the game on the first possession unless it scores a touchdown, will apply only to the playoffs.

“Part of the reason we have different rules is we have different consequences,” McKay said. “The consequences in the postseason are, go home if you don’t win. In the regular season, we have 15 other games.”

I would like to see this rule apply to all games, and despite what McKay says here the owners will consider expanding the new rule to the regular season in May. There are some wrinkles and subtleties to the new rule, concerning things like onside kicks and safeties, which just goes to show that you can never truly do anything the easy way in the NFL. Better make sure all of the refs get a thorough education on this. And yes, as promised, Texans owner Bob McNair voted for the rule change, and will support bringing it to the regular season as well.

McNair to vote to change overtime

Good for him.

Bob McNair will vote yes when NFL owners cast their ballots next week to change overtime for playoff games.

McNair doesn’t like the sudden-death system that’s been in place since 1974.

“I’m in favor of changing it,” McNair said. “I don’t like the prospects of going into overtime, losing a coin flip, and we might not even get the ball.”

The NFL spring meetings begin Sunday in Orlando, Fla., and the competition committee that includes Texans general manager Rick Smith is recommending that overtime be changed in the playoffs to allow each team at least one possession if the team that wins the coin toss kicks a field goal.


“They’re talking about something that makes sense,” McNair said. “I’d be in favor of something like that, where you can’t lose by a field goal on the first possession. I like it better if you have a chance to get the ball, too, and a touchdown wins.”

As you know, I prefer the college overtime system, which feels to me like extra innings in baseball. That it always allows each team a chance to be on offense is why I like it. But this change, however tiny, is still better than what the NFL has now.

NFL to consider new overtime rules

But only for the playoffs, at least for now.

Under the new format, both teams would get the ball at least once unless the first team to get the ball scores a touchdown, Greg Aiello said. If the first team to get the ball makes a field goal and the other team ties the game, action would continue until a team scores again.

Under the current rules, the first team to score wins.

“There have been various concepts that have been discussed in recent years, but this one has never been proposed,” Aiello said.

I confess, I rather like the NCAA’s way of breaking ties. But this is better than what the NFL is doing now, which leaves teams too dependent on the coin toss. I say give it a try and see how it goes, and be willing to do the same thing in the regular season. What do you think?