Wage and Hour Defense Blog

On November 15, 2024, a district judge for the U.S. District Court for the Eastern District of Texas issued a significant, albeit somewhat unsurprising, opinion in Texas v. Department of Labor, vacating the U.S. Department of Labor’s (“DOL”) 2024 Final Overtime Rule (“Final Rule”), which, as we previously reported (here and here), had raised the minimum salary threshold on July 1, 2024, and was set to further increase the minimum salary threshold on January 1, 2025, for the executive, administrative, and professional (“EAP”) exemptions, and the highly compensated employee (“HCE”) exemption.

As a refresher, the Final Rule featured three components: (1) an increase to $844 per week (or $43,888 per year) for the EAP exemptions and to $132,964 for the HCE exemption that took effect on July 1, 2024; (2) a further increase to $1,128 per week (or $58,656 per year) for the EAP exemptions and to $151,164 for the HCE exemption on January 1, 2025; and (3) automatic increases every three years, beginning July 1, 2027.

The DOL previously issued a similar overtime final rule in 2019 that increased the minimum salary threshold from $455 per week to $684 per week. Unlike the 2024 Final Rule, the 2019 rule withstood legal challenge, and was upheld this past September by the U.S. District Court of Appeals for the Fifth Circuit.

On April 28, 2023, the U.S. Court of Appeals for the Fifth Circuit reversed and remanded a decision from the Western District of Texas declining to issue a preliminary injunction barring the Department of Labor (“DOL”) from enforcing a regulation known as the “80/20/30 rule.”

As we previously reported, on October 29, 2021, the DOL issued a final rule for determining which tipped employees may receive “tip credit” in lieu of receiving the full minimum wage directly from the employer.  Under the 80/20/30 rule, employers must pay employees at least the minimum wage if they spend more than 20% of their time on tasks that do not immediately and directly generate tips, including wiping down tables, filling salt and pepper shakers, rolling silverware into napkins, and other duties referred to in the industry as “side work,” or if they spend more than 30 consecutive minutes performing such tasks.  The Restaurant Law Center and the Texas Restaurant Association promptly sought a preliminary injunction in the Western District of Texas.

A little over two years ago, the U.S. Court of Appeals for the Fifth Circuit became the first federal appellate court in the country to reject the widespread and longstanding two-step approach of first “conditionally” certifying Fair Labor Standards Act (“FLSA”) collective actions under a very lenient, plaintiff-friendly standard, followed by applying more rigorous scrutiny after the close of discovery at the “decertification” or “final certification” stage.  As we discussed here, the Fifth Circuit concluded in Swales v. KLLM Transport Services, LLC that the FLSA requires not two steps, but instead a single step that carefully examines whether the group of workers at issue is “similarly situated” before a court authorizes any notices to potential opt-in plaintiffs.

In a provocative  decision in the case known as  Swales v. KLLM Transport Servs., L.L.C., No. 19-60847 (5^th Cir. 2021), the U.S. Court of Appeals for the Fifth Circuit broke from the pack by upending the standard two-step process for Fair Labor Standards Act (“FLSA” or the “Act”) collective certification. The Court opined that the two-step process followed by many, if not most, district courts throughout the country wrongly permitted conditional certification of collective actions without the appropriate evidentiary support to properly determine whether members of the ...

In a case of first impression for the Fifth Circuit Court of Appeals, a Fifth Circuit panel has ruled that it is the employee, not the employer, who has the burden to establish that bonus payments are non-discretionary and, therefore, must be included in the regular rate of pay for computation of overtime under the Fair Labor Standards Act (“FLSA”).  Joshua Edwards, et al. v. 4JLJ LLC, et al., Case Number 19-40553 (5th Cir. September 3, 2020).

Under the FLSA, a non-exempt employee’s regular rate is the hourly rate actually paid to that employee for all remuneration.  Section ...

Featured on Employment Law This Week: The U.S. Supreme Court takes on class action waivers.

In 2012, the National Labor Relations Board (NLRB) ruled that class action waivers in arbitration agreements violate employees’ rights under the National Labor Relations Act (NLRA). The U.S. Court of Appeals for the Second, Fifth, and Eighth Circuits disagreed, finding that these waivers do not violate the NLRA and are enforceable under the Federal Arbitration Act. More recently, the Seventh and Ninth Circuits sided with the NLRB on the issue. The Supreme Court will consider three ...

On January 13, 2017, the United States Supreme Court granted certiorari to hear three cases involving the enforceability of arbitration agreements that contain class action waivers.

Whether such agreements are enforceable has been a hotly contested issue for several years now, particularly in cases involving wage-hour disputes.

The Fifth Circuit has held that such waivers can be enforceable (NLRB v. Murphy Oil, Inc.), joining the Second and Eighth Circuits in that conclusion. The Seventh (Epic Systems, Inc. v. Lewis) and Ninth Circuits (Ernst & Young LLP v. Morris) have held that ...