Injunction? What injunction? New class action suit claims employer violated the new DOL overtime rules

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This one’s got me confused like Britney on X-Factor.

Last year, a Texas federal court entered a nationwide injunction against the U.S. Department of Labor’s proposed overtime rules. Among other things, those overtime rules would have raised the minimum salary level needed for an employee to be exempt from receiving overtime from $455 per week to $913 per week.

Tell that several hundred workers in NJ who believe that the nationwide overtime-rules injunction doesn’t apply to them.

Emma Whitford reporting here at Gothamist describes the facts of this class and collective action complaint that was filed yesterday in a federal court in New Jersey — of course:

The lead plaintiff on the case is Fairfield resident Carmen Alvarez, a 55-year-old mother and grandmother, who has worked as a manager-in-training at multiple Chipotle restaurants since 2013, often in excess of 40 hours per week. Last November, the suit alleges, she and other apprentices were converted from salary to wage workers and began making overtime—apparently in response to new federal guidelines. But when the Texas ruling came down, the suit alleges, Alvarez and her coworkers lost their overtime.

The lawsuit cites a December email from Chipotle stating that the workers would revert to their previous salaries and would not earn overtime “because of” of the Texas decision. Since then, Chipotle has not kept track of workers’ hours, which consistently creep past 40. Meanwhile, managerial apprentices continue to do many of the same tasks as their hourly counterparts, including filling orders and preparing sides like salsa, guacamole and chopped vegetables on the assembly line.

Dorothy Atkins at Law360 reports here (you’ll need a subscription to access the article) summarizes the legal claims:

The suit argues that the DOL’s 2016 extension of overtime eligibility to millions of workers earning less than $47,476 per year is in effect, despite a Texas federal court’s ruling temporarily enjoining the DOL from implementing and enforcing it.

The suit claims the Texas ruling, in favor of a group of states and business groups, has no bearing on private companies’ responsibility to comply with the overtime threshold, and … companies have been erroneously relying on the Texas decision in order to avoid paying workers overtime in violation of the Fair Labor Standards Act and New Jersey labor statutes.

So, WTH?!?

Wasn’t that nationwide injunction on the proposed overtime rules supposed to maintain the status quo across the country? Since then, the DOL keeps asking the appellate court to delay a ruling on the appeal. And, President Trump ordered a regulatory freeze.

Therefore, here’s what could happen:

  1. The New Jersey federal court rules that the nationwide injunction on the overtime rules applies — even in New Jersey. Employer wins.
  2. The New Jersey federal court adopts the rationale of the Texas federal court and holds that the Obama DOL exceeded its authority by adopting the overtime rules. Employer wins.
  3. Some hybrid of 1 and 2 with the DOL intervening for the employer. Employer wins.
  4. The New Jersey federal court sips the New Jersey Kool-Aid and rules in favor of the plaintiffs.
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