That dilemma was temporarily resolved when a federal court in Texas issued a preliminary injunction against the regulation in November, 2016. That preliminary injunction was shocking to most observers because it held that Congress never gave the DOL the authority to set any type of minimum salary level. Therefore, the judge was not ruling that the proposed $47,476 salary level test was excessive; he was ruling that the DOL has no authority to set any type of salary level as part of the white collar exemption.
Shortly after the federal district court issued the preliminary injunction, the Obama Administration’s DOL appealed the ruling to the Fifth Circuit Court of Appeals and requested an expedited appeals schedule. Then the Trump Administration came into office and things were delayed as we waited for Trump to appoint a new Secretary of Labor. Finally, on April 27, 2017, the new Secretary of Labor, Alexander Acosta, was confirmed and we saw a change in strategy.
Because the Trump Administration did not agree with the judge’s decision that the DOL had no authority to issue any type of salary level, it continued the appeal. But it also issued a Request for Information which indicated that it was going to re-examine the Obama Administration’s proposed regulation. So, the Administration supported the judge’s decision to stop the Obama white collar regulation, but not for the reason stated by the trial judge.
All of this got resolved when the trial judge issued his permanent injunction which took the place of his earlier preliminary injunction. In this August 31, 2017 decision, the federal court judge backtracked on his earlier decision that the DOL had no authority to set a salary level. Rather, he found that the proposed regulation, in more than doubling the salary level, exceeded the DOL’s authority. Not surprisingly, the Trump Administration is satisfied with that result and will not appeal it. So the Obama Administration’s proposed White Collar regulation is officially dead.
We now will wait to see what action, if any, the DOL takes with regard to the white collar exemptions. In the Request for Information (RFI), the DOL asked interested parties to submit comments on a number of issues, including whether there should be a salary level test and, if so, how it should be set. NFDA submitted comments on the RFI pointing out that any increase must be implemented over time and should account for the cost of living differences around the country. We will continue to track this issue.
While the official review will not start until next year, the FTC is informally asking interested parties what issues they wish to look at during the review. NFDA will be submitting its wish list that involves modifying the distribution requirements for price lists, allowing a variable basic services fee, eliminating price ranges on the GPL, and making several other changes to the Rule.