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SDF Labor & Employment Newsletter Alert – July 2024

July 1, 2024

Supreme Court Decision Likely Spells Doom for FLSA Salary Increase & FTC Ban on Non-Competes 

We have previously reported on rules issued by the Department of Labor increasing the salary threshold required for exemption from overtime and by the Federal Trade Commission banning non-compete agreements. Those rules were set to go into effect July 1 and September 4, respectively.

However, on Friday, June 28, a Texas District Court ruled that the Department of Labor exceeded its authority with its rule increasing the salary that is required for an employee to be exempt from overtime. The Texas court relied on the United States Supreme Court’s recent decision in Loper-Bright v. Raimondo in which the Court dramatically changed the amount of deference due to a federal government agency. It abolished a legal doctrine known as Chevron deference, named after a case the Court decided 40 years ago. While the Texas Court’s decision technically only applies to the State of Texas as an employer, the Court’s decision is likely to be followed by other courts when called upon to decide the enforceability of the salary rule in light of the Loper-Bright decision. A broader injunction, and possibility one that applies nationwide, could result from one or more of the other cases that are pending.

The Loper-Bright decision is also expected to similarly impact the FTC’s ban on non-compete agreements. That rule is also under challenge in a Texas District Court. A ruling is expected any day. Most predict the judge in that case will also find that the FTC exceeded its authority.

Employers worried about implementing these rules can breathe a sigh of relief. While the DOL and FTC rules are still alive, all signs lead to their ultimate demise. We are available to answer your questions and will continue to monitor developments regarding these agency rules.

Written By: Trip Umbach


If you have any questions or need legal support, please contact:

Trip Umbach   205-868-6072 or tumbach@starneslaw.com

Alfred Perkins   205- 868-6024 or aperkins@starneslaw.com

Breanna Young 205- 868-6020 or byoung@starneslaw.com

Grace Ann Azar 205-868-1760 or gazar@starneslaw.com

Averie Jones 205-868-6043 or ajones@starneslaw.com

Scott Stevens 251-405-5067 or sstevens@starneslaw.com

Weathers Bolt 251-445-4718 or wbolt@starneslaw.com


This information is not intended to provide legal advice, and no legal or business decision should be based on its content. No representation is made that the quality of legal services to be performed is greater than the quality of legal services performed by other lawyers. Read full disclaimer.

 

 

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