Breaking News: Overtime Litigation Heating Up
Late last week, the U.S. District Court for the Eastern District of Texas announced it had scheduled a hearing on Friday, November 8 regarding the challenge of the Department of Labor’s overtime threshold regulation that went into effect on July 1, 2024 with the first tranche of increase in the minimum threshold. The second tranche is scheduled to go into effect on January 1, 2025. In addition to the automatic increase in the threshold contained in the rule, the court will be considering both of the salary threshold increases and whether they are consistent with the Fair Labor Standards Act (FLSA). Because the final phase of the rule goes into effect on January 1, 2025, a ruling is expected from the court ahead of that date, though an appeal is expected no matter the outcome of the lower court ruling. NCA has been engaged with the Department of Labor for three years on this specific rule and will continue to update members on developments.
NCA is also signing on to a letter addressed to the Wage & Hour Division Administrator requesting a delay in the second increase to the minimum salary threshold to at least May 1, 2025 due to the pending litigation.
Situational Awareness
Leading up to Election Day, tens of millions of voters have already cast their ballots. While early voting data is not an accurate indicator of an election’s results, several data points have stood out to analysts, such as greater early turnout among Republican voters than in the last presidential election. Several states have reported record-high turnout in 2024, including Georgia—one of the seven swing states expected to determine the presidency.
In recent days, both campaigns delivered their final arguments to voters. Vice President Kamala Harris has worked to contrast herself with former President Donald Trump, arguing that her administration will seek common ground across the political spectrum to pass legislation that would lower costs for working and middle-class Americans. Concurrently, Trump has presented a populist vision of a “stronger America,” characterized by new tariffs on imported goods and a more secure southern border.
While the Harris campaign has bet on disillusioned Trump voters of 2016—who are concerned with the state of democracy and reproductive health access—to switch their votes, the Trump campaign hopes frustrations with inflation and other economic pressures will drive certain historically left-leaning voters, including men of color, to vote for the former president.
Members of both the House and Senate also spent October on the campaign trail as control of both chambers hangs in the balance. Democratic Leader Chuck Schumer and DSCC Chairman Gary Peters have a monumental task of protecting 23 Democratic incumbent members including seats in reliable red states such as Montana and Ohio as well as swing states including Arizona, Nevada, Wisconsin, Michigan and Pennsylvania. With Senator Manchin’s retirement guaranteeing that Republicans will pick up a seat in West Virginia, it is anticipated that Republicans will gain control of the Senate in January 2025.
Due to the most recent redistricting, there are limited competitive districts in the House and only 18 districts that President Biden won in 2020 currently held by Republicans. The road to the majority for Democrats will run through New York and California, and they will need to make significant gains in those states to win the speaker’s gavel.
Georgia Freelancers Appeal Dismissal of Contractor Rule Lawsuit
A group of freelance writers and editors in Georgia has filed an appeal to the 11th Circuit Court of Appeals after a Georgia federal court dismissed their challenge against the Department of Labor’s (DOL) updated independent contractor rule. The lawsuit argued that the rule, which has been in effect since March, violates the Administrative Procedure Act for being overly vague and conflicting with the Fair Labor Standards Act.
The district court judge ruled earlier this month that the freelancers didn’t have standing to sue over the worker classification rule because they weren’t harmed by the policy change: “By definition, the 2024 Rule’s fact-specific approach cannot pose a realistic danger to Plaintiffs’ ability to operate as independent contractors because the ultimate classification may change from case-to-case.”
There are currently four pending lawsuits against the DOL rule in Texas, Tennessee, New Mexico, and Louisiana federal courts, in addition to the now-dismissed case in Georgia. Three were brought by businesses or business associations, while one was brought by another group of freelance writers.
NLRB’s Cemex Doctrine Divides Ninth Circuit Judges
Last week, the US Court of Appeals for the Ninth Circuit heard oral arguments from Cemex Construction Materials Pacific, LLC on the revised National Labor Relations Board (NLRB) framework for responding to union organizing
In August 2023, the NLRB issued a decision in Cemex Construction Materials Pacific, LLC announcing a new framework for determining when employers are required to bargain with unions without a representation election. The decision attempted to avoid reinstating the long-defunct and controversial Joy Silk doctrine, but it held that when employers refuse union demands for automatic recognition but then allegedly commit unfair labor practices prior to an election, they may be ordered to recognize and bargain with the union anyway. The burden also shifts to the employer to file for an election rather than the union; failure to file such a petition will result in an order to commence collective bargaining.
The Ninth Circuit panel was split over Cemex’s argument that the NLRB improperly deviated from US Supreme Court precedent on the board’s power to require employers to bargain. In NLRB v. Gissel Packing Co., the Supreme Court held that the NLRB retains the authority to force an employer to bargain with the union even when the union no longer possesses a majority of employees at the time of the bargaining order. The lawyers representing Cemex argued that Gissel ought to be considered the law of the land.
In February, the U.S. Chamber of Commerce and other business groups backed Cemex in a coalition amicus brief.
GOP Lawmakers Request Clarity on WOTUS Rule
On Thursday, Republican members of the House Transportation and Infrastructure Committee sent a letter to Environmental Protection Agency (EPA) Administrator Michael Regan and Assistant Secretary of the Army for Civil Works Michael Connor regarding the implementation of the Biden administration’s “waters of the United States” rule. The most recent rule was updated following the Supreme Court’s Sackett ruling. The letter charges the two agencies with failing to adhere to Sackett, in addition to failing to provide “adequate direction” to regulated communities. Signatories of the letter, including Committee Chair Sam Graves (R-Mo.) and Subcommittee on Water Resources and Environment Chair David Rouzer (R-N.C.), are requesting additional information from the EPA and Army Corps, such as copies of written instructions, talking points, technical documents, guidance documents, memoranda of understanding, or memoranda of agreement referring or relating to the implementation of the definition of WOTUS since the Supreme Court’s Sackett decision.
Congressional Democrats Urge DHS Leadership to Address Worker Permit Backlog
A group of bicameral Democratic lawmakers have sent a letter to Secretary of Homeland Security Alejandro Mayorkas and U.S. Citizenship and Immigration Services (USCIS) Director Ur Jaddou urging USCIS to prioritize “eliminating” its backlog of unprocessed applications for work permits by the end of the year. According to the letter, more than 900,000 immigrants seeking their first work permits and half a million looking to renew their employment authorization documents (EAD) remain “at the mercy of USCIS’s bureaucratic processing delays.”
In FY2024, Congress appropriated $34 million for USCIS to reduce its work permit processing backlog—a historically-high number for the single purpose. In the letter, lawmakers call on DHS to redirect additional supplemental resources appropriated by lawmakers to EAD processing. The signatories also called on USCIS to dedicate additional resources to providing on-the-ground assistance with completing EAD applications.
Furthermore, lawmakers called on USCIS to finalize an agency rule that would lengthen the automatic extension period for expiring work permits. In April, USCIS issued a temporary rule extending the automatic extension period for certain EAD renewal applicants from up to 180 days to up to 540 days. Finally, lawmakers advised USCIS to permit the receipt provided after submission of an EAD application to temporarily serve as a provisional permit to work until the full application is adjudicated.
Senators Urge Agency Heads to Release Supplemental H-2B Visas
Last week, a bipartisan group of 40 senators led by Sen. King sent a letter to Secretaries Su and Mayorkas urging them to direct DOL and DHS to release the maximum allowable number of supplemental H-2B visas for FY25. Specifically, the letter encourages the two agencies to “promptly promulgate a temporary final rule for FY 2025 along the same lines as the FY 2024 rule.” The senators also mention that Congress has “acknowledged this seasonal labor shortage by providing DHS with the authority to lift the H-2B visa cap for each of the past eight fiscal years.”