Injunction Stalls Overtime Rule: 42 Million Hurry Up & Wait

By: Rachel Dickey & Darryl Durham 

As most Louisville businesses are aware by now, the Department of Labor added a new rule to the Fair Labor Standards Act, doubling the salary threshold for overtime pay from $23,660 to $47,476. Under the proposed rule, employees who are paid $47,476 or less must be paid time and a half for any overtime, unless they come within a special exception to the rule.  That gives employers a couple of options: 1) pay time and half for overtime hours; 2) raise the employee’s pay to an amount over the threshold to avoid paying overtime; 3) limit the employee’s hours to 40 hours per week; or 5) some combination of the above.

This proposed change, which was to go into effect December 1, 2016, impacts over 4.2 million employees across the United States.  

However, the rule was recently challenged in State of Nevada et al v. U.S. Department of Labor, and an emergency preliminary injunction was granted in the case on November 22, 2016, by Judge Amos Mazzant of the Eastern District of Texas.

This injunction hits the pause button on the rule's roll out in all fifty states, even those who were not among the 21 states who joined as plaintiffs.  The Department of Labor’s website indicates that they “strongly disagree with the decision by the court” and insist that the “Overtime Final Rule is the result of a comprehensive, inclusive rule making process.” 

On December 1st, the Department of Justice, on behalf of the Department of Labor, filed a notice to appeal the preliminary injunction and made a motion to expedite the appeal, which was granted.    

For now, employers and employees across Kentucky can well… hurry up and wait.  However, your Louisville business should still be putting a plan in place, should the injunction be lifted.  

Real Estate Law Practice Tips

Tips from Jim Lobb
An Excerpt from BAR briefs MAGAZINE

Shareholder James T. Lobb (better known as Jim), was recently named Best Lawyers'® 2017 Louisville Real Estate "Lawyer of the Year."   Jim recently contributed real estate practice tips for the Louisville Bar Association's October 2016 BARbriefs Magazine.  In case you missed it, here is the excerpt:

Urge your client to let you review all surveyor and environmental consultant work contracts before your client signs them.

Most consultant work contracts limit the consultant's malpractice liability to the lessor of (i) a small, arbitrarily determined dollar amount or (ii) the amount that your client actually pays the consultant for the work. 

Reputable consultants should carry errors and omissions insurance.  If they don't, then your client shouldn't use them.  If they do, they should be willing to increase their potential malpractice liability to the lessor of (i) the actual harm caused by their negligent acts or (ii) the full amount of their errors and omissions policy (or at least a much higher, arbitrarily determined dollar amount).  Most consultants will make this change to their work contract if you ask.  If they won't, again, your client shouldn't use them.

Make sure the contract requires the consultant to give third-party reliance letters at a reasonable rate.

And make sure your client owns or has a license in the work product that requires the consultant to produce the most current completed version of its work product, and allows the client to use that version of the work product to finish the job, if the consultant and the client have a falling out.