Biden-era worker protections are on shakier ground after Supreme Court ruling
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Just hours after a Supreme Court decision gutted the power of federal agencies, a judge in Texas blocked the Labor Department from expanding overtime protections for workers.
Why it matters: Biden-era rules protecting workers seem less likely to succeed in the wake of the high court's decision in Loper Bright Enterprises v. Raimondo, which overturned what's known as the "Chevron deference" doctrine.
Catch up quick: If a worker is paid a salary over a certain minimum threshold and primarily performs executive or professional duties, they don't qualify for overtime pay.
- Currently, that minimum salary is $35,568 a year. A new rule from the Department of Labor was set to raise the threshold to $43,888 on July 1, and then to $58,656 in 2025.
Zoom in: But on June 28, the same day Loper was decided, a Texas judge ruled the Labor Department likely exceeded its authority — citing the Loper ruling — and temporarily halted the rule from going into effect in the state.
- It's the first ruling to apply the Supreme Court's decision, according to an analysis from law firm Jackson Lewis.
Zoom out: The decision only applies to Texas, and the rule did go into effect on July 1 nationwide.
- But there are two more similar cases on deck — and they might go the same way.
The other side: The Labor Department "is confident that the overtime rule is consistent with [its] authority under the Fair Labor Standards Act," said spokesperson Jacob Andrejat.
Meanwhile: The future of the Federal Trade Commission's ban on noncompete agreements is also looking dicey.
- Last week, another Texas judge issued a temporary order preventing the rule from going into effect in the state.
- He didn't cite Loper, but the agency's ban is also being challenged in another courtroom, this time in Philadelphia on Wednesday — and it could come up, says Thomas Muccifori, a partner at law firm Archer & Greiner.
- The decision should lead the judge to prevent the rule from going into effect, he says — though it's unclear if she'll go that way, given that the judge is a Biden appointee.
- "The FTC stands by our clear authority, supported by statute and precedent, to issue this rule," Douglas Farrar, an agency spokesperson, said in a statement.
The big picture: Employers are confused, says Muccifori. Some of his clients, uncertain about the future of noncompetes, are already looking at alternative options like nondisclosure agreements.
- Meanwhile, some states are moving to ban noncompetes altogether — and their ability to do so hasn't been challenged.
The bottom line: It'll take a long time for these cases to wind their way through the courts, but the Supreme Court's ruling is already shaking up the work world.
