Archives for November 2016

New Overtime Rule Blocked by Federal Judge

In a surprising decision, a judge in the U.S. District Court for Texas not only granted an injunction to 21 plaintiff states that sued to block the U.S. Department of Labor’s overtime updates set to take effect December 1, 2016, he applied his ruling to all 50 states. The result is that, at least for now, employers in Massachusetts need not update pay scales. As long as executive, administrative or professional employees make at least $455/week — the minimum pay requirement now in effect — they will remain exempt from overtime pay requirements.

Judge Amos Mazzant reasoned that the Department of Labor (DOL) could not update the minimum salaries for executives, et. al., because Congress clearly intended the exemption to turn on a duties and not a salary test. Each of the three affected categories or workers carries with it specific criteria for determining applicability, commonly referred to as duties tests. While Judge Mazzant called the Congressional intent in this regard to be so clear that it blocks the DOL from increasing the minimum salary requirement, he did not address the question why or how a DOL regulation has, apparently properly, for years included a minimum salary component for executive, administrative and professional worker overtime exemptions. Indeed, the new DOL rule that was to take effect December 1 seeks to update the minimum salary from $455 to $913 weekly and to implement an automatic pay adjustment mechanism going forward. The court’s November 21, 2016 decision in State of Nevada v. U.S. Department of Labor leaves the old threshold in place.

Aggressive Noncompetition Suit in Massachusetts

Our client was a salesperson who was forced to defend herself against an aggressive noncompetition suit brought by her former employer, from which she resigned after many years due to work rule changes that made it impossible for her to perform her job effectively. During the course of her work, our client signed several iterations of the company’s restrictive covenants. Though the most recent was about six years old and numerous job changes had occurred since it was signed, the employer filed a suit to enforce the form agreement. It accused our client not only of soliciting its customers but of stealing its confidential information. The company sought an emergency injunction in the superior court to block our client from performing work for her new employer.

Result:  We persuaded the court to reject the injunction, and the plaintiff quickly dismissed its lawsuit voluntarily. We worked closely with counsel for our client’s new employer to present a clear and concise factual record demonstrating that she had neither taken confidential information nor interfered with her former employer’s business contracts. Advance planning was critical to our defense – we had our client turn over to us for safe keeping cell phones and other electronic devices to ensure the plaintiff could not effectively argue she retained copies of customer data on them.