Nevada v. U.S. Dep't of Labor

321 F. Supp. 3d 709
CourtDistrict Court, E.D. Texas
DecidedMarch 19, 2018
DocketCivil Action No. 4:16–CV–00731
StatusPublished

This text of 321 F. Supp. 3d 709 (Nevada v. U.S. Dep't of Labor) is published on Counsel Stack Legal Research, covering District Court, E.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nevada v. U.S. Dep't of Labor, 321 F. Supp. 3d 709 (E.D. Tex. 2018).

Opinion

AMOS L. MAZZANT, UNITED STATES DISTRICT JUDGE

Before the Court is Non-Party Chipotle Mexican Grill, Inc. and Non-Party Chipotle Services, LLC's (collectively "Chipotle") Motion for Contempt (Dkt. # 89). After reviewing the relevant pleadings and motion, the Court finds that the motion should be granted.

BACKGROUND

Congress passed the Fair Labor Standards Act ("FLSA") in 1938. The FLSA mandates that employees earn no less than the federal minimum wage for every hour worked. Employees must also earn one and one-half times their regular pay for each hour worked beyond a forty-hour week. When enacted, the FLSA had several exemptions to the overtime requirement. Specifically, anyone employed in a bona fide executive, administrative, or professional capacity was exempt from the minimum wage and overtime requirements. 29 U.S.C. § 213. This is often referred to as the "white collar" or "EAP" exemption.

At passage, Congress did not define "bona fide executive, administrative, or professional capacity." 29 U.S.C. § 213. Rather, the FLSA empowered the Secretary of Labor to define these terms through regulations. The Secretary of Labor further permitted the Department of Labor (the "DOL") to issue regulations interpreting the EAP exemption.

In March 2014, President Obama directed the DOL to revise the FLSA's overtime exemption for "executive, administrative, and professional employees." Memorandum on Updating and Modernizing Overtime Regulations, 2014 DAILY COMP. PRES. DOC. 201400165 (Mar. 13, 2014). The DOL

*714announced its plan to revise Code of Federal Regulations Title 29 Part 541 to increase exempt employees' salaries from $455 per week ($23,660 annually) to $921 per week ($47,892 annually) (the "Final Rule"). Soon after, a collection of states ("State Plaintiffs") filed suit against the DOL, the DOL's Wage and Hour Division, and their agents, challenging the validity of the Final Rule. On October 12, 2016, the State Plaintiffs moved for emergency preliminary injunctive relief. The Court issued a preliminary injunction against the Final Rule on November 22, 2016, holding the DOL likely lacked statutory authority to enact the Final Rule and the Final Rule would cause irreparable harm if implemented on December 1, 2016 (the "Court's Order" or the "Injunction"). The Court's Order read as follows:

[T]he Court has authority to enjoin the Final Rule on a nationwide basis and decides that it is appropriate in this case, and therefore GRANTS the State Plaintiffs' Emergency Motion for Preliminary Injunction (Dkt. # 10).
Therefore, the Department's Final Rule described at 81 Fed. Reg. 32,391 is hereby enjoined. Specifically, Defendants are enjoined from implementing and enforcing the following regulations as amended by 81 Fed. Reg. 32,391 ; 29 C.F.R. §§ 541.100, 541.200, 541.204, 541.300, 541.400, 541.600, 541.602, 541.604, 541.605, and 541.607 pending further order of this Court.

(Dkt. # 60 at pp. 19-20) (emphasis in original).1 Six months later, Carmen Alvarez ("Alvarez") sued Chipotle under the FLSA and New Jersey State Wage and Hour Law, alleging Chipotle ignored the Final Rule by not paying her proper overtime wages. Alvarez claimed to bring suit on behalf of herself and others "similarly situated" so as to certify an FLSA collective action and class action under Federal Rules of Civil Procedure 23(a) and (b)(3). Alvarez's counsel-Joseph Sellers ("Sellers") and Miriam Nemeth ("Nemeth") of Cohen Milstein Sellers & Toll PLLC, Justin Swartz ("Swartz") and Melissa Stewart ("Stewart") of Outten & Golden LLP, and local counsel Glen Savits ("Savits") (the "Lawyers")-acknowledged the Injunction in Alvarez's complaint but stated it did not apply to them or to their client:

32. Although it preliminarily enjoined the Department of Labor from implementing and enforcing the Overtime Rule, the Eastern District of Texas did not stay the effective date of the Rule or otherwise prevent the Rule from going into effect. Therefore, as a rule duly promulgated pursuant to the requirements of the APA, the Rule went into effect on December 1, 2016.
33. Because the Eastern District of Texas's preliminary injunction was limited to implementation and enforcement of the Overtime Rule by the Department of Labor and its officials, it did not affect the ability of persons not party to the Nevada case, including Plaintiff and similarly situated employees, to bring private lawsuits pursuant to the FLSA's *715private cause of action, 29 U.S.C. § 216(b), to enforce their right to overtime pay under the Rule, nor did it prevent non-parties from bringing lawsuits under state law.

(Dkt. # 89, Exhibit 1 at pp. 13-14). This is the second lawsuit in which one of Alvarez's counsel-Swartz-has argued that this Court's Injunction of the Final Rule does not apply to him or to his client. In the United States District Court for the District of Massachusetts, Swartz also ignored this Court's Order2 :

107. On November 22, 2016, the United States District Court for the Eastern District of Texas issued an injunction in Nevada v. United States Dep't of Labor , No. 16 Civ. 731[ 218 F.Supp.3d 520, 533-34,] 2016 WL 6879615, at *9 (E.D. Tex. Nov. 22, 2016) that enjoined only the U.S. Department of Labor from "implementing and enforcing" the amended versions of, inter alia , 29 C.F.R. §§ 541.100 and 541.200.3

(Dkt. # 89, Exhibit 1 at p. 205). On August 1, 2017, Chipotle filed its Motion for Contempt against Alvarez and the Lawyers (collectively "Respondents") (Dkt. # 89). On August 2, 2017, Chipotle filed a Motion for Judicial Notice regarding its Motion for Contempt (Dkt. # 96).

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Bluebook (online)
321 F. Supp. 3d 709, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nevada-v-us-dept-of-labor-txed-2018.