The United States District Court for the Eastern District of Texas invalidated the increase in the Fair Labor Standards Act (FLSA) salary basis rule for administrative, executive, and professional employees. The Bureau of Labor Statistics (BLS) reported that in 2023 workplace illnesses and injuries declined. The National Labor Relations Board (NLRB) ruled that the National Labor Relations Act (NLRA) was violated when an employer forced employees under threat of discipline or discharge to attend a meeting during which it expressed its views on unionization

Court Invalidates FLSA Overtime Rule – The United States District Court for the Eastern District of Texas ruled that the Department of Labor (DOL) exceeded its authority when it enacted a rule increasing the salary basis threshold for administrative, executive, and professional employees to be exempt from the Fair Labor Standards Act (FLSA). In finding that the DOL exceeded the authority delegated to it by Congress, the court in the case of State of Texas et al. v. US Department of Labor stated the “2024 rule effectively eliminates consideration of whether an employee performs bona fide executive, administrative, or professional capacity duties in favor of what amounts to a salary-only test.” As a result of this decision, the salary basis threshold reverts to $35,568 per year, the amount in place prior to July 1^st.

The DOL promulgated a rule that increased the FLSA salary basis threshold for administrative, executive, and professional employees from $35,568 per year to $43,888 per year effective on July 1^st and to $58,656 per year effective on January 1, 2025. When the rule was fully implemented, it was estimated that an additional 4 million workers would be entitled to overtime. The rule also would automatically adjust the salary basis test every three years starting on July 1, 2027. Separate cases were brought by the State of Texas and several trade associations and businesses contending that the increases exceeded DOL’s authority under the FLSA. The District Court previously granted a preliminary injunction in favor of the State of Texas and consolidated the cases.

According to the District Court, this exemption requires that duties and not salary be the determinative factor. In granting summary judgment, the District Court found that nothing in the FLSA “allows the Department to make salary rather than an employee’s duties determinative of whether a bona fide executive, administrative, or professional capacity employee should be exempt from overtime pay.” The District Court noted that the adjustment to the salary basis threshold represented a 65% increase. The District Court cited a United States Supreme Court decision which stated, “It’s their duties and not their dollars that really matter.” The District Court decided that it was appropriate to nullify and revoke the rule since it “impacts millions of employees in every facet of the economy, as well as state and local governments, and will impose billions in costs to employers.”

Workplace Injuries Decline  - The Bureau of Labor Statistics (BLS ) issued the 2023 Survey of Occupational Injuries and Illnesses that found the 2023 rate of recordable workplace injuries and illnesses fell to its lowest level since 2003. Private industry non-fatal injuries and illnesses decreased by 8.4% from 2022. Douglas Parker, U.S. Department of Labor’s Assistant Secretary for Occupational Safety and Health stated, “our formula of strong enforcement combined with collaboration between government, labor, and the private sector to make workplace safety and health as a core value is making a difference in the lives of American workers.”

According to the BLS, an almost 57% reduction in illnesses was the primary reason for the positive report. The major decrease was in respiratory illness cases, which declined to 100,200 cases. The incidence rate of illnesses decreased in 2023 to 19 cases per 10,000 full-time employees (FTE) from 45.2 in 2022. Respiratory illnesses occurred at the rate of 9.5 cases per 10,000 FTEs, a reduction from 35.8 cases per 10,000 FTEs in 2022. The BLS noted there was a 20% reduction in nonfatal injuries and illnesses involving days away from work in 2023 as compared to 2022. No private industry sectors reported an increase in total cases or incidence rates in 2023.

NLRB Rules Against Captive Audience Meetings – The National Labor Relations Board (NLRB) ruled that Section 8(a)(1) of the National Labor Relations Act (NLRA) was violated when an employer forced employees under threat of discipline or discharge to attend a meeting during which it expressed its views on unionization. The NLRB in the case of Amazon.com Services LLC  overruled a previous 1948 decision in Babcock & Wilcox ruling that an employer interferes with the decision of employees whether to exercise their rights under the NLRA “when it compels employees to attend a captive-audience meeting on pain of discipline or discharge.” NLRB Chairman Lauren McFerran stated, “Today’s decision better protects workers’ freedom to make their own choices in exercising their rights under the Act, while ensuring that employers can convey their views about unionization in a noncoercive manner.”

The NLRB applied its decision prospectively believing that this “will sufficiently promote the policies of the Act by placing employers on notice that captive-audience meetings are no longer permissible while giving appropriate weight in this case and in other pending cases to the reliance employers have reasonably placed on the long-standing holding of Babcock & Wilcox.”

A group of Amazon employees formed a labor union and began a campaign to organize employees at two fulfillment and storage centers in New York. Amazon held a series of mandatory meetings to dissuade employees from signing union authorization cards and voting for union representation. The NLRB believed that the captive audience meetings interfered with the right of employees to decide whether to form a union. While Section 8(c) of the NLRA allows employers to communicate their views on unionization, the NLRB stated, employers should take such steps as informing employees in advance of the reason for the meeting, that attendance is voluntary, there will be no adverse consequences for skipping the meeting, and no meeting attendance records will be kept. The NLRB concluded that neither the NLRA nor the First Amendment gives employers the right to conduct captive audience meetings nor “authorize employer coercion in the labor relations setting.”

Neil Reichenberg is the former executive director of the International Public Management Association for Human Resources. He is an attorney, a frequent writer and speaker on public policy and human resource issues and was an adjunct faculty member at George Mason University. For questions or additional information, contact Reichenberg at neilreichenberg@yahoo.com.

Related Learning and Resources