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On November 15, 2024, a United States Eastern District Court in Texas struck down a 2024 Department of Labor (DOL) rule that would have made four million previously exempt workers eligible for overtime by 2025. In an action brought by the State of Texas and a coalition of business associations, the court held that the DOL exceeded its statutory authority under the Fair Labor Standards Act of 1938 (FLSA) by effectively reclassifying these employees as non-exempt based on their salaries without considering their job duties.  

The FLSA requires payment of overtime to employees working more than forty hours in a week but exempts certain executive, administrative, and professional employees. Under the FLSA, the DOL must periodically define and delimit which workers fall under these exemptions. In 1940 the DOL introduced a three-part test, which is still in place today, to determine whether an employee is overtime exempt: (1) the employee must be paid a predetermined, fixed salary; (2) the salary must be at a weekly rate above a minimum threshold set by the DOL; and (3) the employee must have executive, administrative, or professional job duties. The 2024 rule scheduled three increases to the minimum salary threshold, which previously was $684 per week: $844 on July 1, 2024; $1,128 on January 1, 2025; and automatic increases every three years starting in July 2027.Continue Reading Texas District Court vacates DOL rule expanding overtime eligibility

On August 20, 2024, Northern District of Texas Judge Ada Brown barred the U.S. Federal Trade Commission’s (FTC) rule banning non-competes from taking effect. The rule, which proposed to ban virtually all existing and future non-compete agreements across the U.S., and was scheduled to go into effect on September 4, 2024, is now effectively blocked.

Judge Brown reasoned that the FTC’s non-compete ban constituted an unlawful agency action, stating that the FTC lacks the authority to ban practices it deems unfair methods of competition by adopting substantive rules. Specifically, Judge Brown concluded that:

the FTC lacks statutory authority to promulgate the Non-Compete Rule, and that the Rule is arbitrary and capricious. Thus, the FTC’s promulgation of the Rule is an unlawful agency action . . .[The rule] is hereby SET ASIDE and shall not be enforced or otherwise take effect on September 4, 2024, or thereafter.”

Continue Reading Texas federal court strikes down FTC non-compete rule

On February 27, 2024, U.S. District Judge James Wesley Hendrix of the Northern District of Texas, Lubbock Division blocked enforcement of the Pregnant Workers Fairness Act (PWFA) against the state of Texas and its divisions and agencies, finding passage of the PWFA violated the U.S. Constitution’s quorum requirement. Below we discuss the terms of the PWFA, its enactment, and the subsequent legal challenge.Continue Reading Texas federal court blocks enforcement of Pregnant Workers Fairness Act

In October 2023, the National Labor Relations Board issued a final rule that lowered the standard for companies to qualify as joint employers. You can read more about the rule here.

On March 8, 2024, a federal judge in Texas struck down the final rule. U.S. District Judge J. Campbell Barker granted summary judgment in favor of the business coalition that challenged the 2023 rule. In short, the 2023 rule established a two-step test which requires: (1) the entity qualify as a common-law employer of the workers in question, and if so (2) the entity have control over one or more essential terms and conditions of employment. The court agreed with the business coalition’s contention that “the second test is always met if the first test is met, so the rule’s joint employer inquiry has just one step for all practical purposes.” The court found that “if an entity exercises or has the power to exercise control (even indirect control) over at least one essential term, the entity is an employer, jointly with workers’ undisputed employer.” And because such a result “would treat virtually every entity that contracts for labor as a joint employer,” the Board’s 2023 final rule “exceeds the bounds of the common law and is thus contrary to law.”Continue Reading Texas judge vacates NLRB’s new joint employer rule

On November 8, 2021, Governor J.B. Pritzker signed into law an amendment to the Illinois Health Care Right of Conscience Act (the Act) that will prevent employees from relying on the Act to avoid employer COVID-19 vaccine or testing mandates. The amendment goes into effect on June 1, 2022.

Overview of the Illinois Health Care Right of Conscience Act

The Act was first passed in 1977 and was meant to protect from discrimination health care workers who participated in, or refused to participate in, the delivery or receipt of health care services that were “contrary to their conscience.”

Recently, however, some non-health care workers in Illinois have relied on the Act to claim an exemption from their employers’ COVID-19 vaccination or testing requirements based on the Act’s broad language prohibiting discrimination “against any person in any manner” who refuses to “obtain, receive or accept” health care services or medical care. In fact, several lawsuits have recently been filed by employees claiming that their employers’ policies violate the Act.
Continue Reading Illinois limits conscience-based vaccine objections, while other states allow them

Most Texas employers are likely already familiar with Texas Governor Greg Abbott’s Executive Order GA-39 that prohibits state and local governments from requiring (1) individuals to receive a COVID-19 vaccine, or (2) documentation proving vaccine status (that is, “vaccine passports”) as a condition to receive any service or enter any place.

Building upon Executive Order GA-39, on October 11, 2021, Governor Abbott issued Executive Order GA-40 (the Texas EO), which prohibits private employers in Texas from requiring that employees receive a COVID-19 vaccination. Specifically, the Texas EO prohibits any Texas entity from “compel[ling] receipt of a COVID-19 vaccine by any individual, including an employee or a consumer, who objects to such vaccination for any reason of personal conscience, based on a religious belief, or for medical reasons, including prior recovery from COVID-19.” Texas entities that violate the Texas EO can be fined up to $1,000 (it is unclear whether the fine will be per violation). The Texas EO does not create any private cause of action, nor does it call for retroactive application.

The Texas EO creates three bases for employees to object to vaccination: (1) personal conscience; (2) religious belief; and (3) medical reasons. The Texas EO also specifically states that prior recovery from COVID-19 is a valid basis for an individual to object to a COVID-19 vaccine. The objections permitted under the Texas EO go far beyond the religious and medical exemptions to vaccine mandates under Title VII of the Civil Rights Act and the Americans with Disabilities Act, respectively. Moreover, the Texas EO does not contain an undue burden exception or mention any other grounds that would permit an employer to deny an employee’s objection to a mandatory COVID-19 vaccine that is made under the three bases in the Texas EO.Continue Reading Texas executive order restricts mandatory vaccination policies for employers

The Texas Legislature has been quite busy over the most recent regular and two specially-called legislative sessions. It adjourned its second specially-called legislative session on September 2, 2021. Additional bills may be enacted into law if and when Governor Greg Abbott calls a third special session. So far, Governor Abbott has signed into law several bills that may have flown under the radars of many Texas employers. Here’s a brief recap of several new laws that may impact Texas businesses and their workforce.

Expansive new sexual harassment protections

As we noted in prior posts (July 6, 2021 and September 2, 2021), Texas passed several new laws that increase legal protections against sexual harassment. The laws, which went into effect on September 1, 2021, expand liability for sexual harassment to companies with just one employee and to individual supervisors and coworkers. The legislation also lengthens the deadline from 180 days to 300 days for a claimant to file a charge alleging sexual harassment with the Texas Workforce Commission.

Liability shield for Texas businesses from most COVID-19 claims

As we noted in prior posts (July 15, 2021 and August 19, 2021), Texas – along with 18 other states – passed statutory liability protections for businesses against claims arising from the ongoing COVID-19 pandemic. The Pandemic Liability Protection Act (PLPA), which went into effect on June 14, 2021, grants retroactive liability protection for both small and large businesses for claims commenced on or after March 13, 2020. The PLPA does not provide Texas businesses an absolute immunity shield, and claims can still be brought for a pandemic-related injury or death if the business:

  • Knowingly failed to warn of, or to fix, a condition it knew was likely to result in exposure, and the failure to warn or fix was the cause in fact of the exposure; or
  • Knowingly failed or refused to comply with government standards, guidance or protocols that are intended to lower the likelihood of exposure to COVID-19, and the failure or refusal to comply was the cause in fact of the exposure.

As written, the PLPA’s liability shield will continue to protect businesses until Governor Abbott terminates the current COVID-19 pandemic disaster declaration.
Continue Reading Overview of several new workplace laws Texas employers should know about following the recent legislative sessions

On July 6, 2021, we released a blog post on Texas’ new sexual harassment laws, which became effective September 1, 2021. These laws expand liability for sexual harassment to companies with at least one employee and to individual supervisors and coworkers. Our July 6 post discusses the details of the new laws; now that…

On August 11, 2021, Dallas County Judge Clay Jenkins issued an order requiring masks in Dallas County businesses, schools, and county buildings. Judge Jenkins’ order comes on the heels of a Dallas County state court issuing a temporary restraining order of Texas Governor Greg Abbott’s July 29, 2021 order barring mask mandates by local governmental…

The effects of the #MeToo movement for employers continue with Governor Abbott recently signing two new bills into law (effective September 1, 2021) that greatly amplify legal protections against sexual harassment. One bill extends the statute of limitations for sexual harassment claims from 180 days to 300 days. The other opens the door for small employers, and even individual supervisors and coworkers, to be held liable for sexual harassment.  Also, Texas employers must now take “immediate and appropriate corrective action” to avoid liability for sexual harassment. We explain these new laws in more detail below, and discuss steps Texas employers may want to consider before the new laws go into effect.

Statute of limitations lengthened for sexual harassment claims (House Bill 21)

Currently, employees must file a charge of discrimination with the Texas Workforce Commission within 180 days of the alleged harassing conduct. House Bill 21, which Governor Abbott signed into law on June 9, 2021, lengthens the statute of limitations for filing sexual harassment claims from 180 days to 300 days from the date of the alleged harassment. The longer limitations period applies only to sexual harassment claims based on conduct that occurs on or after September 1, 2021. The current 180 day statute of limitations remains unchanged for other types of alleged discrimination (e.g., based on race, age, etc.).

Because the statute of limitations under federal law for sexual harassment claims is 300 days, plaintiffs who miss the 180-day deadline under Texas law were typically only able to pursue their sexual harassment claims in federal court (assuming, of course, they initiated legal proceedings within the 300-day federal deadline). Beginning this fall, those plaintiffs will be able to pursue such claims in either federal or state court. 
Continue Reading Attention Texas employers: Starting September 1, 2021, companies with just one employee—as well as individual supervisors and coworkers—can be liable for sexual harassment