Federal Court Rules Salary Threshold Hike for White Collar Overtime Exemptions Won’t Ring in the New Year

By Kayla M. Jacob, Philip Giorlando, and Fred Preis

On November 15, 2024, a Federal District Court in Texas blocked, nationwide, the U.S. Department of Labor's April 2024 final rule, which sought to increase the salary threshold for white-collar exemptions under the Fair Labor Standards Act.

Under the now-quashed DOL rule, 'white collar' employees in administrative, executive, or professional positions would have had to meet progressively higher salary thresholds to maintain their overtime exemption, with the thresholds set to increase every three years.

The first increase, which took effect in July 2024, raised the salary threshold from the 2019 rate of $684 per week ($35,568 annually) to $844 per week ($43,888 annually). A second increase, scheduled for January 1, 2025, would have raised the salary threshold to $1,128 per week ($58,656 annually).

The Federal District Court’s ruling halts the planned January increase and unwinds the July 2024 increase. The court found that the DOL exceeded its authority by setting such high salary requirements, creating a de facto salary-only test for white-collar exemptions, and ignoring other key criteria like the requirement to perform exempt duties.

The Court also found that the DOL could not implement the proposed three-year renewal increases without following the procedural requirements outlined in the Administrative Procedure Act.

What’s Next?

Tis’ the season for change. With the court's ruling, the July 2024 increase is vacated, and the proposed January increase will not take effect. It remains unclear whether this lower-court decision will stand or be overturned if the Biden Administration even has time to appeal to the U.S. Fifth Circuit Court of Appeals in New Orleans. Moreover, additional changes may be on the horizon as we transition from the Biden to the Trump White House administration.

While it may be tempting to act quickly to rescind pay adjustments resulting from the July 2024 threshold change, employers should consult legal counsel to determine the best course of action.

Hush, Employers, Don’t Say a Word: NLRB Ends Captive Audience Meetings

By Kayla M. Jacob and Fred Preis

Once again, the National Labor Relations Board chills employers' efforts to address unionization in the workplace. On November 13, 2024, the Board upended 76 years of precedent, ruling that mandatory captive-audience meetings are now unlawful.

Captive-audience meetings are used by employers to express their views on unionization efforts and highlight the potential unintended consequences, including the adverse effects, of unions in the workplace. Now however, the Board contends that mandating employee attendance at captive-audience meetings has a tendency to interfere with and coerce employees in the exercise of their rights under the National Labor Relations Act. Although the Board provides a narrow exception to when such meetings may be allowed, it is clear that employer-sponsored meetings to express anti-union views now tread a slippery slope.

This decision echoes the Board’s recent trend of significantly limiting employers' communications with workers during unionization efforts. However, this decision may be short-lived as it will certainly be appealed and possibly reversed by an Appellate Court. Additionally, the Trump Administration will likely revert back to a more employer-friendly regulation. It is unclear how long it will take to undo the Board’s recent ruling. For now, although employers must comply with the Board’s decision and proceed under the assumption that captive-audience meetings are improper, there are numerous alternative methods for businesses to communicate legally to workers about unions. However, the best method is to develop and implement a legal preventive maintenance program immediately.

Don't Violate Louisiana's Governmental Ethics Laws This Holiday Gift-Giving Season When It Comes to Public Employees

By Richard G. Passler

It is that time of the year again – governmental ethics violations when gift giving to public employees. Louisiana’s governmental ethics laws significantly restrict – in fact, virtually eliminate – the giving of gifts to public employees from businesses in the private sector that do business with them. That innocent holiday gift is actually against the law. Simply put, when it comes to gift-giving and governmental ethics, they simply do not mix.

Louisiana law prohibits a public employee from being given “anything of economic value” by anyone seeking a contractual, business, or financial relationship with the public servant’s agency or anyone who is seeking to influence the passage or defeat legislation by the public servant’s agency. This means that traditional gift baskets of Louisiana spices, pecans, wine, or any other product is a violation of the governmental ethics law if the giver has a business relationship with the public employee’s agency. It is not only a violation of the ethics law to give a public employee such a gift; rather, the public employee’s acceptance of the gift also violates Louisiana’s governmental ethics law.

Practically, the only thing that a person or company can give to a public employee with whom they have a contractual business or financial relationship is a greeting card; or a calendar or pen that does not have any resale value. But you can give your child’s teacher a nominal gift. You can also pay for a public employee’s meal as long as its value does not exceed $79.00 and you are dining with them.

But he/she is my friend! The standard excuse for violating the governmental ethics laws during the holiday season. Louisiana’s governmental ethics laws do not recognize this excuse as a defense to a violation. Simply put, friendship – no matter how close – does not matter.

Businesses need to keep in mind that they can probably not give the gift they may want to give to a public employee. Always check with legal counsel.

Otherwise, for each gift you give in violation of the governmental ethics laws you face a $10,000.00 fine and possible criminal charges. As for the recipient, the penalty can be all of those penalties and forfeiture of the gift. For both, the giver and receiver, the penalty always includes a public sanction – which could affect the giver’s ability to do business in the future in the State of Louisiana and, for the recipient, could be detrimental to their future success.