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Defendant Seeks Contempt Order in DOL Overtime Exemption Rule Lawsuit

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Defendant Seeks Contempt Order in DOL Overtime Exemption Rule Lawsuit

August 4, 2017
On August 1, Chipotle Mexican Grill, Inc. sought a contempt order against the employees and their lawyer that are suing the company over the Department of Labor Overtime Exemption rule. The case is a class action that was brought by Chipotle employees alleging that that DOL Overtime Exemption rule did go into effect on December 1, 2016, despite the injunction issued against the rule by a federal court in Texas in November 2016. (See WICs article, "Employees Claim Overtime Rule is in Effect," June 12, 2017.) Chipotle is seeking a contempt finding against the plaintiffs in the case, saying that the plaintiffs "intentionally disregarded" the injunction order that prohibits the DOL from implementing the rule. The plaintiffs argued that the injunction order did not affect the ability of people outside of Texas from bringing private causes of action against employers. Chipotle countered by saying that "The order’s purpose in enforcing a nationwide injunction was to protect both employees and employers from being subject to differing standards determinative of FLSA exemptions." Chipotle further argued that a finding of contempt is appropriate because the plaintiff's lawyer actively assisted her client in violating a court order. The law firm representing the plaintiffs said that Chipotle chose to mount a "frivolous attack" by seeking the contempt order rather than defending itself on the merits of the case. 
 
The case will continue to play out, but may become mooted as the DOL has announced that it intends to revisit the overtime exemption rule. If the employees in this case are successful in arguing that the rule was in effect from December 2016 until such time as new regulatory action occurs, it would have a significant impact on any employer who relied on the injunction order. However, since the injunction was issued, it has been generally accepted that the rule was suspended and did not go into effect. To date, no court has ruled otherwise.