Tag: Upholds

  • Judge Upholds Biden-Era Gainful Employment Rule

    Judge Upholds Biden-Era Gainful Employment Rule

    A federal judge rejected an effort to overturn the gainful-employment rule, which was put in place during the Biden administration.

    In an opinion issued Thursday, Judge Reed O’Connor from the Northern District of Texas sided with the Education Department on every point. One of the plaintiffs, a trade association representing cosmetology schools, had argued in its lawsuit that the regulations jeopardized the “very existence” of cosmetology schools and used flawed measures to determine whether graduates of career education programs are gainfully employed.

    Under the rules, for-profit and nondegree programs have to prove that their graduates can afford their loan payments and earn more than a high school graduate. Those that fail the tests in two consecutive years could lose access to federal financial aid. The regulations also included new reporting requirements for all colleges under the financial value transparency framework. 

    The lawsuit started under the Biden administration, and Trump officials opted to defend the regulations in court and urged the judge to keep the rules in place. 

    Similar gainful-employment rules survived a legal challenge in 2014 but were ultimately scrapped by the first Trump administration. However, in recent years, lawmakers on both sides of the aisle have become more interested in finding ways to hold colleges accountable for their students’ career outcomes. Under legislation that Congress passed this summer, most college programs will have to pass a similar earnings test. How the Education Department carries out that test will be subject to a rule-making process set to kick off later this year.

    Jason Altmire, president and chief executive officer of Career Education Colleges and Universities, which represents the for-profit sector and opposed the Biden rule, said in a statement that he looks forward to revisiting the issue during the rule-making process.

    “We are confident the Biden Gainful Employment Rule will be revised to incorporate a fairer accountability measure that will apply equally to all schools, ensuring all students can benefit,” he said. “We look forward to a full consideration of these issues during the months ahead.”

    Dan Zibel, vice president of the legal advocacy group Student Defense, applauded the court ruling in a statement. 

    “Higher education is supposed to offer students a path to a better life, not a debt-filled dead end,” he said. “The 2023 Gainful Employment Rule reflects a common-sense policy to ensure that students are not wasting time and money on career programs that provide little value.”

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  • Appeals Court Upholds DOL’s Authority to Use Minimum Salary Threshold to Determine Overtime Exemptions

    Appeals Court Upholds DOL’s Authority to Use Minimum Salary Threshold to Determine Overtime Exemptions

    by CUPA-HR | September 12, 2024

    On September 11, the 5th U.S. Circuit Court of Appeals issued a ruling in Mayfield v. U.S. Department of Labor that upholds DOL’s authority to implement a minimum salary threshold to determine exempt status under the Fair Labor Standards Act (FLSA) overtime pay requirements. While the ruling does not answer how other lawsuits challenging the Biden administration’s rule will be decided, the ruling is significant and could help other federal judges determine whether or not to strike down the Biden administration’s increased minimum salary thresholds.

    Background

    The case’s plaintiff, Robert Mayfield, filed a lawsuit against the Trump administration’s overtime rule in August 2022. In his lawsuit, he argued that the FLSA language on overtime exemptions only mentions a worker’s job-related duties and that implementing a salary threshold to determine exempt status exceeds DOL’s statutory authority. The Western District Court of Texas, a lower court where the lawsuit was originally filed, sided with DOL, stating that the agency has the statutory authority to implement the FLSA overtime minimum salary threshold. Mayfield appealed the decision to the 5th Circuit soon after.

    The Decision

    In its decision that sides with the Department of Labor, the 5th Circuit Court held that DOL may use a minimum salary requirement as part of its test for determining whether or not an employee qualifies as an executive, administrative and professional (EAP) employee exempt from the FLSA overtime pay requirements. Notably, the 5th Circuit Court argued that DOL does have statutory authority under the FLSA to use a salary threshold to “define and delimit the terms of exemption.”

    Though the decision allows for DOL to use a minimum salary threshold, the 5th Circuit Court did state that there is a limit to the power granted to DOL to do so. Specifically, the decision states that DOL may only use the minimum salary requirement to the extent that the salary threshold established in the regulations is a reasonable proxy for who is and who is not an EAP employee. They argued that DOL’s power to rely on proxy is not “unbounded” and that the agency “cannot enact rules that replace or swallow the meaning” of the FLSA’s terms that they seek to define.

    Looking Ahead

    Outside of the Mayfield case, there are three pending lawsuits in the Eastern District Court of Texas to challenge the Biden administration’s overtime final rule. That rule implements a two-phase approach to increasing the minimum salary threshold under the FLSA. The first increase took effect on July 1, increasing the minimum salary threshold from the current level of $684 per week ($35,568 per year) to $844 per week ($43,888 per year), and the second increase is set to take effect on January 1, 2025, increasing the minimum salary threshold again to $1,128 per week ($58,656 per year).

    The decision from the 5th Circuit does not have an immediate impact on the lawsuits challenging the Biden administration’s overtime rule, nor does it provide a definitive answer on how lower courts decide in those legal challenges. As such, the Biden administration’s July 1 salary threshold continues to be in effect,* and the second increase to the salary threshold is still set to take effect on January 1, 2025. CUPA-HR will keep members apprised of additional updates related to the FLSA overtime pay regulations.

    *A preliminary injunction to block DOL from enforcing the overtime final rule was placed for public employees in the state of Texas. Private institutions in Texas and all other institutions outside of Texas need to be in compliance with the July 1 salary threshold.



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  • Supreme Court Blocks OSHA Vaccine and Testing ETS and Upholds CMS Healthcare Worker Vaccine Mandate – CUPA-HR

    Supreme Court Blocks OSHA Vaccine and Testing ETS and Upholds CMS Healthcare Worker Vaccine Mandate – CUPA-HR

    by CUPA-HR | January 14, 2022

    On January 13, the U.S. Supreme Court blocked enforcement of the Occupational Safety and Health Administration (OSHA)’s Emergency Temporary Standard (ETS) that would mandate vaccines or testing requirements for employers with 100 or more employees, but reinstated enforcement of the Centers for Medicare and Medicaid Services (CMS)’s mandate that would require COVID-19 vaccinations for healthcare workers working at facilities that participate in Medicare and Medicaid.

    In December, the U.S. Court of Appeals for the 6th Circuit vacated the 5th Circuit Court’s nationwide emergency motion to stay the OSHA ETS, paving the way for OSHA to continue enforcement of the ETS vaccine and testing requirements. The decision led several business groups and Republican-led states to file emergency applications with the Supreme Court seeking to reinstate the stay. The Supreme Court heard oral arguments on the OSHA mandate on January 7, leading to the court’s decision to block the vaccine and testing mandate.

    Additionally, the Supreme Court heard oral arguments on the CMS healthcare worker mandate on January 7. They ultimately ruled in favor of allowing the CMS healthcare worker vaccine mandate to take effect while the mandate is being litigated in several U.S. district courts and circuit courts. The CMS mandate was previously stayed in 25 states after four lawsuits were filed against CMS in district courts in Missouri, Louisiana, Florida and Texas.

    Though not heard or ruled on by the Supreme Court, the federal contractor vaccine mandate, which requires all federal contractors to mandate COVID-19 vaccinations for their employees, remains stayed by the U.S. District Court for the Southern District of Georgia, which issued a nationwide preliminary injunction against the mandate on December 7. The Biden administration has appealed the decision to the 11th Circuit Court, which has since upheld the lower court’s injunction but has not yet ruled on the legal merits of the mandate. Litigation continues for this rule in the 11th Circuit Court.

    The Supreme Court’s decisions bring the rules back to the lower courts to continue litigation on their merits; however, the recent decisions do signal how the Supreme Court would likely rule on the merits of the cases if they are once again appealed to the higher court.

    CUPA-HR will continue to keep members apprised of any legal updates as they relate to the fate of the OSHA ETS, the CMS healthcare vaccine mandate, and the federal contractor vaccine mandate.



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