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NCLA Court Victory Sets Aside Biden DOL’s Unlawful Wage and Overtime Exemption Rule
Flint Avenue, LLC v. U.S. Department of Labor, et al.
Washington, D.C., May 05, 2026 (GLOBE NEWSWIRE) -- Today, the New Civil Liberties Alliance agreed to a stipulated dismissal of the government's appeal of our Flint Avenue v. Department of Labor (“DOL”) lawsuit, permanently eliminating a DOL rule that exceeded the agency’s statutory authority. The Rule had set a $58,656 minimum-salary requirement for determining whether “white collar” employees were exempt from the Fair Labor Standards Act’s (FLSA) minimum wage and overtime requirements. In so doing, DOL’s rule would have unlawfully prevented employers, including NCLA’s client, the software company Flint Avenue, LLC, and countless other small businesses, from claiming the exemption for millions of white-collar employees paid less than the new salary requirement but given flexible hours and management responsibility.
In December 2024, NCLA won summary judgment from the U.S. District Court for the Northern District of Texas, vacating and setting aside the Rule, but the government appealed that ruling and held the appeal in abeyance while DOL re-examined the Rule. Today’s stipulated dismissal vacates that appeal, so it ends any possibility of the U.S. Court of Appeals for the Fifth Circuit overturning the judgment. Setting aside this unlawful Rule represents a great achievement for American small businesses and the rule of law.
Shrinking the FLSA’s wage and overtime exemption would have required employers to reclassify millions of employees as hourly, thus preventing those employees from enjoying flexible work arrangements. Flint Avenue competes with large corporations by offering its employees flexible arrangements, including unlimited vacation. The Rule would have forced it to reclassify some of those employees as hourly, making such mutually beneficial arrangements impossible.
The FLSA statutorily exempts anyone “employed in an executive, administrative, or professional capacity” from its minimum wage and overtime requirements, a definition based on a job’s function, not its salary level. Yet DOL’s Rule had effectively erased that standard by prohibiting employees from being eligible for the exemption unless they were paid a fixed weekly salary of at least $1,128, regardless of the “capacity” in which they were employed. The Rule also had allowed DOL to automatically ratchet up the minimum salary level every three years, ignoring the notice-and-comment requirements of the Administrative Procedure Act and defying the FLSA’s requirement to define the exemption “from time to time by regulation[.]” The first increase along those lines was scheduled for July 2027. Today’s stipulated dismissal ensures that unlawful change will not happen.
NCLA released the following statements:
“This Rule would have changed the status of millions of American workers with flexible schedules and decisionmaking status to that of hourly employees, and in some cases it would have eliminated their jobs. DOL is taking the lawful and wise course by dismissing its appeal and letting stand the district court’s Order to Set Aside and Vacate the Rule.”
— John Vecchione, Senior Litigation Counsel, NCLA
“The FLSA Overtime Rule was never lawful, and NCLA is proud to have brought about its demise. Kudos to our client Flint Avenue, LLC for successfully standing up to the Department of Labor.”
— Mark Chenoweth, President and Chief Legal Officer, NCLA
For more information visit the case page here.
ABOUT NCLA
NCLA is a nonpartisan, nonprofit civil rights group founded by prominent legal scholar Philip Hamburger to protect constitutional freedoms from violations by the Administrative State. NCLA’s public-interest litigation and other pro bono advocacy strive to tame the unlawful power of state and federal agencies and to foster a new civil liberties movement that will help restore Americans’ fundamental rights.
Joe Martyak New Civil Liberties Alliance 703-403-1111 joe.martyak@ncla.legal
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