Last year in a rare victory for the Department of Labor, the Fifth Circuit Court of Appeals rejected a claim by a Dairy Queen franchisee that the Fair Labor Standards Act prohibits DOL from establishing any minimum salary for workers to qualify for exemption from the FLSA’s overtime provisions. In Mayfield v. USDOL, the plaintiff argued that the U.S. Supreme Court’s recent discarding of its Chevron precedent, combined with expressions over the need to construe FLSA exemptions broadly, led to a conclusion that DOL can only consider the employee’s duties when making the exemption determination.

The Fifth Circuit panel initially held that the FLSA expressly delegates to DOL the authority to establish regulatory standards for the overtime exemptions, which include the establishment of a minimum salary. The court also noted that DOL has used the salary test since 1938 without objection from any presidential administration.

Last week, the Fifth Circuit rejected the plaintiff’s motion to reconsider its decision. Barring an appeal to the full Fifth Circuit or the Supreme Court, this signifies the end of this litigation. The Fifth Circuit is considered the most conservative federal appellate court in the U.S. The plaintiff’s inability to convince the Fifth Circuit to adopt its legal reasoning does not bode well for similar challenges in other appellate circuits.

This litigation is unrelated to challenges to DOL’s efforts in 2024 to increase the minimum salary required for the overtime exemptions. Those lawsuits did not challenge the ability of DOL to set a minimum salary, instead alleging that the magnitude of the increases was arbitrary and capricious. One of those lawsuits is pending before the Fifth Circuit, but that appeal will likely be withdrawn by the Trump administration. For now at least, employers seeking to claim the white collar FLSA overtime exemptions will have to meet some minimum salary level to qualify.

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