Fair Labor Standards Act

On April 23, 2024, the U.S. Department of Labor (DOL) announced a final rule that increases the salary thresholds required to classify certain employees as exempt from overtime pay requirements under the Fair Labor Standards Act (FLSA).  The final rule, applicable to employees who otherwise satisfy the “white-collar” (bona fide executive, administrative, and professional) and “highly compensated” exemptions, is similar to the proposed rule DOL issued last August, although the salary thresholds in the final rule have been increased to align with the latest Census salary data.

The final rule represents a sharp increase—approximately 65%—from the current salary thresholds implemented in 2019 under the Trump Administration.  The rule is scheduled to take effect in two phases, with the first phase effective July 1, 2024 and the second on January 1, 2025.  Thus, employers have only a small window to determine how the rule will impact their operations and make any necessary adjustments.Continue Reading DOL Issues Final Rule Expanding Overtime Eligibility

Corporate lawyers negotiating asset purchase agreements believe strongly in the concept of freedom of contract.  Asset purchase agreements invariably have carefully crafted provisions dictating which assets and liabilities transfer to the buyer and which assets and liabilities remain with the seller.

Unfortunately, when it comes to employee and employee benefit liabilities, courts don’t always respect these carefully written contracts.  Courts are loathe to rule against employees or retirees who have lost certain rights or benefits as a result of a transaction, and an unsuspecting buyer can easily find itself responsible for employee-related liabilities that the buyer thought it had avoided.

In a recent example of this “buyer beware” phenomenon, the 7th Circuit held in Teed v. Thomas & Betts Power Solutions that an asset buyer was on the hook for a $500,000 settlement award for violations of the Fair Labor Standards Act (“FLSA”), even though the buyer expressly disclaimed the liability in the asset purchase agreement.
Continue Reading Buyer Beware: Asset Purchaser Liable for Predecessor’s FLSA Liability