Mayfield v. LABR

Majority - Jennifer Walker Elrod, Circuit Judge

No, the Department of Labor does not exceed its statutory authority or violate the nondelegation doctrine by promulgating the 2019 Minimum Salary Rule, because the rule falls within the explicitly delegated power to define and delimit the EAP Exemption terms, and this power is not an unconstitutional delegation of legislative power. The court found that the FLSA explicitly grants DOL the authority to "define[] and delimit[]" the terms of the EAP Exemption. "Define" means to set forth what a word means, and "delimit" means to mark or determine a limit. The Minimum Salary Rule both defines, in part, what it means to work in an EAP capacity (by requiring a minimum earnings threshold) and delimits the scope of the exemption. The court reasoned that terms like "executive," "administrative," and "professional" connote a particular status and prestige for which salary is a reasonable proxy, establishing a strong textual foundation for the rule. This use of salary is rationally related to the statutory terms and does not replace the duties test. The argument that Congress explicitly includes salary requirements elsewhere but omitted it here is inapposite, as the question is about the scope of the delegated power to "define and delimit," not whether the exemption itself inherently contains a salary requirement. The court determined that the major questions doctrine does not apply. The economic impact of the 2019 Rule (approximately $472 million in the first year) is significantly lower than the hundreds of billions or trillions of dollars involved in cases where the doctrine has been applied. The rule impacts 1.2 million workers, which is not considered a "significant portion of the American economy." Furthermore, the issue of using salary to define the exemption is not a matter of "vast political significance" comparable to previous cases, and DOL has continuously asserted this authority since 1938, weighing against applying the doctrine as it is not an "unheralded power." Regarding the nondelegation doctrine, the court held that the EAP Exemption, read in conjunction with the FLSA's statutory directive to eliminate substandard labor conditions (29 U.S.C. § 202(a), (b)), provides an "intelligible principle" to guide DOL's authority. The FLSA's purpose helps DOL determine which groups of workers need protection, and the meaning of "executive," "administrative," and "professional" themselves guides and limits DOL's power. Although the guidance is not precise, the current nondelegation standard is "not demanding." The court also noted that while it found DOL's interpretation to be the "best" reading of the statute without needing deference post-Loper Bright, if Skidmore deference applied, it would weigh in favor of DOL due to its consistent interpretation for over eighty years, its immediate action after the FLSA's passage, and Congress's numerous amendments without modifying the rule. The Fifth Circuit joins four sister circuits in upholding DOL's authority.