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United States District Court for the Eastern District of Texas
March 14, 2022, Decided; March 14, 2022, Filed
CIVIL ACTION NO. 1:21-CV-130
MEMORANDUM AND ORDER
Pending before the court is Plaintiffs Coalition for Workforce Innovation, Associated Builders and Contractors of Southeast Texas, Associated Builders and Contractors, Inc., and Financial Services Institute, Inc.'s (collectively, "Plaintiffs") Motion for Summary Judgment (#18). In response, Defendants Marty Walsh, in his official capacity as Secretary of Labor for the United States Department of Labor ("DOL" or the "Department"), Jessica Looman, in her official capacity as Principal Deputy Administrator for the Division of Wage and Hour, and the DOL (collectively, "Defendants") filed their Cross-Motion for Summary Judgment (#23). Plaintiffs filed a response to Defendants' cross-motion (#25), and Defendants filed their reply (#30). Having considered the motions, the submissions of the parties, the record, and the applicable law, the court is of the opinion that Plaintiffs' motion for summary judgment should be granted and Defendants' cross-motion for summary judgment should be denied.
This case arises from the Government's alleged violation of the Administrative Procedure Act ("APA"). [*3] 5 U.S.C. § 551 et seq. Plaintiffs challenge final rules promulgated by the DOL regarding the Fair Labor Standards Act ("FLSA"). During the Trump Administration, the DOL promulgated a rule—titled "Independent Contractor Status Under the [FLSA]" (the "Independent Contractor Rule")—which sought to clarify the definition of "independent contractor" under the FLSA. See Independent Contractor Status Under the Fair Labor Standards Act, 86 Fed. Reg. 1,168 (Jan. 7, 2021). The Independent Contractor Rule was initially scheduled to take effect on March 8, 2021. Id.
On January 20, 2021, when the Biden Administration took office, the White House issued a memorandum directing federal agencies to postpone the effective dates of rules that had been published in the Federal Register but had not yet taken effect (the "Regulatory Freeze Memorandum"). Memorandum for the Heads of Executive Departments and Agencies, 86 Fed. Reg. 7,424 (Jan. 28, 2021). The White House stated that it issued the Regulatory Freeze Memorandum to "ensure that the President's appointees or designees have the opportunity to review any new or pending rules," as well as to give agencies an opportunity to "review any questions of fact, law, and policy the rules may raise." Id.
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2022 U.S. Dist. LEXIS 68401 *; 2022 WL 1073346
COALITION FOR WORKFORCE INNOVATION, ASSOCIATED BUILDERS AND CONTRACTORS OF SOUTHEAST TEXAS, ASSOCIATED BUILDERS AND CONTRACTORS, INC., and FINANCIAL SERVICES INSTITUTE, INC., Plaintiffs, versus MARTY WALSH, in his official capacity as Secretary of Labor, United States Department of Labor, JESSICA LOOMAN, in her official capacity as Principal Deputy Administrator, Division of Wage and Hour, and UNITED STATES DEPARTMENT OF LABOR, Defendants.
Subsequent History: Appeal filed, 05/16/2022
Contractor, Delay Rule, good cause, Withdrawal, effective date, notice-and-comment, regulations, comment period, promulgated, factors, notice, independent contractor, economic reality, rulemaking, comments, courts, Memorandum, arbitrary and capricious, meaningful opportunity, independent contractor status, agency's action, postponement, Defendants', rescinded, agencies, Fair Labor Standards Act, effective, clarity, reasons, summary judgment motion