Coalition for Workforce Innovation v. Walsh

Coalition for Workforce Innovation v. Walsh

Opinion

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.

I. Background

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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