Robert Mayfield owns and operates his family company R.U.M. Enterprises, which encompasses over a dozen Dairy Queen restaurants around Texas and a Wally’s Burger Express in Austin.
Mayfield alleges in his official complaint that minimum salary requirements mandated by the U.S. Department of Labor (DOL) hamstring his ability to fairly compensate his employees.
The issue arises from an interpretation of Section 213 of the Fair Labor Standards Act of 1938 (FLSA). The law includes an exemption for workers who perform executive, administrative, and professional duties (EAP).
This exemption suspends the time-and-half overtime rule for full-time employees who log over 40 hours a week. The time-and-half rule mandates that employers pay hourly employees 1.5 times their hourly rate for every hour they log over 40 hours in a week.
The text of the law does not list a salary requirement to meet this exemption, only granting “authority to the Secretary of Labor to define and delimit the EAP exemption from time to time.”
The EAP exemption, the standard for which is set by the agency and not by law, has risen over time. The last increase was in 2019, when it increased over 50 percent from $23,660 to the current level of $35,588.
Mayfield’s legal representation — the Pacific Legal Foundation (PLF), a non-profit legal organization whose stated goal is to “defend Americans’ liberties when threatened by government overreach and abuse” — claims another increase could damage his business.
Because the FLSA lacks both a salary requirement for the exemption and a particular individual tasked with setting the standard, the plaintiff argues it is unconstitutional for the DOL to arbitrarily increase it.
“The statute does not authorize the Secretary of Labor to impose salary requirements at all,” Luke Wake, attorney with PLF, told The Texan. “It says nothing of the sort.”
“At the heart of this case is the constitutional argument, which is really why our organization took this case. There is a question asking whether or not Congress can delegate this power without violating bedrock constitutional doctrine.”
“Under the nondelegation doctrine,” Wake added, “Congress cannot delegate away its lawmaking power to a federal agency unless there is an intelligible governing principle making certain that the agency follows Congress’s direction.”
He concluded, “Our client cares about this because it directly affects how he runs his business, but at the Pacific Legal Foundation we care about the foundational legal principles.”
Wake indicated that the next EAP requirement increase will be even more drastic and further constrain Mayfield’s business, forcing him to increase base salaries or totally switch employees to hourly pay.
Both of these options eliminate the opportunity to offer performance-based bonuses tied to stated R.U.M’s success.
According to the PLF, switching his employees to hourly rates “inhibits the managerial mindset that Robert [Mayfield] wants to foster in his management team, because an hourly worker is focused more on the clock than on the goal of getting the job done right.”
The organization also argues that if Mayfield were free to run his business without DOL requirements, he could create a more valuable bonus structure with lower base salaries.
This would raise his managerial staff’s overall pay higher than the current EAP exemption standard.
The DOL regional office did not return a request for comment by the time of publishing.
Now the case will go before the U.S. District Court for the Western District of Texas.
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Hudson Callender is a reporter for The Texan and a lifelong resident of San Antonio, Texas. Hudson recently graduated cum laude from Trinity University with majors in Economics and Political Science, and loves to study ancient history. Hudson is also an avid mountaineer, backpacker, and paddler, often leading trips to remote wilderness areas. Outside of his love for nature, history, and Lone Star beer, Hudson spends his weekends arguing with his friends about football, and will always stick up for the Baylor Bears, Dallas Cowboys, and San Antonio Spurs.