An Obama administration policy that would have given morewhite-collar workers overtime starting Dec. 1 was blockednationwide by a federal judge in Texas.

The decision Tuesday is a victory for 21 states and dozens ofbusiness groups that sued, complaining the new rule would increasegovernment costs in their states by $115 million next year aloneand would put private employers on the hook for millions of dollarsmore, possibly leading to layoffs.

It's the fourth time in 21 months that a federal judge in Texashas issued a nationwide injunction blocking one of President BarackObama's executive orders. Other stalled Obama initiatives involveshielding undocumented immigrants from deportation, mandatingbathroom access for transgender students, and requiringlabor-violation disclosures by federal contractors.

The rule would have doubled the maximum salary cap to $47,892 ayear for full-time executive, administrative and professionalworkers to be exempt from overtime pay requirements. The highercutoff, along with a provision to periodically increase it, wouldhave extended overtime protections to millions of full-timesalaried workers, just 7% of whom are currently protected by theFair Labor Standards Act compared with 62% in 1975, according tothe government.

U.S. District Judge Amos L. Mazzant III in Sherman, Texas,rejected a request by the federal government to limit any order tothe states that filed the lawsuit and issued a preliminaryinjunction blocking the new salary cutoff nationwide.

By requiring employers to pay overtime wages based on salaryrather than an employee's duties, the Labor Department exceeded itsauthority under the Fair Labor Standards Act and ignored Congress'sintent, Mazzant said in his ruling. “If Congress intended thesalary requirement to supplant the duties test, then Congress andnot the department should make that change,” he said.

“We strongly disagree with the decision by the court, which hasthe effect of delaying a fair day's pay for a long day's work formillions of hardworking Americans,” the Labor Department said in astatement. “The department's overtime rule is the result of acomprehensive, inclusive rule-making process, and we remainconfident in the legality of all aspects of the rule. We arecurrently considering all of our legal options.”

The U.S. Labor Department failed to consider regional salary andeconomic differences in setting the nationwide base pay rate,opponents said in challenging the new rule. They also complained the Obamaadministration disregarded the abilities of smaller public andprivate employers to pay higher salaries that would automaticallyratchet up every three years.

The arguments by both sides turned partly on rule-makingrequirements under federal law.

Republican Governors

The states — all of them except Louisiana headed byRepublican governors — claim the Obama administration usurpedCongress's exclusive authority to set minimum wages and ignored therequirement to allow public comment before the statutory salarylevel automatically indexes every three years.

Labor Department officials said they followed all federalrule-making procedures, evaluating more than 270,000 publiccomments before finalizing the change.

Justice Department lawyers had asked Mazzant to at least let thenew rule take effect in the 29 states that didn't sue, to updatesalary triggers that haven't changed since 2004. Rising wages andbroad workplace definitions of what constitutes white-collar jobshave “left employees who should not be exempt without overtimeprotection,” the government said in court filings.

The case is Nevada v U.S. Department of Labor, 16-00731, U.S.District Court, Eastern District of Texas (Sherman).

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