Even after a Texas federal judge blocked the Obama administration’s update to overtime pay regulations under the Fair Labor Standards Act, plaintiffs lawyers at Cohen Milstein Sellers & Toll and Outten & Golden weren’t deterred from suing Chipotle Mexican Grill Inc. in New Jersey for allegedly violating the overtime rule.
But the attempt to test the scope of an injunction against the overtime rule hasn’t worked out as the employment lawyers might have hoped. On Monday, they were held in contempt and ordered to withdraw their lawsuit against Chipotle.
U.S. District Judge Amos Mazzant in Sherman, Texas, handed down the contempt ruling against four lawyers from Cohen Milstein and Outten & Golden, along with local counsel in New Jersey, Glen Savits of Green Savits. The judge chided the lawyers—lead counsel Joseph Sellers of Cohen Milstein and Justin Swartz of Outten & Golden, as well as one associate from each firm and Savits—for ignoring his November 2016 injunction.
“Respondents have repeatedly and summarily dismissed the injunction’s bearing on them and on their clients,” Mazzant wrote on Monday, referring to the plaintiffs lawyers behind the Chipotle suit. “They have done so despite the injunction’s plain language, clear construction, and self-evident application to their causes of action.”
With his November 2016 injunction, Mazzant blocked the U.S. Department of Labor from enforcing the Obama-era rule, which called for a new minimum salary threshold for overtime eligibility under the FLSA. The update raised the salary threshold for the first time in 12 years, from $23,660 to $47,476, opening up overtime pay to more than 4 million additional workers in the United States. Mazzant’s injunction applied nationwide and prevented the Labor Department from enforcing the overtime rule, according to the judge’s rulings.
Despite Mazzant’s injunction—which is now being considered in an appeal to the U.S. Court of Appeals for the Fifth Circuit—Cohen Milstein and Outten & Golden pushed ahead in June with a proposed class and collective action in New Jersey federal court. The suit alleged that the overtime rule was still valid and that Chipotle had abdicated its responsibilities when it opted to stop paying overtime to employees affected by the Obama administration’s regulation.
As part of Chipotle’s defense against the claims in New Jersey, the company’s lawyers at Sheppard, Mullin, Richter & Hampton, Messner Reeves and Cantey Hanger filed a motion for contempt in Texas federal court. The contempt motion, lodged in August, argued that Mazzant’s injunction should have prevented Cohen Milstein and Outten & Golden from pursuing claims against Chipotle.
“It is hard to envision a more concrete example of lawyers actively assisting a client to violate a court order,” Chipotle’s lawyers wrote in August.
Mazzant on Monday agreed with Chipotle. In addition to granting Chipotle’s contempt motion, the judge ordered the plaintiffs lawyers to withdraw the individual and collective action allegations against the Mexican restaurant chain and to cover Chipotle’s legal fees in connection with the contempt proceedings.
Sellers of Cohen Milstein and Swartz of Outten & Golden did not immediately respond on Tuesday to requests for comment.