A federal appeals panel on July 2 voided a Texas trial judge's order that said three plaintiffs firms were in contempt for allegedly violating the nationwide injunction blocking enforcement of an Obama-era U.S. Labor Department rule.

U.S. District Judge Amos Mazzant of the Eastern District of Texas said the firms—Cohen Milstein Sellers & Toll, Outten & Golden, and New Jersey's Green Savits—violated the injunction when they brought a wage-and-hour suit in New Jersey federal court. Mazzant's injunction, issued against the Labor Department, had earlier paused a rule that would have made millions of more workers eligible for overtime compensation.

“This appeal concerns the district court's extraordinary and concededly unprecedented use of the contempt power to dictate the legal arguments that a stranger to that court may advance in another federal court,” a Jenner & Block team argued on behalf of the plaintiffs firms in the U.S. Court of Appeals for the Fifth Circuit last year.