The United States Supreme Court has overturned a Ninth Circuit Court of Appeals ruling that would have permitted auto service advisers (employees at car dealerships who advise customers about repair work) to receive overtime. The Supreme Court held the service advisers were exempt from the overtime benefits of the Fair Labor Standards Act (FLSA) because they are “salesmen … primarily engaged in … servicing automobiles,” according to Justice Clarence Thomas.
The lawsuit seeking overtime pay under the FLSA was filed nearly six years ago. It has worked its way up and down the judicial system on more than one occasion. However, the Supreme Court has finally put the case to bed.
The Supreme Court’s ruling that auto service advisors are overtime-exempt under the FLSA seemingly contradicts the longstanding legal principal that required exemptions to be narrowly construed. In the past, Court have narrowly construed exemptions to the FLSA against the employer and limited their application to situations that are plainly and unmistakably within the exemptions terms and spirit. Instead, the Supreme Court analyzed the exemption by employing “a fair reading” of the exemption standard.
Some experts have argued that this case is one of the most significant decisions on exemptions because it ends the narrow construction principle, which in the past was applied to every exemption case. The Supreme Court’s analysis places less of a burden on an employer who seeks to avoid paying their employees overtime by classifying them as exempt. Arguably, the decision allows employers to apply exemptions in situations where, in the past, they otherwise would not have been applicable.
In fact, at oral argument, when asked about whether the exemption should be narrowly construed, Paul Clement of Kirkland & Ellis LLP (attorney for the employer), responded “it may be time to put that canon to rest.”
The Supreme Court appears to have done just that. Over the past several years, disputes between employer and employee that reach the ultra-conservative United States Supreme Court have overwhelmingly been decided in favor of the employer.
The case is Encino Motorcars LLC v. Navarro et al., case number 16-1362.