Encino Motorcars, LLC v. Navarro, 579 U.S. ___, 2016 WL 3369424 (2016)
An amendment to the Fair Labor Standards Act (“FLSA”) exempts from its overtime requirements “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trucks, or farm implements.” Later, the U.S. Department of Labor (“DOL”) issued an opinion letter and amended its Field Operations Handbook to state that service advisors also are exempt from overtime under the statute. However, in 2011, the DOL issued a new rule that limited the exemption only to employees who sell automobiles, trucks, or farm implements, thus presumably giving service advisors a right to overtime under the FLSA. In this case, the United States Supreme Court vacated the judgment of the United States Court of Appeals for the Ninth Circuit, which had upheld the rule change, and determined that the 2011 regulation was issued by the DOL without the reasoned explanation that was required in light of the Department’s change in position and the significant reliance interests involved. The Court remanded the case for further consideration by the Ninth Circuit. See also Flores v. City of San Gabriel, 2016 WL 3090782 (9th Cir. 2016) (City’s payment of unused benefits must be included in the regular rate of pay and thus in the calculation of FLSA overtime for police officers).
Auto Dealership Service Advisors May Be Exempt From Federal Overtime Requirements
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