On April 2, 2018, the United States Supreme Court fundamentally changed the way Courts will interpret the Fair Labor Standards Act (FLSA) in future cases. The FLSA is a federal employment law relating to wage and hour issues in the workplace including establishing a minimum wage and employee eligibility for overtime pay. With respect to overtime pay, the FLSA starts with the premise that all employees are entitled to overtime pay but, then, carves out a number of exemptions. Historically, Courts have construed these exemptions narrowly, meaning that the FLSA exemptions were not given expansive interpretation and, therefore were limited. In Encino Motorcars, LLC v. Navarro, the United States Supreme Court overturned 50 plus years of precedent in a single paragraph, rejecting the longstanding principle that FLSA overtime exemptions should be construed narrowly. It simply held, “We reject this principle as a useful guidepost for interpreting the FLSA.” It seems the Court reasoned that the FLSA does not specifically state that the exemptions should be interpreted narrowly. This logic is faulty as the FLSA is premised on the idea that everyone is entitled to overtime unless they meet one of the few exceptions.
As a Milwaukee Employment Attorney, I can safely say that this decision is bad for employees. Since Courts are now free to construe exemptions “fairly” (read: broadly) it is safe to say that there will be a wave of new litigation designed at limiting employee’s rights to overtime.
The actual issue in the case was whether service advisors and automobile dealerships were exempt from overtime pay under the “Automobile Dealer” exemption, FLSA section 213(b)(10)(A), which exempts salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles from overtime pay. It should come as no surprise that the Court held service advisors are exempt from overtime pay.
Carroll Law Firm is a Milwaukee Employment Law Firm that zealously represents employees, professionals and executives in a myriad of employment law matters including wage & hour issues, age discrimination, review and negotiation of severance agreements, challenging non-compete agreements, employment discrimination, sex discrimination, age discrimination, disability discrimination, race discrimination, ethnicity discrimination, sexual harassment and retaliation.