Supreme Court ruling blows hole in overtime pay eligibility

Washington (PAI) – A new Supreme Court ruling against a small group of workers – auto dealership service advisors – could blow a big hole in which workers nationwide are eligible to get overtime pay, a top union attorney warns.

That’s because the April 17 opinion in Encino Motorcars v Navarro gives the Labor Department wide latitude to decide which classes of workers are ineligible to get time-and-a-half pay when they toil for more than 40 hours a week, says Andrew Strom, associate general counsel for the Service Employees, writing in Harvard Law School’s On Labor blog.

The case started several years ago at a Mercedes-Benz dealership in Encino, CA, when the advisors – who counsel customers on what repairs their vehicles need and occasionally make small fixes – sued for overtime pay. They worked a minimum of 55 hours weekly, from 7 a.m. to 6 p.m., Monday through Friday, and often more.

They argued that among more than 20 occupations in auto dealership service departments, only three – “salesmen, partsmen and mechanics” – were specifically listed in the Fair Labor Standards Act as exempt from overtime pay.

In the 5-4 ruling, the court said the FLSA doesn’t cover the service advisors either. Siding with auto dealer, and the Chamber of Commerce, Justice Clarence Thomas called the advisers salesmen. That means they’re exempt from overtime.

‘FAIR’ INTERPRETATION, WHATEVER IT MEANS

The 80-year-old FLSA, the basic overtime and minimum wage law, was amended in 1966 to cover most auto dealer workers. Before that it covered virtually none, the court explained. “The 9th Circuit” Court of Appeals, which had ruled for the service advisors, “also invoked the principle that exemptions to the FLSA should be construed narrowly,” Thomas said. “We reject this principle as a useful guidepost.”

Because the law doesn’t say that its exemptions should be narrow, “There is no reason to give them anything other than a ‘fair’ interpretation,” Thomas wrote. He didn’t define “fair,” leaving that to DOL.

TURNING BACK THE CLOCK

Citing a friend-of-the-court brief from the Machinists, the dissenters pointed out FLSA exempts only the three listed occupations in auto dealer service departments from overtime pay: Salesmen, partsmen and mechanics.

“The court approves the exemption of a fourth: Automobile service advisors…I would not enlarge the exemption to include service advisors or other occupations outside Congress’ enumeration,” Justice Ruth Bader Ginsburg wrote.