The Supreme Court’s Encino Motorcars decision overturned the Ninth Circuit’s decision holding that the overtime exemptions to the FLSA should be construed narrowly. The exemption the Court was asked to apply to service advisors specifically states that “salesm[e]n … primarily engaged in … servicing automobiles” are not subject to the overtime requirements of the FLSA. In analyzing the text of the exemption, the Court found that it applied to those “integrally involved in the servicing process,” and therefore to service advisors.
Notably, this decision’s impact goes beyond employers in the car dealership industry, and affects all employers who use FLSA exemptions. The Supreme Court’s opinion explains that, because the “exemptions are as much a part of the FLSA’s purpose as the overtime-pay requirement,” a court interpreting the text of an exemption “ha[s] no license to give the exemption anything but a fair reading.” In short, Encino Motorcars ends the narrow construction principle of FLSA exemptions that existed for employers in several jurisdictions, including the Ninth Circuit. Encino Motorcars represents a benefit to employers as they utilize other FLSA overtime exemptions, such as the executive, administrative, professional, computer professional, or other highly litigated exemptions, as these exemptions should no longer be interpreted narrowly; rather, they should be given a “fair reading” based on the language of the exemption.
For specific questions about how overtime exemptions apply to your workplace, contact Nicole Elgin at (503) 276-2109 or email@example.com. You can also register here for our next breakfast seminar on advanced wage and hour laws.
Electronic Alerts are written by Barran Liebman attorneys for their clients and friends. Alerts are not intended as legal advice, but as employment law, labor law, and employee benefits announcements. If this has been forwarded to you, and you would like to begin receiving Electronic Alerts directly, please email or call Traci Ray at 503-276-2115. Copyright ©2018 by Barran Liebman LLP.
Las Alertas electrónicas son escritas por abogados de Barran Liebman para sus clientes y amigos. Las Alertas no son proveídas como asesoramiento legal, sino solo como anuncios de leyes de empleo, leyes laborales y beneficios de empleo. Si esto ha sido remetido a usted y quisieras empezar a recibir las Alertas directamente, por favor mándanos un correo electrónico o llama a Traci Ray al 503-276-2115. Derechos de autor ©2018 por Barran Liebman LLP.