Supreme Court Rejects Principle that FLSA Overtime Exemptions Should Be Construed Narrowly

In a 5-4 opinion issued on April 2nd, the United States Supreme Court held that service advisers at car dealerships are exempt from the overtime pay requirement of the FLSA because they are “salesm[e]n . . . primarily engaged in . . . servicing automobiles.”  This ruling is significant for not only the auto industry, however, because the Court also rejected the previously applied general principle that FLSA exemptions should be construed narrowly. The Court stated that “there is no reason” to give the FLSA exemptions “anything other than a fair (rather than a ‘narrow’) interpretation.” In making this statement the Court referred to FLSA exemptions generally, and not the exemption applicable to automobile sales and service specifically.

The case is Encino Motorcars LLC v. Navarro. It was originally filed in 2012 and this was the second time that the Supreme Court reviewed it following rulings by the Ninth Circuit that the service advisers were not exempt. The Supreme Court ruling opens the door to employers seeking a “fair” but not “narrow” interpretation of FLSA exemptions as applied to other industries and jobs.

For a copy of the opinion, see here.

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