In yet another sign that Donald Trump’s election will have devastating effects on American workers for decades to come, today the Supreme Court issued a 5-4 opinion that not only expanded the FLSA’s automobile dealership exemption, but also eliminated the decades-old principle that courts should construe the minimum wage and overtime exemptions narrowly.
In Encino Motorcars, LLC v. Navarro et al., the Court considered a case out of California in which a car dealership treated its “service advisors” as exempt from the Fair Labor Standards Act’s overtime pay requirement. The dealership relied on the exemption found at 29 U. S. C. § 213(b)(10)(A), which exempts “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles,trucks, or farm implements.” While the District Court found the service advisors to be exempt, the Ninth Circuit Court of Appeals reversed, finding that the exemption was ambiguous and that the Department of Labor’s regulation distinguishing non-exempt service advisors from exempt salesmen. Finally, the Supreme Court considered the case and, in a majority opinion authored by Justice Clarence Thomas, reversed the Ninth Circuit (and with it, the Department of Labor).
The Court’s primary holding—that service advisors qualify as “salesmen” who “service automobiles” was based primarily on analysis of the grammatical structure of the exemption’s text. Notably, the majority rejected the Ninth Circuit’s reliance on the Department of Labor guidelines that were in place when the exemption became law and the legislative history of the § 213 exemptions.
Justice Ruth Bader Ginsburg, along with Justices Breyer, Sotomayor, and Kagan, dissented from the majority opinion. The dissenters noted that
Service advisors, such as respondents, neither sell automobiles nor service (i.e., repair or maintain) vehicles. Rather, they “meet and greet [car]owners”; “solicit and sugges[t]” repair services “to remedythe [owner’s] complaints”; “solicit and suggest . . . supplemental [vehicle] service[s]”; and provide owners with cost estimates. App. 55. Because service advisors neither sell nor repair automobiles, they should remain outside the exemption and within the Act’s coverage.
Congress confined the dealership exemption to three categories of employees: automobile salesmen, mechanics, and partsmen. . . . Congress did not exempt numerous other categories of dealership employees, among them, automobile painters, upholsterers, bookkeeping workers, cashiers, janitors, purchasing agents, shipping and receiving clerks, and, most relevant here, service advisors. These positions and their duties were well known at the time, as documented in U. S. Government catalogs of American jobs.
The dissenters also noted that the exemption’s original rationale was largely based on the fact that salesmen can be asked to work irregular schedules with wildly fluctuating hours, while service advisors “wor[k] ordinary, fixed schedules on-site.”
The Court’s conservative majority could have simply relied on their interpretation of the exemption’s text to reach the decision that they did. But they were not content to issue a narrow opinion that would simply resolve the issue in this case. Instead, the majority gratuitously overturned more than a half-century of precedent under which Courts have uniformly construed FLSA exemptions “narrowly.” The majority noted that the Ninth Circuit had “also invoked the principle that exemptions to the FLSA should be construed narrowly” and then immediately “reject[s] this principle as a useful guidepost for interpreting the FLSA.” Thus, in a single paragraph and virtually without analysis, the conservative majority demolished over half a century of precedent that has guided courts across the nation. They ignore the fact that all amendments to the FLSA since the 1960’s have been made with the underlying assumption that its exemptions would be construed narrowly.
The dissent noted this large departure from established precedent in a footnote:
This Court has long held that FLSA “exemptions are to be narrowly construed against the employers seeking to assert them and their application limited to those [cases] plainly and unmistakably within their terms and spirit.” Arnold v. Ben Kanowsky, Inc., 361 U. S. 388, 392 (1960). This principle is a well-grounded application of the general rule that an “exception to a general statement of policy is usually read. . . narrowly in order to preserve the primary operation of the provision.” Maracich v. Spears, 570 U. S. 48, 60 (2013) (internal quotation marks omitted). In a single paragraph, the Court “reject[s]” this longstanding principle as applied to the FLSA . . . without even acknowledging that it unsettles more than half a century of our precedent.
Unfortunately for workers throughout the country, it is clear that the Court’s current conservative majority is willing to throw principles of stare decisis and judicial minimalism out the window if it serves the purpose of undermining workers’ rights. If Kennedy or any of the Court’s liberal justices is replaced this year, the country can look forward to at least 30 more years of judicial interference with congressional attempts to protect workers.