Thompson Coe Attorney Takes Key Wage & Hour Case to the Supreme Court

Normally the weekly tip is a Q&A or a legal update on some important topic; but normally key wage and hour cases are not argued by one of my colleagues either, so this week's tip is a bit different.  And rightly so.  Every year, of all of the tens of thousands of employment cases heard by federal courts in the country very few (commonly 2-5) are heard by the U.S. Supreme Court.  On Wednesday (April 20) one of my Labor & Employment partners in our California office, Keven Steinberg, had the privilege of arguing one of the most important cases for 2016 before the U.S. Supreme Court - Encino Motorcars v. Hector Navarro.

The issues of the case have significant importance for the auto dealers and auto mechanics industry in the U.S. specifically, but there is additionally a larger legal issue of great importance for all employers.  On the former, the issue is whether service advisors at auto dealers are exempt from the requirements under the Fair Labor Standards Act (FLSA). Under the FLSA "any salesperson, mechanic or partsman who are primarily engaged in selling or servicing an automobile, a truck or a farm implement" are exempt from the FLSA (and, specifically, the requirement for paying overtime).  The question then was whether the dealership violated the FLSA when it classified a service advisor, who did some selling, some advising and some work on the automobiles, but did not perfectly fit into any of these roles - i.e. salesperson, mechanic or partsman.

On the latter and second issue presented by this case, the question is whether and how much deference the courts should offer to an administrative agency’s interpretation of the law.  That is to say, how much deference should the courts give to the Department of Labor’s regulations?  If the Supreme Court answers that question it could have an enormous impact on all regulations and the influence and power of administrative agencies in the interpretation of their laws.   

As I understand it, the justices seemed fairly divided on the issue through the questioning, and with only eight of them it might be expected that they are perfectly divided.  However the case is determined by the Court, the decision will have a big impact on the auto, truck and farm servicing and dealership industry and their use and compensation of service advisors; and if the Court takes the regulatory authority issue head on the case could be of enormous importance affecting all businesses and manner of federal regulation.

If the issues present in this case impact your business there may be no more knowledgeable attorney in the U.S. to assist you with addressing them than Keven, and, if so, I would encourage you to reach out to him any time to discuss.    

 
 
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