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Supreme Court decision hits close to home in the Motor City

| Apr 5, 2018 | Employment Law

In Detroit, the hub of the auto industry in the United States — if not the world — automobile-related jobs are a huge economic factor. People who work in the industry rely on their wages and overtime to provide for themselves, their families and to make ends meet. Often, because of economic conditions, the extra income that overtime pay offers is an incentive for workers to remain in a position, even if (or because) it means extra hours.

A decision that the U.S. Supreme Court handed down this week though, throws a monkey wrench into that plan for certain workers at automotive dealerships. Carving out new territory in the nation’s employment law, the Court decided that service advisors at auto dealerships were generally not entitled to receive overtime pay, even though the advisors in question worked an average of 55-hours per week.

Strangely, this is not the first time the Supreme Court heard this case. The first time, the Court remanded the case, sending it back down. Then, the Ninth Circuit Court of Appeals again found in favor of the service advisors, holding that they were entitled to overtime. Granting review a second time, the Supreme Court overturned the Ninth Circuit judges, and held that service advisors’ duties are primarily sales — oil changes, alignments and other auto services.

Salespeople are generally exempt from the overtime laws in the Fair Labor Standards Act (FLSA). Therefore, service advisors, who are now legally “salespeople” are exempt from overtime. Unfortunately, unless a state law has carved out a greater protection for employees than the FLSA, the Supreme Court’s decision is now the law of the land.

Source: SupremeCourt.gov “Encino Motorcars, LLC v. Navarro et al.,” April 2, 2018