- Written by Greg Blueford
On January 15, the United States Supreme Court agreed to hear a dispute on whether certain car dealership workers should be entitled to overtime pay. In Encino Motorcars LLC v. Hector Navarro et al., Encino Motorcars, LLC (“Encino”) challenged a Ninth Circuit ruling that “service advisors,” defined as the workers at car dealerships who talk with customers about the service to be done on their cars, are not exempt under Fair Labor Standards Act (“FLSA”) and are entitled to overtime pay. Encino’s service advisors initially sued the dealership the dealership in 2012, alleging their job descriptions required them to greet with car owners and sell additional services beyond what prompted the customer’s visit, but asserted they did not sell cars or perform repairs.
In March 2015, the Ninth Circuit ruled that service advisors should be eligible for overtime pay because a U.S. Department of Labor (“DOL”) regulation only excludes salespeople and mechanics from overtime pay, and not service advisors. According to Encino, the Ninth Circuit ruling runs counter to previous rulings by the Fourth and Fifth Circuits, both of which declined to adopt the DOL’s definitions. The Ninth Circuit, says Encino, chose to rely on a DOL regulation that holds that service advisors are not exempt from receiving overtime because they do not “personally service vehicles,” instead of FLSA’s plain language that exempts “any salesman, partsman or mechanic primarily engaged in a selling or servicing automobiles” from overtime.
- Written by Kevin Cleveland
Employers will need to be even more careful this year than in the past to guarantee compliance with all labor laws as enforcement agencies and plaintiffs’ attorneys are expected to be even more aggressive in filing class actions under the Fair Labor Standards Act (“FLSA”). A recent report by Syracuse University indicates that following a record setting 2015 for FLSA wage-and-hour lawsuits filed in federal courts with almost 9,000 filings, 2016 is expected to be even worse, becoming the third straight year to see a rise in FLSA lawsuits and continuing the steady upward trend over the last fifteen years. In fact, since 2000, FLSA filings in federal court have increased by over 450%.
It should come as no surprise that FLSA lawsuits are on the rise given minimum-wage increases in many states and municipalities, increasing scrutiny on worker classification, increased scrutiny on wage statements, an increased use of the dual employment doctrine, and a greater emphasis being paid to how and when employees are paid. In California the passage of AB-1513, the raise in the minimum wage that took effect at the beginning of the year, the passage of multiple other employee-friendly regulations and laws in recent months, and the growing involvement of both federal and state agencies in prosecuting cases involving wage and hour violations all but guarantees that there will also be an increase of wage and hour class action and Private Attorney General Act lawsuits in 2016.