Encino Motorcars, LLC v. Navarro

Case Updates

The Supreme Court unanimously rejected the Ninth Circuit decision, holding that the Ninth Circuit erred when it deferred to a Department of Labor (“DOL”) regulation regarding the scope of an overtime exemption for auto dealer workers. The Court explained that DOL’s 2011 regulation had reversed the previous, longstanding position of the agency. And it held that no deference was appropriate because DOL had not provided “the reasoned explanation that was required in light of the Department’s change in position and the significant reliance interests involved.” The Court did not ultimately decide whether service advisers are exempt, but rather remanded the case to the Ninth Circuit to answer that question.

In its brief, the U.S. Chamber urged the U.S. Supreme Court to reverse a Ninth Circuit decision that held that service advisors at automobile dealerships are not exempt from the FLSA’s overtime-pay provision. The brief argues that the Court should reject the unjustifiable canon that exemptions to the FLSA must be narrowly construed. The brief also argues that although the Court might be capable of resolving this case without addressing the validity of this canon, the Court should take the opportunity presented in this case to reject that notion and provide clear guidance to the lower courts.

The brief was filed jointly with the National Federation of Independent Business and Retail Litigation Center.

Matthew W. Lampe and E. Michael Rossman of Jones Day served as co-counsel for the amici.