While the April 2nd Supreme Court ruling may only apply to a very small segment of workers and probably only affects a single wage and hour lawsuit currently, this departure from the longstanding approach at interpreting overtime exemption will likely have broader implications and affect more workers in the future.
Since the 1940s, the courts have applied narrow construction when interpreting overtime exemption. This week marks a turning point in the court’s approach. Narrow construction is the approach in which the courts construe FLSA overtime exemptions narrowly. This approach had the benefit to the employee in mind.
On Monday, Justice Clarence Thomas said, “We reject [the narrow construction] principle as a useful guidepost for interpreting the FLSA. Because the FLSA gives no textual indication that its exemptions should be construed narrowly, there is no reason to give them anything other than a fair (rather than a ‘narrow’) interpretation.”
In the Encino Motorcars, LLC v. Navarro et al. case the Supreme Court reversed the 9th Circuit Court of Appeal’s ruling, which granted overtime to car service advisers. These employees were sales people selling a service. They should not be entitled to overtime, says the Supreme Court this week.
Since this ruling, employees at the Mercedes Benz dealership will not be going through with their overtime lawsuit.
For more information on the background and details of the ruling on narrow construction, read the write up by Paul DeCamp on Epstein Becker Green.