Opinion analysis: Justices reject Fair Labor Standards Act protections for service personnel at car dealerships

Posted Tue, April 3rd, 2018 10:31 am by Ronald Mann

There was no shock yesterday in the justices’ resolution of Encino Motorcars v. Navarro, keeping company advisors at car dealerships exempt from the Reasonable Labor Benchmarks Act. The argument instructed that the justices would be deeply divided, and it available no cause to think that the three justices who voted from the company advisors the last time this circumstance was just before the court (Chief Justice John Roberts and Justices Clarence Thomas and Samuel Alito) would look at the subject any in a different way this time. Those three, alongside with Justices Anthony Kennedy and Neil Gorsuch, joined Thomas’ belief rejecting the contrary ruling of the United States Court docket of Appeals for the 9th Circuit. Justice Ruth Bader Ginsburg’s dissent garnered the 4 remaining votes.

Justice Thomas with belief in Encino Motorcars v. Navarro (Artwork Lien)

The circumstance will involve an exemption from the FLSA’s extra time prerequisites for workforce at car dealerships, an exemption that has waxed and waned for substantially of the 80 yrs because Congress initial enacted the statute. The challenge started in 1961, when Congress amended the FLSA to exempt all workforce at car dealerships. Five yrs later, however, Congress narrowed the exemption, limiting it to “any salesman, partsman, or mechanic largely engaged in promoting or servicing cars.” The protection of company advisors was disputed from the beginning – as they undoubtedly are not “partsmen,” and also do not seem to be salesmen promoting cars or mechanics servicing them. The Department of Labor to begin with held that the exclusion did not vitiate protections for company advisors, but the federal courts in a pre-Chevron era marked by less deference to administrative agencies’ interpretations of ambiguous statutes turned down the department’s look at. Responding to the unsuccessful litigation, the division acquiesced to the federal-court rulings in 1978, issuing a official belief letter excluding company advisors from FLSA protections.

In 2011, even so, all through President Barack Obama’s initial phrase, the division issued a new regulation reiterating its first look at that the exemption did not leave company advisors unprotected. The 9th Circuit upheld that regulation, deferring to the department’s look at below Chevron, but the Supreme Court docket in a 2016 belief reversed the 9th Circuit, keeping that the department’s failure to justify the transform of look at in 2011 created deference inappropriate. On remand, the 9th Circuit (not finding the message) adhered to its look at that the company advisors were being secured, this time relying right on the language of the statute. Predictably plenty of, that conclusion led to a next hearing just before the justices, culminating in yesterday’s definitive ruling from the company advisors.

All agree that the situation below is no matter whether company advisors are “salesm[e]n … largely engaged in … servicing cars.” Thomas’ belief for the majority finds that they are. For just one factor, it is effortless to say that their action promoting solutions helps make them salesmen in the “ordinary meaning” of the phrase. Nor is Thomas troubled substantially by the concern no matter whether they are largely engaged in servicing cars. For the majority, pointing to the broad range of duties they perform, company advisors “are integral to the servicing system.” The majority acknowledges that “service advisors do not invest most of their time physically repairing cars,” but emphasizes that the similar is accurate of partsmen. The inclusion of partsmen in the statute means that “the phrase ‘primarily engaged in … servicing automobiles’ ought to consist of some individuals who do not physically fix cars them selves but who are integrally involved in the servicing system.”

Thomas subsequent rejects the idea that the so-called “distributive” canon of statutory design necessitates limiting the statutory category of salesman to individuals who offer vehicles and limiting the category of mechanics to individuals who company them – by “distributing” the verbs at the stop of the clause (“sell” and “service”) precisely to the nouns at the beginning of the clause (“salesmen” and “mechanics”). Thomas factors out that the “disjunctive this means of ‘or’” is by considerably the most commonplace and that the distributive canon helps make minor perception when there are three nouns (“salesmen,” “partsmen” and “mechanics”) to be allotted above the two verbs (“sell” and “service”).

Dropped into the textual dialogue is the extra colloquial suggestion that “[i]f you check with the average buyer who solutions his car, the principal, and possibly only, person he is possible to detect is his company advisor.” If the suggestion strikes you as a little bit out of place in Thomas’ textual dialogue of discursive and distributive readings, I should issue out that it properly may well occur from the chief justice – it echoes a folksy comment Roberts created at the argument that “if you above numerous yrs dropped your car off any time … it’s damaged and you discuss to Fred about finding it preset, … you would say ‘my company person is Fred’ and normally “think of Fred as the person who solutions your car.” Probably Fred is dissatisfied this morning that he didn’t get a own mention in the belief!

The closing pages of the belief ascend from the specifics of the textual content to concerns of substantially higher generality – and import.  To start with, Thomas considers the 9th Circuit’s reliance on “the theory that exemptions to the FLSA should be construed narrowly.” The 5 justices in the majority unequivocally “reject this theory as a practical guidepost for interpreting the FLSA.” Quoting just one of Justice Antonin Scalia’s last opinions, Thomas explains that “the narrow-design rules relies on the flawed premise that the FLSA ‘pursues its remedial reason at all expenses.’” Due to the fact the “exemptions are as substantially a portion of the FLSA’s reason as the extra time-spend prerequisite,” Thomas insists that the court “ha[s] no license to give the exemption everything but a honest reading through.” Notably, as Justice Ruth Bader Ginsburg’s dissent emphasizes, Thomas’ dialogue of the issue does not so substantially as mention the earlier conditions, spanning “more than fifty percent a century,” in which the court adopted that theory.

The opinion’s last matter is the absence of legislative record about company advisors, which motivates a hugely quotable passage on the irrelevance of legislative silence:

Even for individuals Customers of this Court docket who think about legislative record, silence in the legislative record, “no subject how clanging,” are not able to defeat the improved reading through of the textual content and statutory context. If the textual content is crystal clear, it requirements no repetition in the legislative record and if the textual content is ambiguous, silence in the legislative record are not able to lend any clarity.

Encino did not seem like a significant circumstance at the argument, but my guess is that the closing pages of the belief will have rather a little bit of keeping electrical power. FLSA exemptions are frequently litigated, and numerous of the amici weighed in heavily to emphasize the relevance of reaffirming the narrow-design theory (the look at of the Countrywide Employment Lawyers Affiliation) or discarding it (the look at of the Chamber of Commerce). The stop of narrow design could be sending shock waves by means of FLSA jurisprudence in the lower courts for yrs to occur. In the similar way, the crisp dismissal of legislative silence delivers a hugely seen passage possible to rack up repeated citations from judges dubious of legislative record.

Click for vote alignment by ideology.

Posted in Encino Motorcars, LLC v. Navarro, Showcased, Merits Cases

Advised Citation:
Ronald Mann,
Belief evaluation: Justices reject Reasonable Labor Benchmarks Act protections for company staff at car dealerships,
SCOTUSblog (Apr. 3, 2018, 10:31 AM),
http://www.scotusblog.com/2018/04/belief-evaluation-justices-reject-honest-labor-standards-act-protections-for-company-staff-at-car-dealerships/

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