SCOTUS Rules in Favor of Employers on Overtime Exemption

The U.S. Supreme Court recently made a key ruling that may have a ripple effect in future overtime disputes. The case involved a car dealership in California and five of its employees, who work as service advisors. The lawsuit arose when the dealership refused to pay these employees overtime pay.

Section 13(b)(10)(A) of the Fair Labor Standards Act expressly states that auto mechanics, auto sales people and auto parts dealers are exempt from overtime pay. The question was whether auto service advisors also fell under this category. The Court found that the job responsibilities of service advisors are similar to other jobs in this category, and therefore these employers should have the same exempt status designation.

Broader Implications

The verdict in this case not only affects service advisors; it has far-reaching impacts. In its ruling, the Court nullified the long-standing Narrow Construction rule—which benefits employees in overtime disputes. Under this rule, any overtime lawsuit started from the presumption that the employee is non-exempt. It was the employer’s responsibility to “plainly and unmistakably” prove otherwise.

However, the new ruling lessens the burden of proof for the employer. With the Narrow Construction rule gone, the employer only needs to show that their interpretation of their employee’s exemption scenario seems consistent with the law—not that their exemption qualification is an undeniable fact. Some experts worry that this new ruling will make it easier for employers to convince courts that their employees deserve an overtime exemption.

If you believe you are being unfairly cheated out of overtime pay, it’s particularly important to seek out the help of an experienced wage and hour attorney who has a full arsenal of legal tools to advocate on your behalf.