Supremes Refuse To Interpret FLSA Exemptions In A Narrow Fashion

On April 3, 2018, the US Supreme Court decided Encino Motorcars v. Navarro  and decided 5-4, that FLSA exempts a service adviser at a car dealership from its overtime protections under the exemption for “any salesman . . . primarily engaged in . . . servicing automobiles.” 29 U.S.C. § 213(b)(10)(A).

But, the Court, in dicta went way beyond deciding this case and stated that the FLSA exemptions should not be narrowly construed. As the Court explained:

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.” Scalia, Reading Law, at 363. The narrow construction principle relies on the flawed premise that the FLSA “‘pursues’” its remedial purpose “‘at all costs.’” American Express Co. v. Italian Colors Restaurant, 570 U. S. 228, 234 (2013) (quoting Rodriguez v. United States, 480 U. S. 522, 525-526 (1987) (per curiam)); see also Henson v. Santander Consumer USA Inc., 582 U. S. ___, ___ (2017) (slip op., at 9) (“[I]t is quite mistaken to assume . . . that whatever might appear to further the statute’s primary objective must be the law” (internal quotation marks and alterations omitted)). But the FLSA has over two dozen exemptions in § 213(b) alone, including the one at issue here. Those exemptions are as much a part of the FLSA’s purpose as the overtime-pay requirement. See id., at ___ (slip op., at 9) (“Legislation is, after all, the art of compromise, the limitations expressed in statutory terms often the price of passage”). We thus have no license to give the exemption anything but a fair reading.

This dicta would appear to apply to all of the FLSA exemptions and has the potential to result in a finding that many more employees, such as professionals, administrators, and executives, are exempt, and therefore, not entitled to over-time. 

Query whether courts will follow Justice Thomas' reasoning when deciding over-time cases under state law (as opposed to federal law).

Mitchell Rubinstein

Overtime Must Be Paid For Work Beyond 40 Hours Per Week

Edelmann v. Keuka College, ____F. Supp. ____(W.D.N.Y. April 10, 2017)(registration required), is a typical FLSA case. The plaintiff, a senior technical support technician claims that was entitled to overtime even though he was paid on the basis of a salary because he was not an exempt worker under the FLSA.

The court refused to dismiss the case and rejected the employer's claim that the plaintiff did not allege a violation of the FLSA, reasoning:

Here, Plaintiff alleges that he typically worked 50 hours per week as a salaried employee. ECF No. 1 at ¶31. Plaintiff alleges that, though he had a fixed schedule, he often performed work outside of his predetermined hours. Id. at ¶¶22-27. Specifically, Plaintiff alleges that he was expected to be "on call" from 7 p.m. to 10 p.m. for weeks at a time, id. ¶22, and that he frequently received calls after 10 p.m. Id. at ¶3. Additionally, Plaintiff alleges that he worked college events — like commencements, open houses, and orientations — outside of his normal working hours. Id. at ¶25. Further, Plaintiff alleges that he was required to work Defendant's yearly board meeting, which required him to be available to provide technical support at all times, including overnight. Id. at ¶26.
Those allegations give rise to a plausible inference that Plaintiff worked more than 40 hours in any given workweek. Like the plaintiffs in Nakahata, Plaintiff has not attached time values to each of the instances of extracurricular work that he alleges. See Nakahata, 723 F.3d at 200-201; ECF No. 1 at ¶¶22-27. But unlike the plaintiffs in Nakahata, who might not have had a standard 40-hour schedule in any given week, Plaintiff was a salaried employee who worked fulltime. Compare Nakahata, 723 F.3d at 199 (noting that the plaintiffs alleged "Plaintiffs and Class members regularly worked hours both under and in excess of forty per week") with ECF No. 1 at ¶30 ("Throughout his tenure with [Defendant], [Plaintiff] worked significantly more than 40 hours each and every week."). Plaintiff's allegations are more plausible than the allegations at issue in Lundy for the same reason. Any work performed in addition to his standard, fulltime schedule necessarily adds up to an amount great than 40 hours. Because Plaintiff has alleged that, in addition to his fulltime schedule, he frequently worked evenings and weekends, his allegations give rise to a plausible inference that he worked more than 40 hours per week. See ECF No. 1 at ¶¶22-27.

House Passes Bill Authorizing Private Sector Employers To Pay Comp Time Instead of OT

On May 2, 2017, the U.S. House of Representatives passed HR 1180. A CNN news story about that Bill is available here. If the Senate passes the Bill in its current form, President Trump indicated that he will sign it into law.

The Bill amends the 1938 Fair Labor Standards Act with respect to private sector employers only. The Bill authorizes, but does not mandate, private sector employers to provide compensatory time off at time and half for overtime. An employer can only provide compensatory time off under the conditions as stated in Bill as follows:

An employer may provide compensatory time to employees under paragraph (1) only if such time is provided in accordance with—
(A) applicable provisions of a collective bargaining agreement between the employer and the labor organization that has been certified or recognized as the representative of the employees under applicable law; or

(B) in the case of an employee who is not represented by a labor organization that has been certified or recognized as the representative of such employee under applicable law, an agreement arrived at between the employer and employee before the performance of the work and affirmed by a written or otherwise verifiable record maintained in accordance with section 11(c)—
(i) in which the employer has offered and the employee has chosen to receive compensatory time in lieu of monetary overtime compensation; and
(ii) entered into knowingly and voluntarily by such employee and not as a condition of employment. . . .

If enacted into law, I suspect that the highlighted provision above will generate a significant amount of litigation in situations where some employers may mandate that employees agree to compensatory time off in lieu of overtime in order to maintain their jobs.