U.S. Supreme Court Agrees to Review Ninth Circuit Ruling Denying FLSA Exempt Status To Service Advisors at Automobile Dealerships

Navarro v. Encino Motorcars, LLC, is a wage and hour case brought by five service advisors who worked at a California automobile dealership, seeking overtime pay under the Fair Labor Standards Act (FLSA) and state law.  The dealership obtained dismissal of the FLSA claims, citing FLSA section 13(b)(10), which exempts from federal overtime “any salesman . . . primarily engaged in selling or servicing automobiles or trucks.”  But last March, the Ninth Circuit Court of Appeals reversed the dismissal and held that service advisors do not qualify for the exemption.  Its decision was notable because it reversed more than 40 years of case law, and even previous Department of Labor (DOL) interpretations, holding that service advisors qualify for this exemption because they are sales personnel who are primarily engaged in servicing automobiles.  The Ninth Circuit’s principle rationale for finding the exemption inapplicable was a recent change by the DOL in its interpretation of the exemption to exclude service advisors.  The Ninth Circuit held that because the DOL is the agency charged with interpretation of the FLSA, its interpretation of an ambiguous statute is entitled to deference.

The dealership then petitioned the U.S. Supreme Court for certiorari review.  Given the widespread impact of this decision on the industry, which has depended on the exemption for decades, the petition was supported by amici curiae (friends of the court) National Automobile Dealers Association (NADA), California New Car Dealers Association (CNCDA), and automobile dealers associations in each of the other states in the Ninth Circuit, who filed a brief urging the Supreme Court to review the case.  On January 15, 2016, the Supreme Court agreed to review the Ninth Circuit’s decision.  The Supreme Court’s grant of certiorari likely signals its skepticism of the Ninth Circuit’s decision, particularly given the long history of industry reliance on the exemption.  Stay tuned.

Felicia Reid of Hirschfeld Kraemer represents amici NADA, CNCDA and the other dealer associations in the Supreme Court proceedings.

California Court Approves FLSA Formula For Flat Bonuses

The California Court of Appeal provided employers with a small New Year’s gift for 2016: on January 14, in Alvarado v. Dart Container Corporation of California, it affirmed that an employer’s formula for calculating overtime, based upon federal law rather than upon a formula in the California Department of Labor Standards Enforcement (DLSE) Manual, was lawful.  Continue reading

What Does California’s New E-Verify Law Mean For Employers?

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Our blog post on January 5, 2016 summarized California’s new E-Verify law and other updates.  So what should California employers do differently now with respect to I-9s and E-Verify?  Enrollment in E-Verify remains voluntary under federal and California law except for federal contractors with the FAR provision in their contract.  California’s new law (AB 622) added significant penalties at the state level for E-Verify violations in addition to federal penalties.  Continue reading

California To Enact Broad “Fair Pay” Law Today

In an effort to close the wage gap between working men and women, the California legislature recently passed Senate Bill 358 (the “Fair Pay Act”) to amend California’s current equal pay law.  Governor Jerry Brown is expected to sign the bill today, and the amended law will take effect on January 1, 2016.  Public and private employers should take note of the amended law’s most significant changes, which are as follows: Continue reading

The NLRB’s “Radical” Joint Employer Decision Is The Biggest Win For Unions In Years

Yesterday, in Browning Ferris Industries of California, Inc., the National Labor Relations Board (NLRB) overruled 30 years of authority on the issue of joint employers.  In a decision which two Board Members called the “most sweeping of recent major decisions,” a slim 3-2 majority of the NLRB found that any company which has the right, whether used or unused, to “share or codetermine” the terms and conditions of employment are employers subject to its jurisdiction.  This “radical departure” from many years of decisions, if not reversed, will drastically broaden the NLRB’s mandate to thousands of new employers across the country. Continue reading

Los Angeles County To Raise Minimum Wage To $15 Per Hour

Late last month, the Los Angeles County Board of Supervisors directed the County Counsel to take steps to increase the the minimum wage for the entire county in the same increments as in the ordinance passed recently by the L.A. City Council.  Ultimately, if this becomes law, the minimum wage will increase to $15 per hour throughout the entire county, not just in the city of Los Angeles and after 2021, the minimum wage will increase automatically along with the rate of inflation.  The law is expected to be considered by the L.A. County Board of Supervisors in the Fall.   Continue reading

The ADA At 25: Mental Disabilities In The Spotlight

Last year, we marked the 50th anniversary of the Civil Rights Act of 1964.  This year the Americans with Disabilities Act turns 25.  Two laws with a shared, broader goal—to level the playing field and eradicate unlawful discrimination—but also two laws with different pasts and likely different futures.  One of the key distinctions is this: we can all grasp what a “race” or “national origin” might be, but can you really peg, with certainty, what a “disability” is?  Probably not, because the legal meaning of this term is constantly evolving.  When, for example, we see someone in a wheelchair, or an amputee with crutches, we think there is certainty.  But what if the visual cues are not present?  What if the disability has nothing to do with one’s fingers and toes being intact, but is “from the neck up”?  If the last 25 years of the ADA have demonstrated anything, it is that the realm of mental, psychological and cognitive disorders and afflictions is one of the most significant and uncertain frontiers in employment disability discrimination law.  Two recent decisions, Weaving v. City of Hillsboro (9th Circuit) and Higgins-Williams v. Sutter Medical Foundation (California Court of Appeal), provide some clues as to where we are going. Continue reading

NLRB Judge Orders Reinstatement Of Employee Who Made Racist Taunts Toward African-Americans

The National Labor Relations Board promotes itself as a government agency that “safeguards employees’ rights,” but you would not know it from a recent ruling upholding racist statements made by union supporters on a picket line.  Earlier this month, in Cooper Tire & Rubber Company an administrative judge of the NLRB found that racist taunts made by strikers against African-American employees crossing a picket line were protected under the law.   Continue reading

California Amends Paid Sick Leave Law

This week, California Governor Jerry Brown signed into law an amendment to the Healthy Workplaces, Healthy Families Act of 2014, a law passed last year which requires employers to provide paid sick leave. The law has been incredibly confusing for California employers and the amendments were designed to correct some of the more obvious drafting errors in the law.  The major changes are described below. Continue reading