Overtime law exemptions pit management, labor
If you approach a newcar dealer’s front door, you’re likely to be intercepted in the parking lot by a nicely dressed employee who will strike up a friendly conversation, hand you a business card, ask what you’re interested in, talk knowledgeably about the different models, maybe try to nudge you into revealing your budget and sense of urgency, encourage you to take a test drive, ride with you if you do, and, if you’re not ready to make up your mind today, ask for your phone number and email and make a point of following up.
If, on the other hand, you drive into the dealership’s service bay, you’re likely to be met by a person dressed for a garage, holding a clipboard, who will ask what brings you in today, whether you have an appointment, and (if repairs are called for) what seems to be the problem. The person will then tell you where to leave your car, estimate how long the work will take and what the cost will be, promise to call when it’s ready, and when you return go over the details before taking your payment.
Are those two people involved in the same line of work?
The answer matters a lot for purposes of the federal Fair Labor Standards Act. Not every company is covered by FLSA, but those that are must pay time-and-a-half overtime for hours worked in excess of 40 a week. However, the act contains numerous exceptions. Among the workers who aren’t entitled to overtime are “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles” at a covered dealership.
The person who takes you around the showroom is certainly a “sales(person) … primarily engaged in selling ... automobiles.” The grease monkey in the back is clearly a “mechanic primarily engaged in … servicing automobiles.” But it’s not so obvious that the person with the clipboard who greets drivers in the service bay belongs to any of the various categories offered by the statute’s various possible combinations of terms.
Last month the U. S. Supreme Court wrestled with the issue in a case called Encino Motorworks v. Navarro. Encino Motorworks’ service providers were required to be on the job 11 hours a day, from 7 a.m. to 6 p.m., five days a week. They claimed to be entitled to overtime for the last 15 hours of their workweek. The Department of Labor and the Obama administration’s Department of Justice agreed. But the company took a different view and the fight was on. Last month’s decision marked the second time the case reached the Supreme Court. The earlier decision turned on a technical (but potentially far-reaching) question of administrative law.
This time, the justices decided on a 5-4 vote that service advisers are a variety of automobile salesperson. The majority recognized that the statute does not directly address the status of service advisers, but concluded that their job is to “sell customers services for their vehicles,” making them salespeople. That sounds right, until you consider that customers who bring their cars in for warranty work or pursuant to a recall will spend time with a service adviser only to leave the dealership with something of value without laying out a penny. That’s the opposite of ordinary salesmanship.
Then, too, service advisers present themselves to customers as schedulers, estimators, cashiers and, as the job title says, advisers. Providing those services, even for a price that’s rolled into the cost of repairs, isn’t exactly the same as servicing vehicles. Aggressive upselling might be part of the job at certain dealerships. But when the statute speaks of “primarily engaged,” should the part be treated as the whole?
The dissenting justices didn’t think so. Congress carved out three specific exemptions from the general overtime law, they argued, and it wasn’t for the courts to add a fourth category.
The majority opinion, in my view, presents a plausible way to interpret the statute. As does the dissent. In baseball, a tie goes to the runner. When the ordinary rules of statutory interpretation produce a tie, how does a court decide which view prevails?
A recent column discussed the difficulty of characterizing the Roberts Court (or any court) as pro- or anti-business. A decision in favor of banks, for instance, might harm small-business customers. But the Encino Motorworks case involved a classic ideological fault line: management versus labor. The five justices in the majority were Republicans, while the four dissenters were Democrats.
Questions of statutory interpretation aren’t normally seen as political. But, just as with federal overtime law, there are exceptions.