In an April 2, 2018 decision of otherwise narrow appeal to most employers (whether the exemption in Section 13(b) (10)(A) of the Fair Labor Standards Act for an automobile “salesman, partsman, or mechanic” applies to “service advisors”), the Supreme Court flatly debunked the well-worn notion that FLSA exemptions are to be construed narrowly.

To be fair, the “narrow construction” principle had support in Supreme Court dicta dating back to the 1940s (see A.H. Phillips, Inc. v. Walling, 324 U.S. 490 (1945) (noting , in an FLSA case, that “[a]ny exemption from such humanitarian and remedial legislation must therefore be narrowly construed”)).  But the high court has walked back this sentiment in the more recent millenium (e.g., Christopher v. SmithKline Beecham Corp., 567 U.S. 142 (2012) (rejecting the argument that precedent requires the Court to construe the outside salesman exemption narrowly)).

 

After today, it’s difficult to defend the “narrow construction” argument as anything more than a misguided maxim.  In the words of the Supreme Court:

The Ninth Circuit … invoked the principle that exemptions to the FLSA should be construed narrowly. . . . We reject this principle as a useful guidepost for interpreting the FLSA.  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.” . . . The narrow-construction principle relies on the flawed premise that the FLSA “‘pursues’” its remedial purpose “‘at all costs.’” … “[I]t is quite mistaken to assume . . . that whatever might appear to further the statute’s primary objective must be the law” . . . . 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. . . . We thus have no license to give the exemption anything but a fair reading.

The decision, from the ultimate authority on all matters FLSA, should be a very welcome one for employers–especially those facing misclassification claims.  The case is Encino Motorcars, LLC v. Navarro (No. 16–1362).

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Photo of Allan Bloom Allan Bloom

Allan S. Bloom is a nationally recognized trial lawyer and advisor who represents management in a broad range of employment and labor law matters. As a litigator, Allan has successfully defended a number of the world’s leading companies against claims for unpaid wages…

Allan S. Bloom is a nationally recognized trial lawyer and advisor who represents management in a broad range of employment and labor law matters. As a litigator, Allan has successfully defended a number of the world’s leading companies against claims for unpaid wages, employment discrimination, breach of contract and wrongful discharge, both at the trial and appellate court levels as well as in arbitration. He has secured complete defense verdicts for clients in front of juries, as well as injunctions to protect clients’ confidential information and assets.

As the leader of Proskauer’s Wage and Hour Practice Group, Allan has been a strategic partner to a number of Fortune 500 companies to help them avoid, minimize and manage exposure to wage and hour-related risk. Allan’s views on wage and hour issues have been featured in The New York TimesReutersBloomberg and Fortune, among other leading publications. His class-action defense work for clients has saved hundreds of millions of dollars in potential damages.

Allan is regularly called on to advise boards of directors and senior leadership on highly sensitive matters such as executive transitions, internal investigations and strategic workforce planning. He also has particular expertise in the financial services industry, where he has litigated and arbitrated cases, including at FINRA and its predecessors, for more than 20 years.
A prolific author and speaker, Allan was the Editor of the New York State Bar Association’s Labor and Employment Law Journal from 2012 to 2017. He has served as an author, editor and contributor to a number of leading treatises in the field of employment law, including ADR in Employment Law (ABA/Bloomberg BNA, Senior Editor), Employment Discrimination Law (ABA/Bloomberg BNA, Final Proof Editor), Cutting Edge Advances in Resolving Workplace Disputes (Cornell University/CPR, Editor), The Employment Law Review (Law Business Research, U.S. Chapter Author), and The Complete Compliance and Ethics Manual (SCCE, Chapter Author).

Allan is a member of the NYSBA’s House of Delegates, sits on the Executive Committee of the NYSBA’s Labor and Employment Law Section, and is a Fellow of the College of Labor and Employment Lawyers. He has been recognized as a leading practitioner by Chambers since 2011.