WASHINGTON -- The National Automobile Dealers Association cheered a U.S. Supreme Court decision challenging a Labor Department ruling that sought to make dealership service advisers eligible for overtime pay. But an attorney for one of the advisers involved in the case said the fight is far from over.
In its 6-2 ruling last week, the high court rejected a 2015 decision by the 9th U.S. Circuit Court of Appeals, saying the appeals court improperly based its decision on a faulty regulation adopted by the Labor Department in 2011. It vacated the lower court's ruling and sent it back to be reconsidered.
In a statement, NADA spokesman Jared Allen said the trade group was pleased that the high court "expressly rejected" the Labor Department's ruling and sent the case back to the circuit court for "a more appropriate review of the statute."
The ruling could help resolve the current "circuit split" between the 9th Circuit Court and other appeals courts that have found service advisers to be exempt from the overtime provisions of the Fair Labor Standards Act.
Yet the high court stopped short of settling once and for all the broader question of whether those provisions should apply to service advisers, leaving open the possibility that the dispute could surface again.
At the heart of the dispute is the wording in the Fair Labor Standards Act's overtime provisions that exempts "any salesman, partsman or mechanic primarily engaged in selling or servicing automobiles." Past appeals court decisions, and the Labor Department itself, have held that service advisers are included in that exemption. But the Labor Department changed course in 2011, and the circuit court deferred to that new interpretation.
Last week's high court ruling said the Labor Department's 2011 about-face was done without adequate justification for departing from a long-held precedent; writing for the majority, Justice Anthony Kennedy described such changes as "arbitrary and capricious."
Kevin Steinberg, an attorney representing one of the service advisers, said since the high court's ruling did not resolve the underlying ambiguity, the question of service advisers' eligibility for overtime remains open.
"The quest to clarify that service advisers are non-exempt is significantly bolstered," he said.
