Looking under the hood and figuring out what is wrong is a popular cliche, but on Wednesday, the Supreme Court examined whether the workers who actually do that should be guaranteed overtime pay.
The justices heard oral arguments in Encino Motorcars v. Navarro, a case involving whether the Fair Labor Standards Act's overtime rules extend to "service advisers" at auto dealerships. It is the second time it has heard the case.
Service advisers are the dealership employees who tell customers what repairs or other work their cars need. Congress exempted them from the overtime regulation in 1966, but in 2011, the Obama administration changed the rule and said service advisers should be able to claim overtime pay. Though the case involves a limited class of employees, it is significant because the justices will be weighing in on just how expansive the FLSA's overtime coverage should be. The courts and the Trump administration have been systematically chopping away at Obama's effort to expand federal workplace regulations.
Federal law requires that employees be paid time and a half after 40 hours in a week but allows "managerial employees" to be exempted, which has become a controversial issue in recent years. Congress in the mid-1960s included a narrow exception for "any salesman, partsman or mechanic" who is "primarily engaged in selling or servicing automobiles," reportedly to exempt service advisers who worked odd hours to help with people buying farm equipment. Liberal groups contend the various exceptions to the FLSA's protections allow employers to exploit workers by misclassifying their duties, but business groups say the exception allows managers and workers to create flexible work schedules.
Justices spent most of Wednesday's arguments debating the minutiae of what dealership employees do. "What we're doing is we're trying to parse the difference between 'engaged in' and 'involved in' in a fairly technical statute involving one of 40,000 different kinds of workers as part of a very general statute," Justice Stephen Breyer said.
Justice Ruth Bader Ginsburg said the service adviser exception may not match Congress' original intent. "How about Congress got it wrong in what they perceived [what] the partsman job was? They were right about the partsmen who work on farm equipment, but they were wrong about the partsman who work on automobiles, who work regular hours."
The Trump Labor Department is rewriting the entire overtime rule. It is expected to roll back the Obama administration's expansion of the rule to automatically cover any employee who makes up to $47,000 annually, more than twice the level under previous administrations. The $47,000 overtime threshold a was struck down by a Texas court in 2016.
The Encino case will be another test of efforts by the Obama administration to engage in major rulemakings by bypassing Congress and reinterpreting existing laws. The Supreme Court heard a case involving whether employers can force employees to submit to arbitration to resolve disputes, challenging a 2015 ruling by National Labor Relations Board. In April, the Justices ruled 7-1 to limit the subpoena power of the Equal Employment Opportunity Commission.
Obama administration allies contend that it was right to eliminate the service adviser exemption, because the overtime rule was meant to cover as many workers as possible. "The narrowing of the exemption ... is consistent with the FLSA's evolution in general. Over the years, Congress has expanded the FLSA's protections while limiting its exemptions," wrote Sens. Patty Murray, D-Wash., Sherrod Brown, D-Ohio, and Jack Reed, D-R.I., in an amicus brief filed with the Supreme Court.
Business groups counter that Congress specifically wrote the exception into the rule and therefore only it can remove it. "There is no basis in either law or logic to infer that Congress means more (or less) than it says in a statute, simply because the legislation might be described as 'remedial,'" the Chamber of Commerce wrote in an amicus brief.