Supreme Court Rules in Favor of Car Dealerships in Overtime Suit

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A recent Supreme Court ruling found service advisers at car dealerships to be exempt under federal law from overtime pay requirements – much like car salesmen and mechanics. The ruling came down 5-4 that service advisers are sales people (even though they also fulfill additional duties such as greeting customers, and proposing various repair service, etc.) The ruling will affect more than 18,000 dealerships across the nation that together as a whole employ over 100,000 service advisers alone.

The case involved a Mercedes Benz dealership out of Encino, California and several of their current and former service advisers. Each side in the case interpreted the Fair Labor Standards Act differently…”any salesman…primarily engaged in selling or servicing automobiles” doesn’t have to provided overtime compensation.

The dealership’s arguments were based on their interpretation that the definition of salesman clearly included the service advisers. Their range of duties includes helping to diagnose mechanical issues, preparing price estimates for vehicle repairs, etc. Service advisers argued that they were not included in the definition of “salesman” as intended by the Fair Labor Standards Act.

In a majority opinion, Justice Clarence Thomas wrote that the “ordinary meaning of ‘salesman’ is someone who sells goods or services.” According to this ordinary meaning of the word, service advisers are, in fact, salesmen. Justice Ruth Bader Ginsburg dissented arguing that because the service advisers do not sell or repair vehicles, they should not be exempt from overtime.

The Department of Labor changed its interpretation of the Fair Labor Standards Act in 2011; which led the issue to the high court. For decades prior to the 2011 change, the department operated under the assumption that employers were not required to provide service advisers with overtime compensation.

This decision was the second time the court has ruled on this case. The earlier litigation resulted in the U.S. Court of Appeals for the 9th Circuit ruling that service advisers were entitled to overtime. In 2016, after the death of Justice Antonin Scalia, the overtime question was sidestepped by an eight-member Supreme Court; advising the appeals court to take another look at the case. The appeals court again ruled in favor of service advisers.

The Supreme Court ruling in favor of car dealerships will have affect dealerships and service advisers nationwide.

If you have questions about overtime eligibility or overtime compensation as required by employment law, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Home Depot Faces Former Employee's Allegations of Overtime Violations

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Marco A. Batani, out of San Diego, recently filed suit against Home Depot, alleging unlawful business practices and failure to pay overtime. The complaint was filed January 2018 in U.S. District Court for the Southern District of California. In Batani’s complaint, it states that he was employed at Home Depot between 2016 and 2017 as a sales consultant, but that he was misclassified as an outside salesperson. Yet his duties while on the job consisted of mainly non-exempt tasks.

In promotional materials describing potential careers with The Home Depot, the one-stop shop for customers building a home, the company describes a warm workplace culture. The company website states that they couldn’t have “done it without the culture and feeling of home and family among the associates in our stores, distribution centers and corporate office.” Yet the claims made by Batani in the recent California overtime lawsuit paint a far different picture of the situation.

In Batani’s suit, he claims that during his employment he consistently worked over eight hours per day and more than 40 hours per week – without being provided with the legally required overtime compensation. (According the FLSA, employers are required to provide overtime pay for any hours worked beyond “full time.” The law also defines full time as 8 hours per day and/or 40 hours/week.) 

Batani also alleges that he was not provided with the legally required meal periods and was not reimbursed for all job expenses.

In addition to the above allegations, Batani claims that Home Depot USA failed to provide employees with wages due at separation, failed to provide timely and accurate wage statements, and failed to reimburse business expenses. All of the allegations are in vio0lation of state law.

Batani seeks a trial by jury. He filed suit to seek damages of $100, an aggregate penalty up to $4,000, compensatory and liquidated damages, nominal damages, restitution and disgorgement, punitive and exemplary damages and attorneys’ fees. He also seeks any additional relief the court may deem just in the situation.

If you have questions about overtime pay or if your employer is refusing to provide you with required meal and rest breaks, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Pennsylvania Grocery Salesman Files Suit to Seek Overtime Pay

A Pennsylvania grocery distributor claims he is entitled to overtime pay from his employer. According to the federal suit he filed at the U.S. District Court for the Eastern District of Pennsylvania, Brian Place claims his regular salary didn’t compensate for the number of hours that he worked as Sure Winner Foods’ sales administrator. The Maine based distributor specializes mostly in frozen foods.

Brian Place alleges that the distributor violated the federal Fair Labor Standards Act (FLSA) as well as Pennsylvania’s Minimum Wage Act. Place complains that he worked for Sure Winner Foods from February 2014 through April 2014. During the three month time period, Place traveled to various stores in central and eastern Pennsylvania. His job duties required that he stock products on store shelves for Sure Winner Foods clients. Place alleges that he spent substantially more than a full 40 hour work week on his standard schedule, received a fixed salary and that he was classified as exempt from overtime pay.

According to Mr. Place, his exempt status was incorrect and other employees at the distribution company are in similar positions with no recognition or pay for overtime. He alleges that he and other individuals filling similar positions in the company were (and are) being cheated out of wages they deserve. The suit specifies overtime pay violations specifically between 2011 an 2014. Mr. Place is seeking individual relief and collective relief from Sure Winner, urging other employees to step forward.

According to the Department of Labor site, employers must pay at least time and a half wages to any and all employees who work one or more hours over the 40-hour workweek mark. To discuss any of the many exemptions to the rule, contact the California overtime pay experts at Blumenthal, Nordrehaug & Bhowmik.