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martes, 3 de abril de 2018

Supreme Court delivers Trump victory on mandatory overtime law

Piece by piece, by gradually overturning laws and ruling executive orders unconstitutional, former President Barack Obama’s “legacy” is being systematically eroded. The U.S. Supreme Court is just the latest government entity to upend Obama’s liberal agenda, this time by reversing a 2011 Labor Department decision that granted overtime pay to service advisors from the automobile industry.

Classic Obama overreach

In a classic example of federal overreach, the Obama administration ignored a 1966 amendment to the Fair Labor Standards Act (FLSA) which exempted “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles” from mandatory overtime pay by arguing that service advisors are not salesmen or service technicians. Since then, a series of legal proceedings followed and resulted in conflicting lower court rulings and two Supreme Court cases.

The 5-4 decision with a conservative majority considers service advisors or the employees at auto dealerships who greet customers and advise them on vehicle maintenance and repairs, exempt from overtime pay is noteworthy because it defines how much authority presidents have to interpret the FLSA. If the court had instead ruled to affirm Obama’s “procedurally defective” interpretation, 18,000 car dealerships would be liable for back pay to tens of thousands of their employees.

This retroactive overtime pay is precisely what Hector Navarro sought in 2012 when he sued Encino Motorcars, and the 9th Circuit Court of Appeals agreed with the service advisor based upon the Labor Department’s decision one year earlier. However, in 2014 the Supreme Court heard an appeal from the dealership and overturned the holding — only to have the highly liberal, San Francisco-based 9th Circuit again rule in favor of service advisors when the case returned to their jurisdiction, arguing that these auto workers neither sold cars nor serviced them.

Finally, the Supreme Court agreed to hear a second appeal from Encino Motors and ruled on Monday that service advisors are exempt from mandatory overtime pay. Justice Clarence Thomas explained the majority’s ruling:

A service adviser is obviously a “salesman.” The ordinary meaning of “salesman” is someone who sells goods or services, and service advisors “sell [customers] services for their vehicles.” Service advisors are also “primarily engaged in . . . servicing automobiles.” If you ask the average customer who services his car, the primary, and perhaps only, person he is likely to identify is his service advisor.

Representing the minority opinion, Justice Ruth Bader Ginsburg dissented, arguing that the service advisors at Encino Motorcars “work regular hours, 7 a.m. to 6 p.m., at least five days per week, on the dealership premises. Their weekly minimum is 55 hours.” She was joined by Justices Stephen G. Breyer and Elena Kagan.

As Chief Justice John G. Roberts Jr. and Justices Anthony M. Kennedy, Samuel A. Alito Jr., Neil M. Gorsuch and Thomas argue, it is absurd to argue that service advisors are not in the business of selling parts and services, and Congress’s intent was always to exempt these and other “managerial employees” from the overtime mandate. The 1966 congressional amendment provided a narrow exception for “any salesman, partsman or mechanic” who is “primarily engaged in selling or servicing automobiles.”

Splitting hairs

The incredibly liberal (and most overturned) 9th Circuit previously upheld Obama’s interpretation of the FLSA by insisting that the word “or” within a single sentence of act changed everything. Because service advisors were responsible for selling and servicing, the liberal judges from the 9th Circuit argued, they were exempted from the FLSA because it applied to selling or servicing.

Justice Sotomayor and the minority agreed with the lower court holding, writing:

Because service advisers neither sell nor repair automobiles, they should remain outside the exemption and within the act’s coverage.

Due to a conservative majority in the Supreme Court, however, common sense reigns. “[T]he use of ‘or’ to join ‘selling’ and ‘servicing’ suggests that the exemption covers a salesman primarily engaged in either activity,” Thomas wrote.

President Donald Trump is expected to continue rolling back Obama’s interpretation of overtime by completely rewriting labor rules. This includes Obama’s expansion of mandatory overtime pay to include anyone making up to $47,000, a reform that was overturned in 2016 by a Texas court. Previous administrations kept the overtime threshold at $23,000.

Car dealerships are already subject to a complex and restrictive regulatory burden, something that the Trump administration has pledged to address throughout multiple industries. Although unions oppose any reforms out of fear that employers will exploit their workers and misclassify their duties, businesses are applauding these changes because they contribute to flexible scheduling and wage management.

For conservatives who value freedom for employers to make their own policies about pay and overtime, this is great news. It is decisions like these that demonstrate why the economy under Trump is doing so well.


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