Case: Encino Motorcars V. Navarro

The example selected is a case that was overturned by the Supreme Court in 2016. The case is Encino Motorcars v. Navarro and disputed the fact that service advisors at automobile dealerships are exempt employees who are not qualified for overtime pay under the federal Fair Labor Standards Act (FLSA). The FLSA excludes any salesman, parts man, or mechanic that is involved in selling or servicing automobiles from the overtime rules. Navarro, a service advisor for Encino Motorcars, and other plaintiffs sued Encino for not compensating overtime pay when they worked over 40 hours a week. The district court denied the overtime claim based on the FLSA law that exempts overtime pay for their profession. The U.S. Court of Appeals for the Ninth Circuit reversed the district court’s ruling and claimed that automobile industry employees were not exempt from overtime pay. The appellate court supported its ruling by referring to the Department of Labor’s 2011 decision that service advisors were not exempt employees under the FLSA. This was contradictory to the decision the Department of Labor made in 1987 (“Encino Motor Cars,” n.d.).
The Supreme Court dissolved the appellate court’s decision because the Department of Labor’s 2011 position on FLSA overtime regulations did not provide sufficient reasons for …show more content…
A change in an employee’s basic job duties or a change in salary could mean the exempt requirements are no longer satisfied and the employee is eligible for overtime pay. Employers should rely on legal experts and HR experts to help with issues of misclassification and possible back pay. The ticket to prevent these kinds of situations is to design an accurate and satisfactory job description and make sure it is being followed (Dunlap,