Service Advisor Question Sent Back to Ninth Circuit

The Supreme Court issued its decision today in Encino MotorCars, LLC v. Navarro. A background of the case is available, but the question at issue was whether service advisors at car dealerships are exempt from the FLSA’s overtime pay requirements. Reversing the Court of Appeals decision and remanding, the Court directed the Ninth Circuit to determine whether the statute at issue, without regard to DOL guidance, exempted the service advisors at issue. Accordingly, the decision did not answer the question before it but did emphasize that the high court will not give deference to agency action if the agency fails to give adequate reason for its decision. Here, the final agency rule was especially striking as the 2011 rule took the opposite position from the agency’s 2008 proposed rule. The DOL’s failure to provide reasoning for its decision invalidated the claim and the Court found it was not its role to speculate as to what facts or reasoning may support an agency’s decision.