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Posts Tagged ‘exemption’

The Service Advisor Quandary – It’s Now the Supreme Court’s Turn

Posted on: February 2nd, 2016

By: Brad Adler and Tim Holdsworth

For over forty years, courts have almost universally found that auto dealership service advisors were exempt from the FLSA’s overtime requirements under the salesman exemption contained in Section 13(b)(10)(A) of the statute. In contrast, over the same period, the U.S. Department of Labor (“DOL”) waffled on the issue.  Most recently, in 2011, the DOL explained that their regulatory definitions for the exemption were not meant to cover service advisors.

Of course, the Ninth Circuit Court of Appeals never seems to shy away from surprises or from departing from the position of other courts, including in 2015 when facing the service advisors exemption issue. In Navarro v. Encino Motorcars, LLC, the Ninth Circuit bucked the judicial trend on the service advisor issue and found that service advisors were not exempt from overtime under the salesman exemption.

The Ninth Circuit found that the salesman exemption is ambiguous and the DOL’s regulation was reasonable because FLSA exemptions should be construed narrowly. Therefore, the Ninth Circuit found that the service advisors were not covered by the salesman exemption and subject to overtime requirements.  The good news for auto dealerships (at least hopefully) is that the Supreme Court has recently granted cert in the Navarro case, signaling its intent to answer the currently unclear question of whether service advisors are exempt from the overtime requirements of the Fair Labor Standards Act (“FLSA”).

We should expect a decision on this issue from the Supreme Court by mid-year. Please contact us if you have any questions or need advice about how you presently pay service advisors, how you could pay service advisors if the exemption is lost, or any other issues discussed above.

Temporary Flooding May Give Rise to a Takings Claim

Posted on: January 2nd, 2013

By: Ali Sabzevari

A fundamental part of our Takings Clause jurisprudence holds that when the Government physically takes possession of an interest in property for some public purpose, it has a duty to compensate the former owner.  There is a multitude of ways in which government actions or regulations may give rise to Takings Clause liability.  Recently, however, the United States Supreme Court directly addressed the issue of whether government-caused temporary flooding might amount to a compensable taking.

On December 4, 2012, the United States Supreme Court issued a decision, Arkansas Game & Fish Comm’n v. United States, which instructed lower courts not to be deterred from finding that government-caused temporary flooding may result in a taking under the Fifth Amendment of the U.S. Constitution.

The Supreme Court held that “government-induced flooding temporary in duration gains no automatic exemption from Takings Clause inspection.”  By doing so, the Court reversed a Federal Circuit decision which had found that flood conditions needed to be “permanent or inevitably recurring” before the resulting damage would constitute a taking under the Fifth Amendment.

Although Supreme Court precedent had already established that government-induced flooding could constitute a taking, and that a taking need not be permanent to be compensable, under the guise of Arkansas Game & Fish Comm’n, government-caused recurrent floodings, even if of limited duration, may give rise to Takings Clause liability.

Despite ultimately remanding the case to determine whether a taking had occurred, the Supreme Court, in emphasizing the case-by-case approach required to complete this task, highlighted several relevant factors to consider:

1)      Time or duration;

2)      Severity of the government interference;

3)      The degree to which the intrusion is intended or is the foreseeable result of authorized  governmental action;

4)      The character of the land at issue; and

5)      The owner’s reasonable investment-backed expectations regarding the land’s use.

Looking ahead, local governments should be cognizant that a temporary government-caused flooding may give rise to Takings Clause liability.