WASHINGTON (June 20, 2016) — The U.S. Supreme Court has declined to rule on a case that could have made overtime pay for auto dealership service advisers the law of the land.
In a 6-2 vote, the justices vacated an earlier decision by the 9th U.S. Circuit Court of Appeals that service advisers are eligible for overtime pay because they are not covered by an exemption for car dealership vehicle salespeople, mechanics and parts department workers to the overtime requirements in the Fair Labor Standards Act.
The high court on June 20 directed the circuit court to reconsider its earlier ruling, which broke with previous appeals court rulings dating back to the 1980s and backed a 2011 U.S. Department of Labor regulation on the matter.
The Supreme Court's decision avoided a potentially major disruption to the way service advisers are compensated at many of the more than 16,000 new-car dealerships in the U.S. Many service advisers are paid on commission. A ruling that service advisers are eligible for overtime would have required auto dealers to retool those compensation plans.
Justice Anthony Kennedy wrote the majority opinion to remand the case, and was joined by Justices John Roberts, Ruth Bader Ginsberg, Stephen Breyer, Sonia Sotomayor and Elena Kagan. Justices Clarence Thomas and Samuel Alito dissented.
This report appeared on the website of Automotive News, a Detroit-based sister publication of Tire Business.