U.S. Supreme Court Update

Volume 16, Issue 1
February 7, 2017

You will find below a brief update on cases before the United States Supreme Court that impact employers.

FLSA Car Dealership Case Update

You may remember that in June 2016, the U.S. Supreme Court issued its decision in Encino Motorcars, LLC v. Navarro. The issue in this case was whether "service advisors" at car dealerships are exempt from the overtime-pay requirements of the Fair Labor Standards Act (FLSA). As we discussed in a prior issue of the KZA Employer Report , the Supreme Court did not decide the ultimate issue and instead sent the case back to the Ninth Circuit Court of Appeals for a second analysis independent of a 2011 Department of Labor regulation.

The Ninth Circuit Court of Appeals issued its decision on January 9, 2017 and reaffirmed its position that service advisors are not exempt from overtime under the FLSA. The Ninth Circuit Court's position on this issue is in conflict with two other circuit courts. As such, it is possible that this issue will be raised again at the Supreme Court level in the future. In the meantime, however, the Ninth Circuit Court's decision governs employers in Nevada.

Supreme Court Will Decide Whether Class Action Waivers Violate The NLRA

In September, we wrote about the case of Ernst & Young, LLP v. Morris where the Ninth Circuit Court of Appeals ruled that class and collective action waivers in arbitration agreements violate the National Labor Relations Act (NLRA). We explained that because the Ninth Circuit's decision was in conflict with several other circuit courts, this issue was ripe for consideration by the U.S. Supreme Court.

On January 13, the U.S. Supreme Court agreed to here this issue via three cases: the Ninth Circuit's decision in Ernst & Young, LLP v. Morris, the Fifth Circuit's decision in National Labor Relations Board v. Murphy Oil USA, and the Seventh Circuit's decision in Epic Systems Corp. v. Lewis. The Supreme Court's decision in these consolidated cases will be very important to any employer who has adopted or wishes to adopt an arbitration agreement that requires employees to arbitrate claims individually rather than as a class or group. We will keep you posted on these cases.

In the meantime, the General Counsel for the National Labor Relations Board (NLRB) has directed Regional Offices to hold in abeyance NLRB cases involving mandatory arbitration agreements. If you have such a case pending before the NLRB, please contact a KZA attorney to discuss its status.

KZA Employer Report articles are for general information only; they are not intended and should not be construed to be legal advice. Reading or replying to such articles does not establish an attorney-client relationship. In addition, because the subject matters and applicable laws discussed in Employer Report articles are often in a state of change and not always applicable to every type of business entity or organization, readers should consult with counsel before making decisions based on the same.