Car Dealerships

News & Analysis as of

What Is The Section 7(i) Exemption And Does It Apply To Auto Dealer Service Advisers?

Over the summer, the U.S. Supreme Court punted on the question of whether “Service Advisers” or “Service Writers” at auto dealerships fall within the Fair Labor Standards Act’s exemption for “any salesman, partsman, or...more

Are Your Pay Practices Still Compliant?

By now you have likely heard about a recent Supreme Court decision and a change in federal wage and hour regulations that have a direct impact on the retail automotive industry. The good news is that the Supreme Court...more

California High Court Rules that Contract Principles Govern Who Decides the Availability of Class Arbitration Under an Arbitration...

On July 28, 2016, in Sandquist v. Lebo Automotive, Inc., the California Supreme Court (the “Court”) held that the underlying arbitration agreement, as interpreted under California contract principles, should determine whether...more

Dealerships On Pins And Needles After Latest Union Pin Decision

Doug Niedermeyer is not the most sympathetic character in American film, but any dealership manager faced with employees who want to wear union pins, buttons, or other insignia might understand his frustration. To many...more

Auto Dealers Lead the Way for Ignoring Certain Federal Regulations

Not all federal regulations reflect a rule of law. In fact, some are not even given deference by the courts as a legitimate interpretation of the law. The U.S. Supreme Court recently concluded that certain federal regulations...more

Texas Court Of Appeals Reduces $115 Million Punitive Award To A Mere Shadow Of Itself

Courts applying BMW and State Farm often emphasize the Supreme Court’s admonition that the constitutional line is not “marked by a simple mathematical formula”—typically when rejecting a defendant’s argument that the ratio of...more

FTC Consent Order Creates Uncertainty for Advertising of Credit, Lease Offers

A recent Federal Trade Commission (FTC) consent order with two Ohio auto dealers creates uncertainty not only for auto dealers, but also for all other businesses advertising credit or lease offers. The order settled...more

Have a Contract in Canada? Your Class Action Risk is Greater Than You May Think

Non-Canadian companies: welcome to the Canadian class action party. In recent years, Canadians have increasingly begun to recognize and actively manage the major business risk posed by class actions, as more and more...more

Defence & Indemnity - June 2016: II. LIABILITY ISSUES #3

Both the legal/registered owner and lessor and the beneficial owner and lessor of a vehicle are vicariously liable for the lessee’s vehicular negligence but only to the liability cap for lessors. Graham (Litigation...more

Buyer Beware: Used Cars Subject to Different Protections Than New Cars

The new highway bill that recently was signed into law seems to have been influenced by the automotive industry because it does not require used-car dealerships to make repairs on vehicles with open recalls, leaving buyers...more

Supreme Court Punts on Whether Service Advisors Are Exempt from FLSA Overtime Premium Pay

The United States Supreme Court recently issued its long awaited decision in Encino Motorcars, LLC v. Navarro. At issue in the case was whether “service advisors” employed by car dealerships are exempt from the Fair Labor...more

Supreme Court Passes Automobile Dealership Service Advisor Exemption Issue Back to Lower Court

On June 20, 2016, the U.S. Supreme Court declined to provide a definitive opinion on a pay issue that has concerned automobile dealerships for years. The question involves whether dealership service advisors fall under the...more

SCOTUS Says DOL Needs to Explain Itself If It Wants Deference to its Regulations

This week, the Supreme Court dealt a blow to the Department of Labor’s rulemaking procedures, criticizing the agency for explicitly changing its long-standing treatment of automobile service advisors as overtime exempt while...more

Supreme Court Criticizes Labor Department for Arbitrary Overtime Regulations

The Supreme Court ruled on June 20, 2016, that the U.S. Department of Labor’s (“DOL”) 2011 regulation removing a long-standing exemption to overtime pay for auto service advisors was “procedurally defective.” In a 6-2...more

Supreme Court Rejects Deference to DOL Regulation on FLSA Exemption Due to Failure to Provide Reasoned Explanation for Change

The Supreme Court granted certiorari in Encino Motorcars, LLC v. Navarro, No. 15-415 (June 20, 2016), to resolve a circuit court split regarding whether “service advisors” are exempt from receiving overtime pay under the Fair...more

The Supreme Court - June 2016 #5

The Supreme Court of the United States issued decisions in five cases today: RJR Nabisco, Inc. v. European Community, No. 15-138: The European Union and 26 of its members filed an action in District Court against...more

Putting the Brakes on the DOL: USSC Finds that DOL Not Entitled to Deference on Service Manager Overtime Regulation

Yesterday, in Encino Motorcars v. Navarro, No. 15-415, the U.S. Supreme Court vacated a Ninth Circuit ruling that had deferred to a Department of Labor 2011 regulation that auto service advisors were nonexempt and should...more

Supreme Court Calls “Do Over” On FLSA Service Advisor Exemption Rule

In a 6 to 2 decision, the U.S. Supreme Court today continued the flip-flop-flip on determining whether an automobile dealership’s service advisors are exempt from the FLSA’s overtime requirements. The Court vacated and...more

Car Dealership’s Service Advisors’ Overtime Controversy Stalls in the Supreme Court

On June 20, 2016, the Supreme Court of the United States issued a ruling regarding the Fair Labor Standards Act’s (FLSA) overtime exemption for “any salesman, partsman, or mechanic primarily engaged in selling or servicing...more

Supreme Court Declines to Give Chevron Deference to Agency Regulation that Departed from Prior Agency Practice

On June 20, 2016, the U.S. Supreme Court issued a 6-2 opinion in Encino Motorcars, LLC v. Navarro et al., holding that the U.S. Department of Labor (Labor Department) was not entitled to receive Chevron deference with respect...more

The Supreme Court Shoots Down DOL Regulations, But Declines To Rule Whether Service Advisors are Exempt From Overtime Pay...

Yesterday, the United States Supreme Court issued its long-awaited decision in the Encino Motorcars, LLC v. Navarro case, that many hoped would resolve the issue as to whether Service Advisors at auto dealerships are exempt...more

Dol Fumbles…Scotus Punts

On June 20, 2016, the U.S. Supreme Court issued its latest decision (read, “non-decision”) in Encino Motorcars, LLC v. Navarro. The case involves a decades-old question of whether auto dealership “service advisors” are exempt...more

Supreme Court Decides Encino Motorcars, LLC v. Navarro

On June 20, 2016, the U.S. Supreme Court decided Encino Motorcars, LLC v. Navarro, holding that a Department of Labor formal regulation that reversed the Department’s longstanding informal position exempting service advisors...more

Failure To Pay Costs Did Not Materially Breach Arbitration Agreement In Light Of Legitimate Dispute As To The Forum

A New Jersey appellate court affirmed an order dismissing a class action and compelling individual (non-class) arbitration. The underlying arbitration agreements provided that the defendant car dealership would pay all costs...more

Tattoos, Haircuts, And Head Coverings – We're Not In Kansas Anymore

As our society has evolved and changed, standards for acceptable dress and appearance have also been transformed. For example, tattoos, once seen mostly on bikers and those who had served in the military, are now mainstream....more

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