GNYADA February 2016 Newsletter

Beck Chevy vs. GM Court Date Set for March 22

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The New York State Court of Appeals has

laws, and the fairness of the manu- facturer’s attempted shutdown of Beck Chevrolet, for failing to meet it. GNYADA has filed an Amicus Brief opposing GM’s statewide sales stan- dard and defending the Yonkers deal- ership in maintaining their right to stay in business. The Association will be appearing as a friend of the court during the March proceedings, where it will present this brief which reveals

key issues supporting Beck’s posi- tion.

announced it will hear arguments in the case of Beck

The court’s ruling will impact all dealers in New York State. The Association will keep its members informed on this important case, as it unfolds.

Chevrolet Co. vs. General Motors LLC on March 22nd in Albany. This is the case in which a federal court has asked the State Court to judge the soundness of GM's sales performance standard under New York franchise

Our previous coverage of this case can be found on our website.

Service Advisors Get Their Day in Court — U.S. Supreme Court to Review Service Advisors’ Overtime Exemption

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The U.S. Supreme Court has agreed to determine whether service advisors are entitled to federal overtime pay under the Fair Labor Standards Act (FLSA). The Act explicitly exempts “any salesperson, partsperson, or mechanic primarily engaged in sell- ing or servicing automobiles” from the Act’s overtime pay requirement. Service Advisors primarily sell vehi- cle servicing work to customers, and are usually paid on commission. This has led many dealerships to catego- rize these employees as exempt “salespeople.” The Department of Labor and the courts are in conflict on this issue. Legal precedent supports the dealers, previously holding that service advi- sors are salespeople, and thus exempt from the overtime provisions of the FLSA. However, the DOL changed its previ- ously long-standing enforcement position and stated that it would no longer consider service advisors exempt from overtime under the “salesperson” exemption, concluding

that the exemption was limited “to salespeople who sell vehicles and partspeople and mechanics who serv- ice vehicles.” In March 2015, the US Federal Court of Appeals held that dealership serv- ice advisors were nonexempt employees under the FLSA and must be paid overtime. The Court, relying on the DOL’s guidance, held that because the service advisors neither sold nor personally serviced vehicles, they were not exempt from the over- time provisions of the FLSA. This decision contradicted prior deci- sions, which declined to adopt the DOL’s position. A California dealer- ship appealed the case to the U.S. Supreme Court to address this split and make a final determination as to whether service advisors are exempt from the FLSA overtime require- ments. GNYADA will continue to follow this case and keep members up-to- date on the Supreme Court’s deci- sion. In the meantime, please contact

us if you have any questions about how to classify your service advisors pending the Court’s decision. Jim McGrath, Esq. from Putney, Twombly, Hall & Hirson will discuss wage issues relating to this case at the Spring Labor Law program on April 21. To register, please contact GNYADA at 718.746.5900 or phyllisA@gnyada.com.

Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • February 2016

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