The Death of Arnold v. Ben Kanowsky
By Patrick Shea
How many have argued that a position is exempt under the Fair Labor Standards Act, only to have the plaintiff cite the Supreme Court’s decision in Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392 (1960), stating that exemptions are to be narrowly construed? Well, no more.
Yesterday, the Court decided Encino Motorcars LLC v. Navarro, a case that had had already been before the Court in 2016. It resolved the relatively narrow question of whether automobile service advisors are exempt under the statute, focusing principally on interpretive issues, such as considerations of distributive phrasing versus disjunctive phrasing and the significance of three nouns and two gerunds.
But then the Court made this important ruling:
The Ninth Circuit also invoked the principle that exemptions to the FLSA should be construed narrowly…. We reject this principle as a useful guidepost for interpreting the FLSA. Because the FLSA gives no “textual indication” that its exemptions should be construed narrowly, “there is no reason to give [them] anything other than a fair (rather than a ‘narrow’) interpretation.” Scalia, Reading Law, at 363. Slip op. at 9.
Justice Ginsburg’s dissent expresses regret that the Court’s decision overrules a longstanding principle “without even acknowledging that it unsettles more than half a century of our precedent.” Dissenting slip op at 9, n.7.
But lawyers representing employers in misclassification cases will welcome a return to a level playing field when it comes to interpreting exemptions.