Finance and Insurance Managers of Retail Automobile Dealers are Not Entitled to Overtime

These cases involved FLSA suits by Washington and Oregon Finance and Insurance Managers for unpaid overtime.?? In all three cases the district courts ruled in favor of the employees, holding that the managers did not derive commissions from the dealership?s retail activity.?? The Ninth Circuit reversed and granted judgment for the dealerships.?? The FLSA exempts (1) employees of retail or service establishments (2) who earn more than 150% of the minimum wage (3) if more than 50% of the employees? compensation is in the form of commissions on the sales of goods or services. ?The cases involved application of the last factor. ?Despite the law that FLSA exemptions are ?to ?be ?narrowly? construed,? the? Ninth? Circuit ruled that managers who handle the insurance and finance aspects of automobile sales are engaged in the automobile dealership?s retail activity. Essentially the Court ruled that the exemption applied? to? all-commission? based? employees? of retail establishments, and not just those who earn commissions on the sales of retail goods and services.?? ?The employees argued that their commissions were not derived from the sale of the vehicles themselves, so that they did not fall within the exemption.? ?The panel?s decision appears contrary to the plain-language of the statute. ?The panel rejected the employees? analogy to funeral home employees who sell burial insurance, who have been held to be non-exempt and entitled to overtime.? ?Grieg v. DRR, Inc., No. 03-35619 (05/18/05; Pollak (6th Cir.), Trott, Keinfeld).