In 1971, the DOL exercised its rulemaking authority, and issued a regulation defining the “salesman” exemption to the FLSA’s minimum wage requirements (29 USC 213(b)(10)(A)) to apply only to auto dealers’ employees who sell vehicles, not to service advisors who sell the dealership’s repair services. That rule was judicially questioned, and in 1978 the DOL adopted by less formal means, a rule that treated service advisors as exempt salesmen. In 2011, the DOL re-adopted a regulation taking its original position on the issue, but did so without a reasoned explanation for its switch of positions and without adequate consideration for the reliance interests at stake given that employers had built compensation structures based on DOL’s decades-long adherence to the rule it overturned in the 2011 regulation. The 2011 regulation is, therefore, not entitled to judicial deference, and the lower court must interpret the statute on its own, without giving the DOL’s current position any weight.
United States Supreme Court (Kennedy, J.; Ginsburg & Sotomayor, JJ., concurring; Thomas & Alito, JJ., dissenting); June 20, 2016; 2016 WL 3369424