Overnight Regulation: Supreme Court tells Labor Dept. to explain overtime rule change

Welcome to Overnight Regulation, your daily rundown of news from Capitol Hill and beyond. It’s Monday evening here in Washington and we’re sending the Cleveland Cavaliers a big shout out for their NBA Finals win last night. Way to go, fellas. 

Here’s the latest. 

 

THE BIG STORY 

The Supreme Court said Monday it could not rely on the Labor Department’s interpretation of a law without an explanation. 

In the 6-2 ruling, the Supreme Court said the Labor Department had to explain why it decided to change a longstanding policy on which employees at automobile dealerships are exempt from overtime pay. 

“This lack of reasoned explication for a regulation that is inconsistent with the department’s longstanding earlier position results in a rule that cannot carry the force of the law and so the regulation does not receive Chevron deference,” Justice Antony Kennedy said in delivering the opinion of the court.

{mosads}Chevron deference is a principal of administrative law that requires courts to rely on an agency’s interpretation of a statute.

The case — Encino Motorcars LLC v Navarro — stems from a legal challenge service advisers brought against a Mercedes-Benz dealership in Encino, Calif.

The current and former employees argued that they were entitled to receive overtime pay under a new 2011 interpretation of a 1996 law that made “any salesman, partsman or mechanic primarily engaged in selling or servicing automobiles” exempt from the overtime compensation requirement of the Fair Labor Standards Act.

In its final rule, the department changed its interpretation of the statutory term “salesman” to mean only an employee who sells vehicles but gave little explanation why it decided to abandon its decades-old practice of treating service advisers, who greet car owners, evaluate complaints and suggest repairs and services, as exempt.

The justices sent the case back to the lower courts to interpret which employees the 1996 Fair Labor Standards Act meant to exempt. 

The National Federation of Independent Business hailed Monday’s decision.  

“Federal agencies cannot whimsically flip-flop when interpreting federal law,” Karen Harned, executive director of the NFIB Small Business Legal Center, said in a statement. “Small businesses build their businesses on the expectation that they can rely on longstanding regulatory practices. So if an agency is going to all of the sudden pull the rug out from underneath the regulated community, and change a longstanding interpretation of what the law requires, they need to have a very good justification.” http://bit.ly/28Nc0Ad

 

ON TAP FOR TUESDAY 

The Senate Health, Education, Labor and Pensions Subcommittee on Primary Health will hold a hearing to examine small businesses pooling retirement plans. http://1.usa.gov/28JnAif

The House Rules Committee will mark up the Separation of Powers Restoration Act, a bill to curb regulatory power. http://1.usa.gov/28Jjwcz

 

TOMORROW’S REGS TODAY

The Obama administration will publish 235 new regulations, proposed rules, notices and other administrative actions in Tuesday’s edition of the Federal Register.

–The Department of Energy (DOE) will delay new efficiency rules for compressors.

The Energy Department’s Office of Energy Efficiency and Renewable Energy proposed new energy conservation standards for compressors in May, but now is extending the comment period to give the public more time to consider the changes.

The public now has until Aug. 17 to comment. http://bit.ly/28LUlaV

–The Department of the Treasury will issue a new rule for tobacco importers.

The Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau is finalizing permit requirements for tobacco importers.

The new rule extends the permitting period to five years from the current three years.

The rule goes into effect in 30 days. http://bit.ly/28MXhVY

–The Department of the Treasury will also propose new alcohol importation requirements.

The Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau is considering new rules for importing beer, wine, distilled spirits, and malt beverages.

The public has 60 days to comment. http://bit.ly/28KYcYf

 

NEWS RIGHT NOW

GOP senator’s gun bill expected Tuesday. http://bit.ly/28JuMpm

Gun control group dials up pressure on Ayotte ahead of Senate votes. http://bit.ly/28JAFYG

High court won’t review state assault rifle ban. http://bit.ly/28JALQ1

Justices to review president’s power to appoint officials. http://bit.ly/28Kh3nC

Supreme Court to review rights of detained immigrants. http://bit.ly/28JLwBs

Clarence Thomas’s wife blasts ‘bogus’ retirement rumors. http://bit.ly/28Iwolf

Activists to bring millions of dead bees to EPA headquarters. http://bit.ly/28ITEiL

Interior chief reprimands employees on ethics, sexual harassment http://bit.ly/28JX2hr

Warren presses FDA to lift ban on blood donations from gay men http://bit.ly/28Nd1It

House Republicans offer slew of amendments to restrict IRS http://bit.ly/28Kmy43

Nations to review cyber export rules http://bit.ly/28M6xs1

Airbnb wants you to fight for Airbnb-friendly regulations. (SF Weekly). http://bit.ly/28JX86B

 

BY THE NUMBERS 

429,000: Immigrants detained by Immigration and Customs Enforcement over the course of a year. 

33,000: Immigrants in detention centers on a given day. 

The Supreme Court agreed Monday to review whether immigrants who are detained for more than six months while waiting for deportation proceedings deserve a chance to be released on bond. http://bit.ly/28IWBju

 

We’ll work to stay on top of these and other stories throughout the week, so check The Hill’s Regulation page (http://digital-staging.thehill.com/regulation) early and often for the latest. And send any comments, complaints or regulatory news tips our way, tdevaney@digital-staging.thehill.com or lwheeler@digital-staging.thehill.com. And follow us at @timdevaney and @wheelerlydia.

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