On Monday of this week, the U.S. Supreme Court reversed the Ninth Circuit when it ruled in Encino Motorcars, LLC v. Navarro that auto dealership service advisors are exempt from the FLSA’s overtime requirements. The justices’ analysis led the five-justice majority to conclude that service advisors fall squarely within the applicable exemption for “any salesman, partsman or mechanic primarily engaged in selling or servicing automobiles.” 29 U.S.C. § 213(b)(10)(A). This case, however, promises broad national impact because the majority rejected the longstanding principle established through decades of FLSA jurisprudence that exemptions should be construed narrowly.
Yes I realize that had my Corporate Divorce series progressed in a linear way, I would have started with The Courtship instead of The Break Up, but employment law metaphors are sometimes unpredictable. In my defense, I note that if you end up in divorce, you must have started with marriage, so there is a certain logic to this after all.
Marriage typically (though not always) starts with courtship, which is the “wooing of one person by another” and the “period during which such wooing takes place.” It occurred to me that the marriage metaphor is particularly apt for the very unique “wooing” that takes place during the employment recruiting process. And, like the courtship process, there is, during this time, some significant insecurities regarding how a love interest (or a prospective employer) might actually feel about you. An employer’s feelings toward a recruit are often, though not always, expressed through financial and other tangible benefits.
How do you test that theory without turning off your suitor? The answer is to use your courtship period to your financial benefit without spoiling the mood. It can be done but it must be done with care.
Section 162(m) of the Internal Revenue Code precludes the deduction by public companies for compensation paid to certain covered employees in excess of $1,000,000 in any taxable year. This limitation on deduction does not apply to performance-based compensation. Such performance-based compensation is deductible so long as the following requirements are met: