Rex Heinke Quoted in Law360 and SHRM on Supreme Court Ruling in Encino Motorcars v. Navarro

Rex Heinke, co-head of Akin Gump’s Supreme Court and appellate practice, was quoted in the Law360 article “Attys React To High Court’s Auto Service Advisers OT Ruling” following the Supreme Court’s decision in Encino Motorcars v. Navarro, which vacated a decision by the U.S. Court of Appeals for the 9th Circuit that auto service advisers should be eligible to receive overtime compensation. The Supreme Court ordered the lower court to reconsider the matter without taking into account Labor Department regulations that the justices said were issued without adequate explanation.

Heinke said the decision was an important one, “not for what it says about whether service advisers at automobile dealerships are exempt from overtime under the Fair Labor Standards Act, but for what it says about when courts should defer to administrative agencies’ interpretation of statutes.” He noted that while courts ordinarily “defer to agency interpretations of a statute, if the statute is ambiguous and the agency interpretation is reasonable”—what is known as Chevron deference, this method “is not appropriate where the agency’s new interpretation is procedurally defective.”

Continuing with his analysis of the ruling, Heinke said, “While an agency may change its interpretation, it must provide good reasons for doing so.” In the Encino case, “no adequate explanation was provided, so the court rejected the agency’s new interpretation. This decision significantly narrows the situations in which a court must defer to an agency’s change in its interpretation of a statute.” (This quote was also published in Westlaw Journal Employment.)

As for when an agency is likely to change its interpretations of a statute, Heinke told Society for Human Resource Management that it “frequently occurs when there is a change in administrations.”