The National Law Forum

According to a recent news article, the Korean FTC fined three game games for allegedly not making clear disclosures regarding the odds associated with certain loot boxes. Loot boxes are items that players can win or buy and that give the player a virtual item, but the players does not know which one until they “open” the box. According to the article, some of the games encouraged players to buy loot boxes to collect 16 puzzle pieces, which would award players with special in-game items once completed. This mechanic, known as Kompu Gacha,  was once popular in Japan until the Japanese FTC raised concerns there.

The Korean FTC expressed concerns over the way the odds of winning the items were advertised. In at least one of cases, the game company used the phrase “random provision.” The FTC interpreted the phrase as suggesting equal odds of receiving the different items. The issue of loot boxes has received a fair amount of attention lately. We recently prepared a post on  “Are Loot Boxes An Illegal Gambling Mechanic?” and an Updateto that post. As we also reported, Apple has required disclosure for loot box odds. Recently, Hawaii and Washington State proposed legislation relating to loot boxes.

There are at least three key issues with loot boxes. First, depending on how they are structured, some argue they are illegal gambling. We are not aware of any U.S. court reaching this conclusion. Various other countries are looking into that issue. Second, is the appropriate disclosures that must be made. Third, is that some argue loot boxes are harmful to kids for allegedly driving addictive behavior. There is much debate about these issues.

The ESRB recently helped step up the self-regulatory aspects of these issue. It recently announced that it will soon begin assigning a new “In-Game Purchases” label to physical (e.g., boxed) games. According to the ESRB press release: “The new In-Game Purchases label will be applied to games with in-game offers to purchase digital goods or premiums with real world currency, including but not limited to bonus levels, skins, surprise items (such as item packs, loot boxes, mystery awards), music, virtual coins and other forms of in-game currency, subscriptions, season passes and upgrades (e.g., to disable ads).”

The ESRB also launched ParentalTools.org to help educate parents on how kids spend money playing video games.

Game companies should continue to assess how they structure and advertise their loot box offerings and remain abreast of potential legislation that is being proposed.

In a case of first impression, the Second Circuit held on April 6, 2018 that liquidated damages may not be awarded for the same course of conduct under both the Fair Labor Standards Act and the New York Labor Law.

In its per curiam opinion in Rana v. Islam, No. 16‐3966‐cv, the Court of Appeals noted that “[w]hile the wording of the FLSA and NYLL liquidated damages provisions are not identical, there are no meaningful differences.”

Liquidated damages of to 100% of the unpaid wages are available under both statutes (FLSA § 216(b) and NYLL § 198(1-a)).  Both laws contain affirmative defenses that can reduce the amount of such damages.  Under § 260 of the FLSA, “if the employer shows to the satisfaction of the court that the act or omission giving rise to such action was in good faith and that [it] had reasonable grounds for believing that [its] act or omission was not a violation of the” FLSA, “the court may, in its sound discretion, award no liquidated damages or award any amount thereof not to exceed” the original unpaid wage amount.  Under § 198 of the NYLL, liquidated damages are not recoverable if “the employer proves a good faith basis to believe that its underpayment of wages was in compliance with the law.”

After examining both statutes and noting that “[d]ouble recovery is generally disfavored,” the Court of Appeals concluded that “if the New York State Legislature intended to provide multiple recoveries, it would have done so expressly,” and “[w]e therefore interpret the NYLL and FLSA as not allowing duplicative  liquidated damages for the same course of conduct.”  The Court left to another day whether a plaintiff entitled to liquidated damages under both statutes should receive the larger of such awards.

The decision resolves a split among district courts in the Second Circuit.

In March 2018, the Medicaid and CHIP Payment and Access Commission (MACPAC) made its 2018 report to Congress, which included the Commission’s evaluation of telehealth services provided through the Medicaid program. Chapter 2 of MACPAC’s report had a positive outlook on telehealth’s contribution toward better accessibility of health care services to underserved individuals as well as individuals with disabilities.

Unlike its larger counterpart, Medicare, federal policy has not placed many restrictions on state Medicaid programs in terms of adopting or designing telehealth coverage policies. For example, there is limited reimbursement coverage of telehealth services provided through the Medicare Fee-For-Service (FFS) program (e.g., geographical restrictions). However, there is little federal guidance or information regarding the implementation of telehealth services in state Medicaid programs or coverage for these services. As a result, state Medicaid coverage of telehealth services is highly variable across state lines, in terms of telehealth modalities, specialties and services, provider types, and even permissible site locations where telehealth services may be rendered. This high degree of variability stems, at least in part, from the unique federal-state partnership that provides the foundation for all state Medicaid programs.

Federal Medicaid Program Requirements. Although the federal requirements for coverage of telehealth services provided through the Medicaid program are few, in comparison to comparable requirements under the Medicare FFS program, some broad CMS guidelines do require Medicaid providers to practice within the scope of their state practice laws and to comply with all applicable state professional licensing laws and regulations. Additionally, any payments made by state Medicaid programs for telehealth services must satisfy the federal Medicaid program requirements for efficiency, economy, and quality of care. Furthermore, although Medicaid program requirements for comparability, state-wideness, and freedom of choice do not apply to telehealth services, states choosing to limit access to telehealth services (e.g., limited to particular providers or regions) must ensure access to and cover face-to-face visits in areas where such services are not available. Moreover, states are not required to submit a Medicaid state plan amendment to cover and pay for telehealth services as long as the program is in a state where telehealth parity laws are in effect, which are intended to ensure same coverage and payment of telehealth services as those provided in-person.

State-to-State Variations in Medicaid Coverage of Telehealth Services. A big focus of the MACPAC report was the impact that state-by-state variations may have on providing access to telehealth services through state Medicaid programs. As previously noted, because of the lack of any unified federal telehealth policy, state Medicaid program coverage of telehealth services is inconsistent. Some states, like West Virginia, mirror their Medicaid policies and regulations after the Medicare program, meaning that telehealth services are covered only if the originating site is in a rural location that either meets the definition of a non-metropolitan statistical area or a rural health professional shortage area, or originating site must be at hospitals, critical access hospitals, physician offices, federally qualified health centers, etc. In other words, in these states, Medicaid recipients would be required to travel to particular qualified locations for their telehealth service to be covered under Medicaid. Interestingly, MACPAC reported that some states that initially adopted these Medicare-like standards have changed their policies over time, as the state Medicaid programs have gained experience and understanding of the implications for access, cost, and quality. Other states are increasingly allowing homes, workplaces, and schools to serve as originating sites for telehealth services, while some states do not explicitly require patients to be at any specific sites in order to receive telehealth services. For example, while West Virginia’s Medicaid program specifies that originating sites must be a physician’s or other health care practitioner’s office, hospitals, rural health centers, skilled nursing facilities, etc., Medicaid recipients in Washington state may choose the location they would like to receive telehealth services, without these types of restrictions.

Similarly, the types of telehealth services that are covered vary greatly from state-to-state. For example, Idaho’s Medicaid program covers live video telehealth for mental health services, developmental disabilities services, primary care services, physical therapy services, occupational therapy services, and speech therapy services. In contrast, Arizona’s Medicaid program covers live video telehealth for a variety of specialty services including cardiology, dermatology, endocrinology, pediatric subspecialties, hematology-oncology, home health, infectious diseases, neurology, obstetrics and gynecology, oncology and radiation, ophthalmology, orthopedics, pain clinic, pathology, pediatrics, radiology, rheumatology, and surgery follow-up and consultation.

Across state Medicaid programs there also is wide variation regarding the types of health care practitioners who may provide telehealth services to Medicaid program recipients. Nineteen states (e.g., Connecticut, Florida, Hawaii, Iowa, Kansas, Louisiana, Maine, Massachusetts, Mississippi, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Tennessee, Utah, and Vermont) do not specify the type of providers that may provide health care services via telehealth and therefore are presumed to have the most inclusive provider policies. There also is variation with respect to professional licensure requirements for these providers, with some state policies allowing out-of-state practitioners to provide telehealth services as long as they are licensed in the state from which they are providing the service and are registered with the state’s Medicaid program (e.g., Arizona) while other state policies require practitioners to be licensed or certified to practice in the state unless only providing episodic consultation services (e.g., Arkansas).

States set their own payment levels for telehealth services provided to Medicaid recipients. Some payment rates for telehealth services may be lower than payment rates for the same services provided in-person. State Medicaid programs also vary in terms of payments for facility fees and transmission fees, which assist providers with covering associated telecommunications costs. Additionally, state Medicaid policies for telehealth services may differ between managed care and FFS plans. Some states do not require Medicaid managed care plans to provide services via telehealth at all. For example, Florida’s live video telehealth is covered under Medicaid FFS but is optional for Medicaid managed care plans, while in Massachusetts telehealth services are not covered under Medicaid FFS but there is some coverage under at least one of the state’s Medicaid managed care plans.

Despite these variations, MACPAC found that Medicaid plays a significant role as a payor with respect to the following types of telehealth services:

Behavioral Health. MACPAC reported that non-institutionalized adult, children, and adolescents covered by Medicaid have a higher rate of behavioral health disorders compared to their privately insured counterparts. Barriers to care include fragmented delivery systems, lack of accessibility to provider and resources, and patients’ concerns regarding confidentiality and fear of stigma attached to seeking mental treatment. MACPAC reported that there is increasing evidence that telehealth has the potential to improve access to evidence-based care for mental health and substance use disorders for individuals located in underserved areas. As of now, all state Medicaid programs that cover telehealth services include as part of that coverage access to behavioral health services via videoconferencing, although the scope of coverage varies state-to-state. Generally, most commonly covered services include mental health assessments, individual therapy, psychiatric diagnostic interview exams, and medication management. Although most state Medicaid programs will cover behavioral health services via telehealth if provided by licensed or certified psychiatrists, advanced practice nurses, and psychologists, some states also will cover those services if treatment is delivered by social workers and/or counselors. MACPAC reported that there is a growing number of studies showing that behavioral health care services provided via telehealth is effective, particularly for assessment and treatment of conditions such as depression, post-traumatic stress disorder, substance use disorder, and developmental disabilities. MACPAC reported high patient satisfaction with behavioral health care services via telehealth was on par with non-Medicaid payor populations, although MACPAC indicated that more research is needed.

Oral Health. Oral health services among Medicaid participants are relatively low. Barriers to oral health care include cost, difficulty of finding dentists who accept Medicaid, and inconvenience of location and time. MACPAC reported that the use of telehealth in dentistry has been recognized for its potential in improving access to primary and specialty oral health care services in communities that either lack or have limited provider capacity. Typically a patient is joined by an oral health professional at the originating site during a real-time video consultation with a dentists or specialty dentists for diagnosis and development of a treatment plan. Store-and-forward modality allows the provider at the originating site to send images (i.e., x-rays, photographs, lab results) to the dentist for review. As of 2017, 11 states were identified for including some Medicaid coverage for teledentistry (e.g., Arizona, California, Colorado, Florida, Hawaii, Minnesota, Missouri, Montana, New Mexico, New York, and Washington). Studies have shown that certain teledentistry services such as screening of childhood dental caries and orthodontic referrals appear to be as effective as in-person visits. MACPAC reported that patients expressed satisfaction of these dental health care services provided via telehealth because of greater convenience and improved access to care.

Maternity Care. In 2010, although state Medicaid programs covered nearly half of all births in the U.S., nearly 50 percent of U.S. counties had no obstetrician-gynecologists providing direct patient care. Telehealth can be used to manage pregnancies in several ways including the use of videoconferencing between a patient and her regular maternity care provider or between two providers during labor and delivery. Live videoconferencing could also be utilized during genetic counseling or even neonatal resuscitation. MACPAC reported that pilot studies have tried videoconferencing for prenatal care visits, group prenatal care, and breastfeeding support, which include women with both high-risk and low-risk pregnancies. MACPAC also reported that an emerging practice is the use of telehealth to diagnose congenital heart defects via live videoconferencing between the radiographer and fetal cardiologists, or the use of store-and-forward technology to allow a specialist to review echocardiograms post hoc.

MACPAC Recommendations. Before integrating or expanding telehealth services in their respective Medicaid programs, MACPAC recommended that states weigh the costs and the resource requirements associated with using or implementing telehealth against their goals of improving access for Medicaid recipients to needed health care services. One of the primary concerns voiced against greater use of telehealth services is the inappropriate use or overuse of those services. For example, MACPAC asked the states to consider whether inclusion of facility or transmission fees would increase the overall costs to their Medicaid programs if telehealth services replaced in-person services. MACPAC also asked states to consider whether telehealth services had the potential to increase fragmentation of care if services were provided by different telehealth providers or providers were unable to obtain updated patient medical records. MACPAC emphasized that while there appeared to be growing number of studies showing the effectiveness of telehealth services, there are still very few published studies addressing the effect of telehealth in Medicaid populations.

MACPAC also noted several factors that contributed to limited adoption of telehealth in Medicaid. The combination of lower payment rates for Medicaid and yet potential high costs for licensing across different state lines may deter providers from using telehealth for Medicaid services. Telehealth technology is dependent on reliable and affordable broadband connectivity. Unfortunately many rural areas and Native American reservations still lack such connectivity. An estimated 53 percent of individuals living in rural areas lack access to broadband speeds needed to support telehealth. Furthermore, costs of broadband can be almost three times that in urban areas. Costs associated with the acquisition, installation, and maintenance can be quite cost-prohibitive to providers and affect their ability or willingness to adopt telehealth. Additionally, telehealth-focused remote prescribing laws vary from state-to-state while prescribing of controlled substances are limited by the Ryan Haight Online Pharmacy Consumer Protection Act of 2008. The law generally prohibits prescribing of controlled substances through the internet without a valid prescription, which requires the prescriber to have conducted at least one in-person medical examination of the patient. Although the law includes a telehealth exemption, the exemption requires the originating site to be located at Drug Enforcement Administration (DEA)-registered clinic or hospital. In addition, state medical licensing boards may also limit the circumstances in which providers can prescribe controlled substances via telehealth. As illustrated above, the varying length and degree of Federal and state laws and regulations governing telehealth services is complex and may deter providers from entering into the telehealth service market.

Overall, the MACPAC report illustrates a positive outlook on telehealth’s integration into state Medicaid programs. However, in its recommendation to Congress, MACPAC did not outright push states to adopt telehealth into their Medicaid programs. Rather, the Commission continues to seek more research and collaborative studies among states to gain better insight and understanding of the effects of telehealth on access to care, quality, and cost of care of the Medicaid program.

West Virginia Code § 23-4-10 provides that when a personal injury suffered by an employee in the course of and resulting from his or her employment causes death, and the disability is continuous from the date of injury until the date of death, the decedent’s dependents may receive benefits. The West Virginia Supreme Court of Appeals recently affirmed an award of these death benefits, even though the claimant’s disability was not obviously continuous from the time of his work-related injury as he was not in active treatment for any disability at the time of his death.

In the prior related case before the West Virginia Supreme Court of Appeals, the Court found that a dependent’s application for death benefits was timely filed even though it was filed more than six months after the decedent’s death, based on the specific finding that:

Where a claimant to dependent’s death benefits under the Workers’ Compensation Act delays filing a claim because the claimant was unaware, and could not have learned through reasonable diligence, that the decedent’s cause of death was work-related, and the delay was due to the medical examiner completing and making available an autopsy report, the six-month time limitation on filing a claim in W. Va. Code § 23-4-15(a)[2010] is tolled until the claimant, through reasonable diligence, could have learned of the autopsy report finding that the decedent’s cause of death was, in any material degree, contributed to by an injury or disease that arose in the course of and resulting from the decedent’s employment.

The Supreme Court limited its holding to death benefits under the Workers’ Compensation Act where the delay was on the part of the medical examiner and not the claimant. It also explained that this holding does not apply to claimants who delay having an autopsy performed and that the claimant’s failure to timely file a claim within the six months of when he or she could have learned that the employee’s death arose in the course of and resulting from employment will not be excused.

Based upon this decision, the claim was remanded back to the claims administrator for a decision on the merits of the application for dependent’s benefits. In this case, a twenty-four (24) year old coal miner died in his sleep from a seizure on December 7, 2010. At the time, he left behind his mother, who was the petitioner in the Supreme Court case, and his six (6) year old daughter, on whose behalf the mother petitioned the Court.  Prior to his death on December 7, 2010, the decedent suffered a work-related injury on March 24, 2009, when a wrench hit him on the head.  He lost consciousness for one (1) minute, and the injury resulted in a golf ball sized knot on his head.  He was transported to the local hospital but was essentially released with pain medication and told to return for a follow up visit, if necessary.  The claimant did not seek any additional medical treatment for this injury, and his claim was closed for temporary total disability benefits because he was not off work for more than three days.  Twenty-one (21) months after this injury, the decedent died in his sleep.  The medical examiner performed an autopsy on December 8, 2010, the next day.  For reasons that were not developed in the evidence, the autopsy report was not completed and made available to the decedent’s family until August 24, 2011, more than eight (8) months after his death.  The autopsy report declared that the claimant died as a result of a traumatic seizure disorder that resulted from the 2009 work injury.  The autopsy report did not establish when the decedent began to suffer from the seizure disorder, and his death certificate was amended to show that the claimant’s cause of death was a consequence of the traumatic seizure disorder.

Based upon these facts, the claims administrator denied the application for benefits because there was not sufficient credible evidence linking the cause of death to the work incident. The decedent in this claim sustained a head injury working on a roof bolt machine on March 24, 2009.  He was knocked unconscious, complained of a bad headache, and a bump the size of a golf ball on his head.  The decedent was transported by ambulance to the emergency room at Welch Community Hospital where he was diagnosed with a contusion to the head and a concussion with loss of consciousness.  A CT of his head was normal.  He was prescribed medication and told to return to the walk-in clinic for a follow-up, if necessary. Over a year later, on December 7, 2010, the claimant died at his home in his sleep.

As indicated above, the death certificate listed the cause of death as seizure, and it also stated that the claimant was struck in the head while working as a professional coal miner. An anatomic and forensic pathologist prepared an additional report on behalf of the dependent claimant and opined that the decedent died as a result of the accident and injuries sustained while at work on March 24, 2009.  A board certified neuropathologist, forensic pathologist, and  anatomic pathologist also examined the claim on behalf of the employer and indicated her opinion that the records showed that there was an ischemic stroke in the occipital lobe region secondary to hypertension.  She opined that the most probable cause of death was cardiac and cerebral hypertensive vascular disease.  She also opined that the claimant had an arrhythmia, which caused a hypoxic/ischemic event that resulted in brain swelling.

The Office of Judges weighed this testimony and relied on the opinions of the physician who completed the autopsy and the claimant’s expert. The Office of Judges determined that a preponderance of the evidence established that the decedent died as a result of a seizure in the setting of traumatic seizure disorder following a remote head injury at work from March 24, 2009. It reversed the claims administrator’s decision and held the claim compensable for dependent’s benefits.  The Board of Review adopted those findings of fact and conclusions of law and affirmed that decision.

Upon review by the Supreme Court, all five justices found that the decision of the Board of Review in affirming the Office of Judges is not in clear violation of any constitutional or statutory provisions, nor is it clearly the result of erroneous conclusions of law, nor is it based upon material misstatement or mischaracterization of the evidentiary record. Accordingly, the Supreme Court upheld the finding that the award of dependent’s benefits was appropriate, even though the claimant passed away over a year after his head injury, which did not result in any additional treatment between the time of injury until the time of death.  No medical evidence was submitted to show that the decedent suffered a continuous disability, with the exception of the experts’ opinion that the death was related to traumatic seizure syndrome that resulted from the initial head injury.

Even though the applicable code section provides that the disability arising from the personal compensable injury must be continuous from the date of injury until the date of death, this case certainly makes such a requirement easier to prove for dependents. The decedent did not have any obvious disability after the initial treatment in the claim, but the disability was found to be continuous based on autopsy findings.

After years of litigation, including two trips to the U.S. Supreme Court, on whether service advisors who work in an automobile dealership are exempt from overtime under the Fair Labor Standards Act (FLSA), the Court finally has held, in a 5-4 decision, that service advisors are exempt from overtime under the “automobile dealer” exemption applicable to salesmen, partsmen, and mechanics. Encino Motorcars, LLC v. Navarro, 2018 U.S. LEXIS 2065 (Apr. 2, 2018). But the case has implications far beyond the industry-specific exemption.

The Court has finally put to rest the “narrow construction” principle, long a thorn in the side of employers litigating FLSA exemption cases. Under this oft-stated principle, exemptions were “narrowly construed” against the employer due to the FLSA’s status as a “remedial” statute. This canon put a thumb on the scale in favor of employees in exemption cases and is cited routinely in cases involving application of an FLSA exemption. The Supreme Court now squarely rejects this principle, lifting the thumb off the scale and noting that exemptions are just as much a part of the FLSA as is the overtime requirement.

A Brief History of the Automobile Dealer Exemption

First enacted in 1966, FLSA section 213(b)(10)(A), commonly known as the “automobile dealer” exemption, excepts from overtime “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles.” Shortly after the exemption’s enactment, the Department of Labor (DOL) issued a regulation providing that service advisers were not covered by the exemption and therefore were eligible for overtime. Following contrary holdings by the U.S. Court of Appeals for the Fifth Circuit and a number of district courts, the DOL in 1978 abandoned that position in an opinion letter and stated service advisors are covered by the exemption. This remained the position of both the DOL and the courts for more than three decades.

However, in 2011, the Obama-era DOL reversed course, issuing a final rule stating that service advisors are not covered by the exemption. Notwithstanding that the final rule provided no clear basis for the DOL’s reversal, when first faced with the issue in 2015, the U.S. Court of Appeals for the Ninth Circuit deferred to the final rule and held that service advisors were not exempt.

In 2016, the Supreme Court reversed the Ninth Circuit’s decision, concluding that the Ninth Circuit erred in deferring to the DOL regulation because the Department had not provided a sufficient basis for its sudden reversal of position. However, rather than deciding the service advisor exemption issue on its merits, the High Court remanded the case to the Court of Appeals to reconsider the issue absent reference to the now-voided regulation. (With only eight members at the time following the death of Justice Antonin Scalia, the Court likely was split 4-4 on the merits, as evidence by this week’s decision.) On remand, the Ninth Circuit again concluded that service advisors were not exempt, this time based on an examination of the statutory text and legislative history of the exemption.

“Disjunctive” vs. “Distributive”: A Supreme Parsing of the Automobile Dealer Exemption

As demonstrated by the divergent views taken by the Court’s majority and dissenting opinions, the wording of the automobile dealer exemption can be construed in different ways. When interpreting “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles,” how, if at all, do the three types of jobs match up with the two listed primary tasks?

In reversing the Ninth Circuit for the second time, the Supreme Court, in an opinion authored by Justice Clarence Thomas and joined by Chief Justice John Roberts and Justices Anthony Kennedy, Samuel Alito, and Neil Gorsuch, closely examined the text of the statute and concluded that the most reasonable reading of the exemption is in the “disjunctive,” that is, that the phrase “salesman, partsman, or mechanic” could be combined in any way with the phrase “selling or servicing automobiles,” such that a “salesman” who is primarily engaged in “servicing” automobiles falls within the exemption’s definition. Finding that service advisors “obviously” are a form of salesmen of services, and sometime parts, related to the maintenance and repair of automobiles, the majority concluded that they fall well within the language of the exemption.

In so holding, the Court rejected the Ninth Circuit’s (and the dissent’s) “distributive” interpretation, which would instead pair each of the jobs in the first phrase with one of the activities in the second phrase, i.e., “salesman” with “selling” and “partsman[] or mechanic” with “servicing.” “The exemption uses the word ‘or’ to connect all of its nouns and gerunds, and ‘or’ is ‘almost always disjunctive’” in such circumstances, noted the Court. Moreover, the Court added, given there are three nouns in the first phrase (“salesman, partsman, or mechanic”), but only two gerunds in the second (“selling or servicing”), along with the fact that the word “or” occurs three times in the sentence (when including the final words of the second phrase, “trucks[] or farm implements”), it would require a more strained interpretation to combine the phrases in the manner put forth by the Court of Appeals and the dissent.

The Court further rejected the “inconclusive” legislative history of the exemption, as well as the DOL’s 1966-67 Occupational Outlook Handbook’s list and definition of common automobile dealer jobs, as overcoming what it perceived to be a straightforward interpretation of the exemption’s language. In short, the Court held, service advisors are “salesman … primarily engaged in … servicing automobiles” and, therefore, the exemption applies.

Rejection of “Narrow Construction” Principle

The undeniably more important language of the Court’s opinion focused on the so-called narrow construction principle, that is, the canon that FLSA exemptions should be narrowly construed against the employer and applied only when they do so plainly and unmistakably.

In numerous rulings over the years, the Ninth Circuit and other courts have relied on this canon — and did so again when Navarro was remanded to the Court of Appeals in 2016. In a short, single paragraph, the Supreme Court unequivocally stated:

We reject this principle as a useful guidepost for interpreting the FLSA. Because the FLSA gives no textual indication that its exemptions should be construed narrowly, there is no reason to give them anything other than a fair (rather than a “narrow”) interpretation. The narrow-construction principle relies on the flawed premise that the FLSA pursues its remedial purpose at all costs. But the FLSA has over two dozen exemptions in § 213(b) alone, including the one at issue here. Those exemptions are as much a part of the FLSA’s purpose as the overtime-pay requirement. We thus have no license to give the exemption anything but a fair reading.

(Internal citations omitted.)

With that, the narrow-construction principle was eviscerated and the myriad of decisions on which it was premised were called into question. As noted in the dissenting opinion by Justice Ruth Bader Ginsburg, “in a single paragraph, the Court reject[s] this longstanding principle as applied to the FLSA without even acknowledging that it unsettles more than a half century of our precedent.” (Justices Stephen Breyer, Sonia Sotomayor, and Elena Kagan joined in the dissent.) The impact of this brief-yet-resounding rejection of the narrow construction principle likely will be significant.