Keyes Motors, Inc. v. Division of Labor Standards Enforcement

Keyes Motors sells and services automobiles. The Division of Labor Standards Enforcement of the Department of Industrial Relations (DLSE) administers and enforces Industrial Welfare Commission (IWC) orders. IWC Order 7-80 regulates wages in the mercantile industry. It exempts “commission” employees from the overtime compensation requirements of state labor laws. In 1982 DLSE determined Keyes’s mechan ics were not “commission” employees and ordered Keyes to pay those mechanics $6,000 in overtime wages pursuant to IWC Order 7-80. Keyes successfully sought declaratory relief to the effect its mechanics are commission employees. We conclude DLSE’s interpretation was reasonable, and should have been accorded great weight by the trial court. Accordingly, we reverse.

Facts and Proceedings Below

Upon auditing Keyes’s books for the period January 1, 1981, through June 30, 1982, DLSE determined Keyes owed its mechanics $6,000 in overtime wages. DLSE compelled payment of the unpaid overtime and ordered Keyes to abide by the overtime provisions of IWC Order 7-80 in the future.

Keyes instituted proceedings against DLSE seeking a judicial declaration that the mechanics’ “flat rate”…