Auto service advisors are overtime-exempt under the Fair Labor Standards Act. The Supreme Court’s 5-4 decision in Encino Motorcars, LLC v. Navarro clarified the scope of a 2011 regulation issued by the Department of Labor that excluded service advisors from the definition of “salesman” under 29 U.S.C. §213(b)(10)(A).
Encino Motorcars involves current and former service advisors employed by Encino Motorcars, a Mercedes-Benz dealership in California. In 2012, the service advisors sued Encino for backpay, alleging that Encino violated the FLSA by failing to pay them overtime. The District Court dismissed the complaint, finding service advisors exempt under 29 U.S.C. §213(b)(10)(A). The Ninth Circuit reversed, deferring to the Department of Labor’s 2011 rule under Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). The Supreme Court vacated the decision and remanded the matter back to the Ninth Circuit with instruction to ignore the DOL regulation when reconsidering the service advisors’ status. On remand, the Ninth Circuit again found the exemption inapplicable to service advisors. Encino Motorcars appealed and the Supreme Court granted certiorari.
The FLSA exempts from overtime-pay “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trucks, or farm implements, if he is employed by a nonmanufacturing establishment primarily engaged in the business of selling such vehicles or implements to ultimate purchasers.” 29 U.S.C. §213(b)(10)(A). Using the Oxford English Dictionary, Justice Clarence Thomas found that service advisors are “obviously” salesmen under an ordinary meaning analysis.
Applying the same approach, Justice Thomas also established that service advisors are “primarily engaged in . . . servicing automobiles” as the word “servicing” is used in the statute. Because the service advisors meet with customers, suggest repairs, and sell new or replacement auto parts, they are an integral part of the servicing process. Justice Thomas highlighted “[i]f you ask the average customer who services his car, the primary, and perhaps only, person he is likely to identify is his service advisor.” Justice Thomas thus concluded that to be “‘primarily engaged in . . . servicing automobiles’ must include some individuals who do not physically repair automobiles themselves but who are integrally involved in the servicing process.”
The Court therefore found service advisors exempt from the overtime-pay requirement under the FLSA because service advisors are “salesm[e]n . . . primarily engaged in . . . servicing automobiles” under an ordinary reading of the statute. The Court’s decision to reject a narrow interpretation of FLSA exemptions by stating that exemptions should not be given anything other than a “fair reading” may persuade lower courts to favorably interpret and apply FLSA exemptions with a similar broad reading.
KMK Law articles and blog posts are intended to bring attention to developments in the law and are not intended as legal advice for any particular client or any particular situation. The laws/regulations and interpretations thereof are evolving and subject to change. Although we will attempt to update articles/blog posts for material changes, the article/post may not reflect changes in laws/regulations or guidance issued after the date the article/post was published. Please consult with counsel of your choice regarding any specific questions you may have.
ADVERTISING MATERIAL.
© 2024 Keating Muething & Klekamp PLL. All Rights Reserved
- Partner
For more than 20 years, Kasey Bond has been helping business clients protect and grow their organizations through the effective application of labor and employment laws. She brings extensive experience to bear for her clients ...
Topics/Tags
Select- Labor & Employment Law
- Labor Law
- Coronavirus
- Employment Law
- Wage & Hour
- Privacy
- National Labor Relations Board
- Department of Labor
- Reasonable Accommodation
- Workplace Accommodations
- NLRB
- FMLA
- Medical Marijuana
- Employment Litigation
- Employee Benefits and Executive Compensation
- Religion Discrimination
- Arbitration
- Workplace Violence
- Discrimination
- Pregnancy Discrimination
- Medical Cannabis Dispensaries
- IRS
- Whistleblower
- Litigation
- Disability Discrimination
- Employer Policies
- Social Media
- Americans with Disabilities Act
- United States Supreme Court
- Federal Trade Commission
- Retirement
- Race Discrimination
- OSHA
- Sexual Orientation Discrimination
- National Labor Relations Act
- Accommodation
- ERISA
- Employer Handbook
- EEOC
- ADAAA
- ACA
- Affordable Car Act
- Unions
- Title VII
- Employer Rules
- Sexual Harassment
- Technology
- Federal Arbitration Act
- NLRA
- Transgender Issues
- 401(k)
- Disability
- Employment Settlement Agreements
- Sixth Circuit
- Equal Employment Opportunity Commission
- Fair Labor Standards Act
- Paycheck Protection Program
- Securities Law
- Benefits
- Gender Identity Discrimination
- Posting Requirements
- Class Action Litigation
- Disability Law
- Preventive Care Benefits
- Health Savings Account
- E-Discovery
- Evidence
- SECURE Act
- US Department of Labor Employee Benefits Security Administration
- Environmental Law
- Family and Medical Leave Act
- Privacy Laws
- Overtime Pay
- Representative Election Regulations
- Department of Justice
- Healthcare Reform
- Older Workers' Benefit Protection Act (OWBPA)
- Telecommuting
- Affirmative Action
- Electronically Stored Information
- Equal Opportunity Clause
- Compensable Time
- Occupational Safety and Health Administration
- Security Screening
- Supreme Court
- E-Discovery Case Law
- Electronic Data Discovery
- ESI
- Attendance Policy
- Return to Work
- Seniority Rights
- Unemployment Insurance Integrity Act
- American Medical Association
- Classification
- Confidentiality
- Disability Leave
- Equal Pay
- Fair Minimum Wage
- Federal Minimum Wage
- Genetic Information Discrimination
- Media Policy
- Misclassification
- National Origin Discrimination
- Retaliation
- Social Media Content
- State Minimum Wage
- Wage Increase
- Employment Incentives
- HIRE Act
- Social Security Tax
- Taxation
- Antitrust
Recent Posts
- The Practical Employment Law Podcast: Immediate Termination
- The Practical Employment Law Podcast: Labor & Employment Law Update February 2024
- The Practical Employment Law Podcast: Telephone Game
- The Practical Employment Law Podcast: Labor & Employment Law Update January 2024
- The Practical Employment Law Podcast: Employment Law Issues to Watch in 2024
- Department of Labor Announces New Independent Contractor Rule to Go into Effect March 11, 2024
- The Practical Employment Law Podcast: The Employment Law Naughty & Nice List
- The Practical Employment Law Podcast: Reefer Madness
- The Practical Employment Law Podcast: The Office Romance Episode
- The Practical Employment Law Podcast: New Laws Protecting Pregnant and Nursing Workers