Fair Labor Standards Act—Overtime Pay for “Service Advisors” at Car Dealerships

Encino Motorcars, LLC v. Navarro, No. 15-415

The Fair Labor Standards Act (“FLSA”) requires overtime pay for certain employees when they work more than 40 hours per week. It exempts from this rule “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles.” 29 U.S.C. § 213(b)(1)(A). The plaintiffs, a group of “service advisors” at a car dealership whose primary job responsibilities involve identifying service needs and selling service solutions to the dealership’s customers, sued the dealership under FLSA for withheld overtime pay. The district court dismissed the suit, concluding that a service advisor is a “salesman . . . engaged in selling or servicing automobiles” under the FLSA exception. The Ninth Circuit reversed, deferring to a Department of Labor interpretative regulation stating that service advisors are not exempt because they do not personally service automobiles—a ruling that conflicted with the rules of the Fourth and Fifth Circuits. The Supreme Court granted certiorari to decide whether service advisors at car dealerships are exempt from FLSA’s overtime-pay requirements.