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No Overtime for Car Dealership Service Advisors

By George Khoury, Esq. on April 03, 2018 | Last updated on March 21, 2019

After several years of appeals, the United States Supreme Court has weighed in, again, on the debate over whether car dealership service advisors are entitled to overtime under the Fair Labor Standards Act, in Encino Motorcars v. Navarro. The case ping-ponged from the district to appellate court, to SCOTUS, then back down and back up to SCOTUS again.

The case, filed back in 2012, sought back pay for car dealership service advisors. The basis of the case was a new 2011 Department of Labor interpretation of the FLSA which seemed to remove service advisors from the specific overtime exemption which covered "any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trucks, or farm implements."

Service Advisers Are Selling

The role of a service adviser generally includes meeting and greeting customers, discussing potential repairs and parts, and preparing the service/work orders. As a result of these duties, the High Court's majority seemed to find it incredulous that anyone could think service advisers did not fit squarely within the above definition as salesmen. This notion was buttressed by the fact that there was no dispute that a "partsman," who doesn't actually perform mechanic/service-type labor, fits squarely within the definition. The Court explained:

While service advisors do not spend most of their time physically repairing automobiles, neither do partsmen, who the parties agree are "primarily engaged in . . . servicing automobiles."

"Or" What?

Perhaps the most curious aspect of the High Court's ruling is its hang up on the Ninth Circuit's reading of the "or" in the text. The majority opinion engages in a rather lengthy discussion of the appellate court's misuse of the "distributive canon:"

The Ninth Circuit invoked the distributive canon-matching "salesman" with "selling" and "partsman [and] mechanic" with "[servicing]"-to conclude that the exemption simply does not apply to "salesm[e]n ... primarily engaged in ... servicing automobiles." But the word "or," which connects all of the exemption's nouns and gerunds, is "almost always disjunctive."

Notably, this was a 5-4 decision. Justice Ginsburg authored the dissent, joined by Justices Kagan, Sotomayor, and Breyer.

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