Service Advisors Are Exempt From Fair Labor Standards Act Overtime-Pay Requirement

The Fair Labor Standards Act exempted “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles” from overtime-pay requirements under the Act. In Encino Motorcars, LLC v. Navarro, a group of service advisors sued for overtime pay under the Act when the Department of Labor decided in 2011 that they were excluded from the exemption. The Court had previously ruled that the Department’s rule was not entitled to deference, but the Ninth Circuit held that the Act’s exemption did not apply to service advisors anyway. The Court, in a close 5-4 decision by Justice Thomas, reversed, holding that service advisors are “salesm[e]n . . . primarily engaged in . . . servicing automobiles” under the plain text of the Act. While a service advisor does not do the actual maintenance on a customer’s vehicle, the Court found that s/he is indeed a salesperson who facilitates that maintenance. Justice Ginsburg, joined by Justices Breyer, Sotomayor, and Kagan, dissented, arguing that the exemptions should be read more narrowly.