NewsUncategorized9th Circuit Decision Clarifies FLSA Applicability To Service Advisors at Car Dealerships

 
The Supreme Court recently issued its ruling in the case Encino Motorcars LLC v. Navarro.  At issue in this case was whether service advisors at car dealerships are exempt from the Fair Labor Standards Act’s overtime pay requirements.  In general, the FLSA contains an exemption from its overtime-pay requirements for “any salesman, partsman, or mechanic” who is “primarily engaged in selling or servicing automobiles.”  29 U.S.C. § 213(b)(10)(A).
The Supreme Court reviewed the United States Court of Appeals for the Ninth Circuit decision [comprised of Alaska, Arizona, California and Hawaii] holding that service advisors at car dealerships are not exempt employees.  These service advisors consisted of car dealership employees who meet with customers, identify their service needs, and sell them services for their vehicles.
The Supreme Court reversed this decision, and found that service advisors were in fact exempt from FLSA overtime requirements in a favorable decision for employers.  The Supreme Court conducted a straight-forward analysis and reasoned that the service advisors at issue were exempt because they qualify as “salesmen… primarily engaged in servicing automobiles.”
In issuing a ruling that is favorable to employers, the Supreme Court provided useful language to all employers based on its view of how FLSA overtime exemptions should be construed.  The court rejected the common view that FLSA exemptions should be construed narrowly because the FLSA is a remedial statute, as the Court found that there is nothing within the text of the FLSA to indicate that exemptions should be construed narrowly: “the exemptions are as much a part of the FLSA’s purpose as the overtime-pay requirement.”
The attorneys of Tristan & Cervantes are available to assist in addressing employment law matters and recent developments within the law.  Please feel free to contact us at info@tristanlegal.com or 312.345.9200.