The United States Supreme Court ruled on April 2 that automobile service advisors are exempt from overtime pay. The Court’s decision addressed an interpretation of a statute under the Fair Labor Standards Act (“FLSA”). In doing so, the Court rejected a 2011 Department of Labor (“DOL”) rule concluding that auto service advisors were not exempt. The Court’s decision reversed the Department’s long standing position on the issue.
History of Court RulingsBasing its ruling in part on the DOL 2011 rule and its analysis of the FLSA statute that exempts “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles” from overtime, the Ninth Circuit Court of Appeals had ruled in 2015 in Encino Motorcars, LLC v. Navarro, 780 F. 3d 1267 (9th Cir. 2015), that auto service advisors were not exempt. Ultimately, Encino Motorcars appealed decisions by the Ninth Circuit twice to the Supreme Court.
The first time around the Supreme Court concluded that the Ninth Circuit should not have given deference to the 2011 Department of Labor rule and sent the case back to the Ninth Circuit to be decided again in the absence of such deference. Encino Motorcars, LLC v Navarro, 579 U.S. ___, 136 S. Ct. 2117 (2016). However, when the case was remanded to the Ninth Circuit, it issued a second opinion concluding again that service advisors were not exempt. Encino Motorcars, LLC v Navarro, 845 F. 3d 925 (9th...
