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Encino Motorcars v. Navarro (Decision April 2, 2018)

Service advisors at car dealerships won’t be getting overtime pay.

Service advisors are the people who greet you at the repair shop in a car dealership. They may sell you various services or parts relating to the repair of your auto as they interact with you throughout the servicing process.

Navarro and other service advisors argued to the Supreme Court that they are entitled to overtime pay for working more than 40 hours per week. They want to avoid qualifying as “exempt” under the Fair Labor Standards Act.

The overtime rule and “exempt” employees

The FLSA generally says that employees must get overtime pay if they work over 40 hours per week. Service advisors often work more than 40 hours, but Encino Motorcars, a Mercedes dealership, argues that service advisors are “exempt” from overtime pay.

The FLSA “exempts” certain positions from the overtime rule. For the jobs of a car dealership, the exempt jobs include: “any salesman, partsman or mechanic primarily engaged in selling or servicing automobiles.” If service advisors meet this definition, they cannot get overtime pay.

The ruling

The ruling in this case comes down to interpreting the provision above.

Under the majority’s view, a service advisor is a salesperson primarily engaged in servicing automobiles. It sounds clear enough. And it sounds like it would fit the definition. That view got 5 votes – the 5 conservative-leaning Justices.

But the dissent disagrees. The dissent says a service advisor is not primarily engaged in servicing automobiles at all. In fact, a service advisor is primarily engaged in sales. And the law does not talk about people who are “primarily engaged in the sales of servicing automobiles.”  It does talk about salespersons, but those salespersons must be primarily engaged in selling automobiles.

Play around with the phrase a bit to get your own sense of the rabbit-duck ambiguity, but it only takes 5 Justices to win. And Encino got 5 to agree that service advisors are included in the definition. Which means they are exempt. Which means they do not get overtime pay.

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Encino Motorcars v. Navarro (Decision April 2, 2018)

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About the Author

Mariam Morshedi

Mariam Morshedi

Mariam Morshedi is the Founder and Executive Director of Subscript Law. Before starting Subscript Law, she practiced civil rights law for AARP Foundation, where she litigated housing, consumer and disability rights issues.

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