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Legal Updates & Alerts

Supreme Court to Again Evaluate Whether Auto Service Advisors Are Exempt from Overtime

October 2, 2017
By Haley Morrison
 
On September 28, 2017, the United States Supreme Court agreed to revisit the question of whether service advisors at car dealerships are exempt from overtime.
 
The federal FLSA exempts from overtime "any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trucks, or farm implements" at a covered dealership. See 29 USC § 213(b)(10)(a) (emphasis added). The Oregon statute is virtually identical. See ORS 839-020-0125(3)(g).
 
In the 1970s, the Department of Labor ("DOL") issued an opinion letter stating that service advisors are included in the exemption. As a result, the vast majority of car dealerships have, for decades, classified service advisors as exempt. In 2011, the DOL revised its position, concluding that service advisors are non-exempt employees.
 
As we previously summarized here, in the case Navarro v. Encino Motorcars, LLC, the Ninth Circuit, consistent with the DOL's 2011 regulation, held that service advisors are not exempt from overtime. That conclusion was a significant departure from prior decisions of other courts around the country.
 
Last year, the Ninth Circuit's Navarro decision was appealed to the United States Supreme Court, which concluded that the FLSA statute must be construed without giving controlling weight to the DOL's 2011 regulation. The Court remanded the matter back to the Ninth Circuit for reconsideration.
 
In January 2017, on remand, the Ninth Circuit confirmed its earlier conclusion that service advisors are not included in the FLSA exemption.
 
The defendant company, Encino Motorcars, renewed its petition to the United States Supreme Court to decide the issue. Late last week, the high Court again granted certiorari.
 
We will keep you updated as the Court hears argument and issues its decision. For now, the Ninth Circuit's holding - that service advisors are not exempted from overtime - remains the law in Oregon, Washington, California, and other states within the Circuit.