Car Dealership "Service Advisors" Not Exempt From Overtime, 9th Circuit Rules
Author: Michael Cardman, XpertHR Legal Editor
April 3, 2015
An auto dealership's service advisors, who are responsible for evaluating vehicles and suggesting repairs to their owners, do not qualify for an exemption from the overtime requirements of the Fair Labor Standards Act (FLSA), the 9th Circuit Court of Appeals ruled in Navarro v. Encino Motorcars, LLC.
Among the more commonly applied exemptions like those for an executive or a professional, the FLSA also includes a narrow exemption for (in the gendered language of its day) a "salesman, partsman or mechanic primarily engaged in selling or servicing automobiles."
A regulation from the US Department of Labor limits this exemption strictly to salesmen who sell cars, full stop, and partsmen and mechanics who service cars (but not salesmen who service cars).
The dealership conceded that its service advisors did not fit within the parameters of this regulation. But, it argued that the court should not defer to the regulation because the statute was ambiguous and could be interpreted to cover salesmen who service cars.
The 9th Circuit rejected this argument. It said the statute also could be interpreted to define a salesman as an employee who sells cars; a partsman as an employee who requisitions, stocks, and dispenses parts; and a mechanic as an employee who performs mechanical work on cars. "Service advisors do none of those things; they sell services for cars. They do not sell cars; they do not stock parts; and they do not perform mechanical work on cars."
An attorney representing Encino Motorcars told XpertHR that the dealership will petition the 9th Circuit for an en banc hearing and, if that fails, appeal to the Supreme Court. "We plan to challenge it any way we can," said Karl R. Lindegren, a partner in the Irvine and Los Angeles offices of Fisher Phillips.
The Navarro ruling conflicts with rulings from the 4th and 5th Circuits, so the Supreme Court might agree to hear an appeal.