WASHINGTON D.C. — A group of auto service advisers have asked the U.S. Supreme Court to uphold the U.S. Court of Appeals for the Ninth Circuit’s decision in an overtime case they brought against their employer, Encino Motorcars LLC. The Court of Appeals ruled against Encino Motorcars and held that the service advisers were entitled to overtime pay under the Fair Labor Standards Act (FLSA). Encino then filed a petition for the U.S. Supreme Court to overturn that decision in order to restore uniformity in the enforcement of labor laws.
Department of Labor’s Position on Coverage of Auto Service Advisers
The suit was originally brought by the service advisers for overtime pay, arguing that they are not exempt from overtime simply because they greet and liaise with customers, evaluate their service needs, and attempt to sell additional repair and maintenance services. They neither sell nor service any of the cars in the dealership; therefore, they argue that they are entitled to overtime.
Under FLSA, sales and parts employees or mechanics primarily engaged in selling or servicing automobiles are exempt from overtime if they are employed by a nonmanufacturing establishment primarily engaged in the business of selling such vehicles or implements to a purchaser. Since 1987, DOL has applied this exemption for service advisers, but several federal courts had concluded that DOL misread the FLSA regulations in considering service advisers as exempt since they are functionally similar to the mechanics and parts employees who service the automobiles. Nevertheless, in 2011, DOL reversed its longstanding position and issued guidance stating that service advisers should be treated as overtime eligible and nonexempt.
The district court in this case initially dismissed the case, concluding that the plaintiffs were exempt. However, the Ninth Circuit Court of Appeals reversed that decision, deferring to the DOL’s interpretation of FLSA.
Supreme Court May Take Case Due to Circuit Split
The Ninth Circuit’s decision conflicts with the Fourth and Fifth Circuit Courts of Appeal. That decision upsets a once-settled body of law and the Supreme Court’s intervention is necessary to restore uniformity. The National Automobile Dealers Association and dealership associations in nine states submitted briefs in support of Encino, stating that the Ninth Circuit’s decision punctured a wall of judicial authority pertaining to pay for service advisers.
Until the Supreme Court agrees to intervene and decides the issue nationwide, different jurisdictions will have different interpretations of whether FLSA exempts auto service advisers. If you believe that you have been deprived of overtime because of a misapplied exemption, you should call (855) 754-2795 or complete the Free Unpaid Overtime Case Review form on the top right of this page. Our wage lawyers will evaluate your situation and help you obtain the compensation that you are entitled to. Call our experienced attorneys today.