Supreme Court Asked to Decide Auto Service Adviser Issue

Supreme Court Asked to Decide Auto Service Adviser Issue

SAN FRANCISCO — Appealing a decision of the Ninth Circuit Court of Appeals, Encino Motorcars LLC petitioned the U.S. Supreme Court to hear its appeal of a Fair Labor Standards Act (FLSA) decision stating that service advisers at an auto dealership are entitled to overtime pay. In response, a group of service advisers have submitted a response urging the Supreme Court not to hear the case because the issue did not involve national concerns and that circuit courts of appeal did not disagree about the issue. Normally, the Supreme Court only agrees to hear cases where there are different decisions from the appellate courts or to resolve a crucial issue of nationwide concern.

Service Advisers Under FLSA

Encino Motorcars alleges that service advisers should be treated as salespeople because they are paid by commission based on the amount of vehicle servicing work they are able to convince customers to buy, not on the amount of time they spend on the showroom floor. The case arose out of a suit filed by service advisers for Encino against the dealership, alleging that their job descriptions required them to greet car owners while always attempting to sell additional services that went beyond the customer’s purpose for visiting. However, they did not sell cars or perform repairs. Therefore, they claimed that they should have been protected by FLSA’s wage protections because they did not fall under one of FLSA’s exemptions. The service advisors were, instead, paid on a commission basis only, did not receive an hourly wage or salary, and were not paid overtime. The Ninth Circuit agreed with the advisers and held that since their roles were not primarily focused on servicing or selling cars, they were not exempt from overtime pay.

FLSA Exemptions for Auto Dealerships

Under the Department of Labor’s (DOL) regulations, employees of auto dealerships who are salesmen, parts-men, or mechanics, are exempt from overtime. The DOL interprets these exemptions narrowly under FLSA. It defines salesmen as employees employed primarily for making sales or obtaining orders or contracts for sale. Parts-men are those employees engaged primarily in requisitioning, stocking, and dispensing parts. Mechanics, on the other hand, are those engaged primarily in doing mechanical work in servicing an automobile, truck or farm implement. In this case, the Ninth Circuit found that service advisers fit neither of those definitions to be covered by the exemption. They did not sell vehicles, buy, stock or deliver parts, or work on vehicles. Therefore, the court found that the service advisers are entitled to minimum wage and overtime.

Specific exemptions under FLSA should be supported by the Department of Labor’s FLSA regulations, and employers cannot classify employees as exempt to skirt their minimum wage and overtime obligations. You should call (855) 754-2795 or complete the Free Unpaid Overtime Case Review form on the top right of this page if you feel your employee wage rights have been violated because you were mistakenly classified as exempt. Our top-rated team of wage lawyers will evaluate your situation to determine your best course of action. We will also determine if it is in your best interest to file a lawsuit against your employer. There are strict time limitations for filing, so it is important that you call our experienced attorneys today.

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