Automobile Service Advisors Do Not Fall Within an FLSA Exemption

Plaintiffs are services advisors at Mercedes-Benz dealers. They filed a class-action for unpaid overtime. The district court held they fell within the FLSA exemption applicable to ?any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles.? The Ninth Circuit reversed based on deference to a 2011 DOL regulation. Navarro v. Encino Motorcars, LLC, 780 F.3d 1267 (9th Cir. 2015). The Supreme Court granted certiorari and held that deference to the regulation was improper. Encino Motorcars LLC v. Navarro, 136 S. Ct. 2117 (2016). The Court ordered the circuit on remand to construe the statute in the first instance.

On remand the court held that Congress did not intend to exempt service advisors. Congress was aware of the separate job category of ?automobile service advisors? and did not include them in the exemption. The court held that a service advisor was not a ?salesman? within the exemption because they are not primarily engaged in ?servicing automobiles.? Concerned about further Supreme Court scrutiny, because its decision conflicts with the Fourth and Fifth Circuits, the panel also looked to legislative history in support of its reasoning.

Navarro v. Encino Motorcars, LLC, 843 F.3d 925 (9th Cir. 1/9/17) (Graber, Wardlaw, Mahan (D. Nev.)).