High Court Expands Overtime Exemption in Car-Dealership Case

WASHINGTON (CN) – Just like car salesmen and mechanics, a class of dealership employees known as service advisers are exempt from federal overtime rules, the sharply divided Supreme Court ruled Monday.

Led by Hector Navarro, a group of current and former service advisors who worked at the Mercedes-Benz dealership Encino Motorcars in California brought the complaint at issue in 2012.

Twice a federal judge dismissed the suit, and twice the Ninth Circuit reversed.

In its second dance itself with the case, the Supreme Court reversed as well on Monday.

Navarro and the challengers had hinged their case on ambiguity, noting that their position is not explicitly mentioned in the exemption of the Fair Labor Standards Act. Specifically this law covers “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trucks, or farm implements.”

But Justice Clarence Thomas wrote for the 5-4 court this morning that “a service advisor is obviously a ‘salesman.’”

“The ordinary meaning of ‘salesman’ is someone who sells goods or services,” the 11-page decision states. “Service advisors do precisely that. As this court previously explained, service advisors ‘sell [customers] services for their vehicles.’”

Though the advisers are not physically repairing the cars themselves, the majority calls it undisputed that partsmen likewise “do not spend most of their time under the hood.”

Kirkland Ellis attorney Paul Clement, who argued before the Supreme Court on behalf of the auto dealership, has not returned an email seeking comment. The service advisors were represented by attorneys at the University of Pennsylvania Law School. They also have not returned an email seeking comment.

Thomas also noted that he was not persuaded on the two extraneous sources relied upon by the Ninth Circuit to fashion its decision: the Department of Labor’s 1966–67 Occupational Outlook Handbook and the FLSA’s legislative history.

Of the latter, Thomas said that “silence in the legislative history, ‘no matter how “clanging,”’ cannot defeat the better reading of the text and statutory context.”

“If the text is clear, it needs no repetition in the legislative history; and if the text is ambiguous, silence in the legislative history cannot lend any clarity,” the opinion continues. “Even if Congress did not foresee all of the applications of the statute, that is no reason not to give the statutory text a fair reading.”

Richard Reice, an attorney with the firm Hoguet Newman who has been following the case, noted in a statement that the narrow reading of Labor Department regulations would be well-received by employers.

Justices Stephen Breyer, Sonia Sotomayor and Elena Kagan were led in the dissent Monday by Justice Ruth Bader Ginsburg.

“Service advisors, such as respondents, neither sell automobiles nor service (i.e., repair or maintain) vehicles,” Ginsburg wrote. “Rather, they ‘meet and greet [car] owners’; ‘solicit and sugges[t]’ repair services ‘to remedy the [owner’s] complaints’; ‘solicit and suggest … supplemental [vehicle] service[s]’; and provide owners with cost estimates. Because service advisors neither sell nor repair automobiles, they should remain outside the exemption and within the act’s coverage.”

Ginsburg also recounted several reasons why the exemption of partsmen should not likewise cover service advisers.

“Unlike service advisors, partsmen ‘get their hands dirty’ by ‘working as a mechanic’s right-hand man or woman,’” Ginsburg wrote, quoting her own concurring opinion in the court’s last dealing with the case.

Ginsburg also focused on how many hours various dealership employees clock.

“Unlike salesmen, partsmen, and mechanics, service advisors ‘wor[k] ordinary, fixed schedules on-site,’” the opinion states. “Respondents, for instance, work regular 11-hour shifts, at all times of the year, for a weekly minimum of 55 hours. Service advisors thus do not implicate the concerns underlying the §213(b)(10)(A) exemption. Indeed, they are precisely the type of workers Congress intended the FLSA to shield ‘from the evil of overwork.’”

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