In a 5-4 decision, SCOTUS ruled in Encino Motorcars, LLC v. Navarro that the Fair Labor Standards Act (FLSA) exempts service advisors at car dealerships from the act’s overtime requirements. Typically, the FLSA requires employers to pay overtime to employees who work more than 40 hours a week. Some employees are exempt from the rule including “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trucks or farm implement.” But what about employees who consult with customers about servicing needs?
The District Court ruled that service advisors are exempt. However, the Ninth district ruled otherwise, sticking to its assertion that FLSA exemptions should be narrowly construed. While service advisors are considered “salespeople”, they aren’t engaged in “servicing automobiles, as they do not actually repair and maintain vehicles.” The Court rejected the Ninth Circuit dependence on statutory interpretation. This decision solidified that exemptions should be construed as plainly as its written, shedding light for all employers asserting the application of any FLSA exemption.