By Chance Hill
Today, the U.S. Supreme Court held that auto service advisers are not covered by the overtime pay requirement of the Fair Labor Standards Act (FLSA). In a 5-4 decision, the high court reversed a Ninth Circuit decision in which the lower court held that the service advisers—employees at car dealerships who advise customers about repair work—could pursue an overtime collective action against their employer Encino Motorcars LLC because they are eligible for overtime pay. The case began in 2012 when service advisers sued Encino for allegedly violating the FLSA by paying them only commissions even if they worked longer than the standard 40-hour workweek.
The Supreme Court, however, found that these employees fall under a FLSA exemption that excludes “any salesman, partsman or mechanic primarily engaged in selling or servicing automobiles” from overtime pay. Importantly, the majority specifically rejected the Ninth Circuit’s position that FLSA exemptions should be construed narrowly. Instead, the Court concluded that FLSA exemptions should not be given “anything other than a fair (rather than a ‘narrow’) interpretation.” This is welcome news to employers as they try to navigate the oft-times confusing patchwork of FLSA exemptions.