Call Our Free Helpline Now 888-500-8469

California Legal News

Supreme Court to Resolve Circuit Split on Automobile Dealer Overtime Exemption

Posted by Eric Kingsley | Oct 13, 2017 | 0 Comments

Automobile service advisor overtime exemption


On September 28, 2017, the U.S. Supreme Court again granted certiorari to resolve a circuit split regarding whether “service advisors” at automobile dealerships are exempt from receiving overtime under an exemption for “salesmen, partsmen, and mechanics” under the Fair Labor Standards Act (FLSA). The case is Encino Motorcars, LLC v. Navarro, No. 16-1362 (U.S. Sep. 28, 2017).

Historically, “service advisors” were included in the “salesperson” exemption. Beginning in 1973 with a federal appellate decision in Brennan v. Deel Motors, Inc., and continuing as recently as 2013 with the Montana Supreme Court's decision in Thompson v. J.C. Billion, Inc., courts have uniformly held that Service Advisors are exempt from overtime under Section 13(b)(10) of FLSA.

Over the years, car dealerships have faced uncertainty since the U.S. Department of Labor's (USDOL) track record in this area has been inconsistent. At times, the Department of Labor has said that service advisors could qualify for the exemption; at other times, it has said that they could not. At one point, the USDOL issued an interpretive provision where it took the position that service advisors did not fall within the exemption; however, several courts nevertheless applied the exemption and the USDOL said it would no longer dispute the issue.

The USDOL reversed course in April 2011 by deleting the controlling regulation, stating that the change reflected its view that the exemption should be limited “to salesmen who sell vehicles and partsmen and mechanics who service vehicles,” and that service advisors did not fall within this description.

The 9th Circuit Court of Appeals deferred to USDOL's most recent interpretation of the exemption and became the first court to hold that service advisors are not exempt from overtime pursuant to the “salesperson” exemption.

Supreme Court Decision – June 2016

The Supreme Court heard and issued a ruling in this case in June 2016. The Court did not answer the question of whether service advisers are exempt from overtime. Instead, the Court held that the USDOL regulations that the Ninth Circuit Court of Appeals relied upon to hold that service advisors are not exempt were invalid. This decision by the Supreme Court is similar to decisions reached by the Fourth and Fifth Circuits. Rather than decide the matter, the Court remanded the case back to the Court of Appeals for reconsideration. On remand, the Court of Appeals reconsidered the issue without reference to the views of the Department of Labor. Looking solely at the language and intent of the statute, the Court of Appeals once again found that service advisors do not fall within the meaning of the terms “salesman, partsman, or mechanic” as used in the FLSA.


Once again, the Ninth Circuit's position on the exemption is at odds with rulings in the Fourth and Fifth Circuits. This time around, the Supreme Court is expected to resolve the underlying issue of whether the service advisors are entitled to overtime, providing needed certainty to employers. Until the Supreme Court definitively sorts this issue out, auto dealers who wish to classify their service writers or service advisors as exempt from overtime may wish to focus on the FLSA Section 7(i) exemption for employees of retail or service establishments who are paid primarily on a commission basis.

If you have questions about California wage and hour laws or Fair Labor Standards Act, don't hesitate to contact leading California employment lawyers from Kingsley & Kingsley to take advantage of a free initial consultation. To discuss your situation call us toll-free at (888) 500-8469 or click here to contact us regarding your case.

Kingsley & Kingsley

16133 Ventura Boulevard, Suite 1200
Encino, California 91436
Phone: 888-500-8469
Local: 818-990-8300 (Los Angeles Co.)

About the Author

Eric Kingsley

In practice since 1996, the firm's lawyer and co-founder, Eric B. Kingsley, has litigated complex cases and written numerous appeals in state and federal courts on behalf of the California law firm Kingsley & Kingsley, including More than 150 collective actions. Mr. Kingsley focuses his practice ...


There are no comments for this post. Be the first and Add your Comment below.

Leave a Comment

We Hold Employers Accountable - Get Help Now

At Kingsley & Kingsley, we understand that you need help with your employment case now. A legal professional at our Los Angeles law firm can speak with you for a free initial consultation to help you with your situation. We also take most cases on a contingency fee basis, which means that you do not pay any fees unless you win or recover compensation. Call 888-500-8469