SCOTUS: FLSA exemption for auto service advisors

Splitting 5-4, the US Supreme Court held that automobile service advisors are exempt from the Fair Labor Standards Act, and thus are not entitled to overtime payments. Encino Motorcars v. Navarro (US Supreme Court 04/02/2018) [PDF].

Perhaps the most important takeaway from this decision is the point that the Court rejects the principle that that FLSA exemptions should be construed narrowly. Instead, the exemptions should be given their "fair meaning."

The FLSA exempts from the overtime pay requirement "any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles" at a covered dealership.

The case was at the US Supreme Court in 2016 - Encino Motorcars, LLC v. Navarro (US Supreme Court 06/20/2016) [PDF]. Then the big question was whether to defer to the Department of Labor's most recent flip-flop on the issue. The Court (all eight Justices) agreed that no deference was warranted as to the Department of Labor's most recent iteration of an interpretation of the Fair Labor Standards Act. But rather than giving us its interpretation of the statute, the Court (6-2) sent the case back to the 9th Circuit to do that work. The 9th Circuit again found the service advisors are non-exempt, and the case once again went to the Supreme Court.

Justice Thomas, speaking for the Court, put it simply:

"Under the best reading of the text, service advisors are 'salesm[e]n,' and they are 'primarily engaged in . . . servicing automobiles.'"

"A service advisor is obviously a 'salesman.' * * * The ordinary meaning of 'salesman' is someone who sells goods or services."

"Service advisors are also 'primarily engaged in . . . servicing automobiles.' * * * The word 'servicing' in this context can mean either 'the action of maintaining or repairing a motor vehicle' or '[t]he action of providing a service.' * * * Service advisors satisfy both definitions."

Four Justices disagreed. Justice Ginsburg put it this way:

"Service advisors, such as respondents, neither sell automobiles nor service (i.e., repair or maintain) vehicles. 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."