California Car Dealership Asks For Tune-Up Of Federal Overtime Laws

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California Car Dealership Asks For Tune-Up Of Federal Overtime Laws

By Greg Blueford

On January 15, the United States Supreme Court agreed to hear a dispute on whether certain car dealership workers should be entitled to overtime pay. In Encino Motorcars LLC v. Hector Navarro et al., Encino Motorcars, LLC (“Encino”) challenged a Ninth Circuit ruling that “service advisors,” defined as the workers at car dealerships who talk with customers about the service to be done on their cars, are not exempt under Fair Labor Standards Act (“FLSA”) and are entitled to overtime pay. Encino’s service advisors initially sued the dealership the dealership in 2012, alleging their job descriptions required them to greet car owners and sell additional services beyond what prompted the customer’s visit, but asserted they did not sell cars or perform repairs.

In March 2015, the Ninth Circuit ruled that service advisors should be eligible for overtime pay because a U.S. Department of Labor (“DOL”) regulation only excludes salespeople and mechanics from overtime pay, and not service advisors. According to Encino, the Ninth Circuit ruling runs counter to previous rulings by the Fourth and Fifth Circuits, both of which declined to adopt the DOL’s definitions. The Ninth Circuit says Encino chose to rely on a DOL regulation that holds that service advisors are not exempt from receiving overtime because they do not “personally service vehicles,” instead of FLSA’s plain language that exempts “any salesman, partsman or mechanic primarily engaged in a selling or servicing automobiles” from overtime.

The service advisors urged the Supreme Court to pass on the case, saying the issue is not of national concern and any ruling would have limited effect. Encino countered by saying the Supreme Court should take the opportunity to restore uniformity to the enforcement of labor laws. Arguments were heard on April 19, 2016 and the case is currently pending.


While this case has limited application to car dealership workers under federal wage and hour law, it is still beneficial to the wage and hour landscape as a whole. Employment and labor laws can be interpreted differently across jurisdictions, which is what happened in this case. It is advantageous to all, employers, employees and counsel, to have one rule of law that can be applied uniformly. Please contact The Saqui Law Group should you have any questions regarding any questions regarding hours of service or overtime laws.

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