US Supreme Court Reverses Course on Narrowly Construing the Fair Labor Standards Act: Encino Motorcars, LLC v. Navarro

On April 2, 2018, the Supreme Court handed down a decision reversing its practice of narrowly construing exemptions under the Fair Labor Standards Act (FLSA), stating that the Court “reject[s] this principle as a useful guidepost for interpreting the FLSA.” In Encino Motorcars, LLC v. Navarro, No. 16-1362 (U.S. Apr. 2, 2018), the Court held that “service advisers” at car dealerships are exempt from mandatory overtime pay. Service advisers greet customers and listen to their concerns, evaluate the repair and maintenance needs, suggest services, write up estimates, and follow up with the customer during repair. The Court dodged Chevron deference, legislative history, and 1966-67 DOL Occupational Outlook Handbook in order to conclude that the following FLSA exemption applied to service advisors: “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trailers, trucks, farm implements, or aircraft.” The Court stated that the service advisor is “obviously a ‘salesman’” and is integral to a dealership’s service department, often supporting other salesmen and mechanics.” In her dissent, Justice Ginsburg pointed out that service advisers work fixed shifts as opposed to the variable shifts salesmen and mechanics work, do not sell or repair vehicles, and are “precisely the type of workers Congress intended the FLSA to shield from the evil of overwork.”