Navarro v. Encino Motorcars

Where there is more than one reasonable interpretation of an administrative regulation, and the administrative agency has accepted one of those interpretations, the court must defer to that decision.

Hector Navarro, Mike Shirinian, Anthony Pinkins, Kevin Malone, and Reuben Castro (collectively “Navarro”), were employed as service advisors by Encino Motorcars. Navarro brought an action against Encino Motorcars for several violations under the Fair Labor Standards Act (“FLSA”), including failure to pay overtime wages. The district court dismissed the failure to pay claim because it concluded the service advisors fell within the FLSA exemption for “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles.” On appeal, the Ninth Circuit held that where there is more than one reasonable interpretation of an administrative regulation, and the administrative agency has already accepted one of those interpretations, the court must defer to that decision under Chevron , U.S.A., Inc. v. Natural Res. Def. Council, Inc. Therefore, because the regulation does not define “salesman, partsman, or mechanic,” and the agency reasonably read the statutory text to mean that service advisors do not fit into any of those definitions, the court deferred to the agency’s interpretation. Additionally, the Department of Labor’s legislative history, as well as the history of the application of the FLSA, leads to a finding that service advisors are non-exempt employees. Therefore, Navarro is not exempt as a salesman, partsman, or mechanic. AFFIRMED in part; DISMISSED in part; REVERSED in part; and REMANDED.