Encino Motorcars v. Navarro

Whether the overtime-pay exemption of the Fair Labor Standards Act, 29 U.S.C. § 213(b)(10)(a), applies to car dealership service advisors.

Respondents, service advisors, sued Petitioner, an automobile dealership, alleging failure to provide overtime compensation as required by the Fair Labor Standards Act (FLSA). Respondents' case was dismissed by the federal district court pursuant to the FLSA's car salesman exemption of 29 U.S.C. § 213(b)(10)(a), which exempts “[employees] primarily engaged in selling or servicing automobiles.” On appeal, the Ninth Circuit construed the exemption narrowly, determining that the exclusion of the title “service advisor” in the Act indicated that Congress did not intend for this position to be exempted from overtime pay. Further, the Ninth Circuit determined that the language of the FLSA covers only employees primarily and personally engaged in the selling or servicing of automobiles, not those engaged in selling services for automobiles. The Ninth Circuit’s decision conflicts with precedent in both the Fourth and Fifth Circuits that apply a broader interpretation of § 213(b)(10)(A). Petitioner appeals the Ninth Circuit’s decision to the U.S. Supreme Court, alleging that the court erroneously interpreted § 213(b)(10)(A), because the literal reading of the exemption includes employees who sell services for automobiles.