Encino Motorcars, LLC v. Navarro

579 U.S. 211, 195 L. Ed. 2d 282, 136 S. Ct. 2117, 195 L. Ed. 2d 382, 26 Fla. L. Weekly Fed. S 295, 2016 U.S. LEXIS 3924, 84 U.S.L.W. 4424, 26 Wage & Hour Cas.2d (BNA) 877
Supreme Court of the United States·Decided June 20, 2016·No. 15–415.·Published·Cited by 461 cases

Opinion

Justice KENNEDY delivered the opinion of the Court.

This case addresses whether a federal statute requires payment of increased compensation to certain automobile dealership employees for overtime work. The federal statute in question is the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq., enacted in 1938 to "protect all covered workers from substandard wages and oppressive working hours." Barrentine v. Arkansas-Best Freight System, Inc., 450 U.S. 728 , 739, 101 S.Ct. 1437 , 67 L.Ed.2d 641 (1981). Among its other provisions, the FLSA requires employers to pay overtime compensation to covered employees who work more than 40 hours in a given week. The rate of overtime pay must be "not less than one and one-half times the regular rate" of the employee's pay. § 207(a).

Five current and former service advisors brought this suit alleging that the automobile dealership where they were employed was required by the FLSA to pay them overtime wages. The dealership contends that the position and duties of a service advisor bring these employees within § 213(b)(10)(A), which establishes an exemption from the FLSA overtime provisions for certain employees engaged in selling or servicing automobiles. The case turns on the interpretation of this exemption.

I

A

Automobile dealerships in many communities not only sell vehicles but also sell repair and maintenance services. Among the employees involved in providing repair and maintenance services are service advisors, partsmen, and mechanics. Service advisors interact with customers and sell them services for their vehicles. A service *2122 advisor's duties may include meeting customers; listening to their concerns about their cars; suggesting repair and maintenance services; selling new accessories or replacement parts; recording service orders; following up with customers as the services are performed (for instance, if new problems are discovered); and explaining the repair and maintenance work when customers return for their vehicles. See App. 40-41; see also Brennan v. Deel Motors, Inc., 475 F.2d 1095 , 1096 (C.A.5 1973) ; 29 CFR § 779.372 (c)(4) (1971). Partsmen obtain the vehicle parts needed to perform repair and maintenance and provide those parts to the mechanics. See § 779.372(c)(2). Mechanics perform the actual repair and maintenance work. See § 779.372(c)(3).

In 1961, Congress enacted a blanket exemption from the FLSA's minimum wage and overtime provisions for all automobile dealership employees. Fair Labor Standards Amendments of 1961, § 9, 75 Stat. 73 . In 1966, Congress repealed that broad exemption and replaced it with a narrower one. The revised statute did not exempt dealership employees from the minimum wage requirement. It also limited the exemption from the overtime compensation requirement to cover only certain employees-in particular, "any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trailers, trucks, farm implements, or aircraft" at a covered dealership. Fair Labor Standards Amendments of 1966, § 209, 80 Stat. 836 . Congress authorized the Department of Labor to "promulgate necessary rules, regulations, or orders" with respect to this new provision. § 602, id., at 844 .

The Department exercised that authority in 1970 and issued a regulation that defined the statutory terms "salesman," "partsman," and "mechanic." 35 Fed.Reg. 5896 (1970) (codified at 29 CFR § 779.372 (c) ). The Department intended its regulation as a mere interpretive rule explaining its own views, rather than a legislative rule with the force and effect of law; and so the Department did not issue the regulation through the notice-and-comment procedures of the Administrative Procedure Act. See 35 Fed.Reg. 5856 ; see also 5 U.S.C. § 553 (b)(A) (exempting interpretive rules from notice and comment).

The 1970 interpretive regulation defined "salesman" to mean "an employee who is employed for the purpose of and is primarily engaged in making sales or obtaining orders or contracts for sale of the vehicles or farm implements which the establishment is primarily engaged in selling." 29 CFR § 779.372 (c)(1) (1971). By limiting the statutory term to salesmen who sell vehicles or farm implements, the regulation excluded service advisors from the exemption, since a service advisor sells repair and maintenance services but not the vehicle itself. The regulation made that exclusion explicit in a later subsection: "Employees variously described as service manager, service writer, service advisor, or service salesman ... are not exempt under [the statute]. This is true despite the fact that such an employee's principal function may be disagnosing [ sic ] the mechanical condition of vehicles brought in for repair, writing up work orders for repairs authorized by the customer, assigning the work to various employees and directing and checking on the work of mechanics." § 779.372(c)(4).

Three years later, the Court of Appeals for the Fifth Circuit rejected the Department's conclusion that service advisors are not covered by the statutory exemption.

Free access — add to your briefcase to read the full text and ask questions with AI

Encino Motorcars, LLC v. Navarro, 579 U.S. 211, 195 L. Ed. 2d 282, 136 S. Ct. 2117, 195 L. Ed. 2d 382, 26 Fla. L. Weekly Fed. S 295, 2016 U.S. LEXIS 3924, 84 U.S.L.W. 4424, 26 Wage & Hour Cas.2d (BNA) 877 (2016).

579 U.S. 211 (Encino Motorcars, LLC v. Navarro) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

Bonney Forge Corp. v. United States
2023 CIT 120 (Court of International Trade, 2023)
Lease v. Cardona
D. Utah, 2021
MediNatura, Inc. v. FDA
998 F.3d 931 (D.C. Circuit, 2021)
Brackeen v. Haaland
994 F.3d 249 (Fifth Circuit, 2021)
Ruben Molina-Aranda v. Black Magic Enterpri
983 F.3d 779 (Fifth Circuit, 2020)
Music Choice v. CRB
970 F.3d 418 (D.C. Circuit, 2020)
Clean Wisconsin v. EPA
D.C. Circuit, 2020
State of California v. Alex Azar, II
950 F.3d 1067 (Ninth Circuit, 2020)
Planned Parenthood of Greater v. Ushhs
946 F.3d 1100 (Ninth Circuit, 2020)
New Mexico Health Connections v. HHS
946 F.3d 1138 (Tenth Circuit, 2019)
Altera Corp. v. Cir
Ninth Circuit, 2019
Mozilla Corporation v. FCC
940 F.3d 1 (D.C. Circuit, 2019)