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Encino case has long history

Posted On: Nov. 4, 2018 12:00 AM CST

The Encino Motorcars LLC v. Navarro et al. Fair Labor Standards Act case has accumulated a lot of mileage.

Current and former service advisers for Encino, California-based Encino Motorcars, a Mercedes-Benz dealership, first filed suit in 2012, contending Encino Motorcars had violated the FLSA in failing to pay them overtime, according to the April 2 U.S. Supreme Court ruling in the case.

In 2015, the 9th U.S. Circuit Court of Appeals in San Francisco reversed a lower court ruling and held the advisers were not exempt from being paid overtime.

In its first ruling in the case in 2016, the U.S. Supreme Court vacated the 9th Circuit ruling, explaining the appeals court had relied on a “procedurally ineffective” 2011 Department of Labor rule. The high court, though, did not decide the issue of whether the exemption covered service advisers.

The case was then remanded back to the 9th Circuit, which in 2017 once again held the overtime exemption does not include service advisers.

In overturning that ruling in a 5-4 decision, Justice Clarence Thomas, writing for the high court’s majority, said the FLSA exempts salesmen from its overtime-pay requirement.

“A service advisor is obviously a ‘salesman,’” Justice Thomas wrote. “The ordinary meaning of ‘salesman’ is someone who sells goods or services … Service advisors do precisely that,” wrote Justice Thomas, in holding car service advisers are exempt from being paid overtime.

In her dissenting opinion, Justice Ruth Bader Ginsburg said Congress “explicitly exempted from the Fair Labor Standards Act hours requirement only three occupations: salesmen, partsmen and mechanics. The Court today approves the exemption of a fourth occupation, automobile service advisers.”