## Facts

- Encino Motorcars, LLC operated a Mercedes-Benz dealership in Encino, California and employed “service advisors.”
- Service advisors met with customers, recommended repair and maintenance work, sold related services and parts, created service orders, communicated during repairs, and explained completed work.
- The service advisors alleged they regularly worked more than 40 hours per week without overtime pay and sought back overtime under the Fair Labor Standards Act (FLSA).
- The FLSA generally requires overtime pay for work over 40 hours per week, but exempts “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles” at covered dealerships. 29 U.S.C. §§ 207(a), 213(b)(10)(A).
- The Department of Labor’s interpretations had shifted over time, including a 2011 rule excluding service advisors from the exemption; the Supreme Court earlier declined to give that 2011 rule controlling weight because it lacked a reasoned explanation for the change.
- On remand, the Ninth Circuit again held service advisors were not covered by the exemption; the Supreme Court granted review.

## Issues

1. Whether dealership service advisors are “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles” and therefore exempt from FLSA overtime under 29 U.S.C. § 213(b)(10)(A).
2. Whether FLSA exemptions should be construed narrowly as a general interpretive rule.

## Decision

- The Supreme Court reversed the Ninth Circuit, 5–4 (Justice Thomas for the Court), and remanded.
- Service advisors are exempt from FLSA overtime because they qualify as “salesm[e]n … primarily engaged in … servicing automobiles” under § 213(b)(10)(A).
- The Court rejected the view that FLSA exemptions must be construed narrowly, holding they should receive a “fair” reading.

## Legal Principles

- “Salesman” includes a person who sells goods or services; selling repair and maintenance services can satisfy the statutory term.
- An employee may be “primarily engaged in … servicing automobiles” even without performing mechanical repairs when the employee’s main work is selling and coordinating the maintenance and repair services provided to customers.
- The text and grammar of § 213(b)(10)(A) do not support limiting “salesman” to employees who sell vehicles; each listed role may be engaged in either selling or servicing automobiles.
- FLSA exemptions are given a fair interpretation based on statutory text, not a presumption of narrow construction.

## Conclusion

The Court held that dealership service advisors fall within the FLSA’s dealership exemption as salesmen primarily engaged in servicing automobiles, and it instructed that FLSA exemptions are to be interpreted fairly rather than narrowly.


Encino Motorcars, LLC v. Navarro, 584 U.S. 79 (2018)