Encino Motorcars, LLC v. Navarro

Encino Motorcars, LLC v. Navarro

Opinion

 [*214]  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 [****6]  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.

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  [***389]  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  [*215]  performed (for instance, if new problems are [****7]  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 (CA5 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, 104 S. Ct. 2778, 81 L. Ed. 2d 694.

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