Overtime dispute between auto dealers, advisers back in Supreme Court

A dispute over whether auto service advisers are exempt from overtime is expected to finally be decided by the U.S Supreme Court.

The court agreed to hear the case involving an interpetation of the wording of a provision of the Fair Labor Standards Act (FLSA.)

Essentially, the high court court is asked to decide whether auto service advisers are included under the FLSA provisions that exempts overtime pay to "any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles."

The case has its roots in a suit by service advisers against their employer, Encino Motorcars of California, over the non-payment of overtime.

Bill Pokomy, a Chicago-based employment lawyer with Franczek Radelet, said the Supreme Court has already decided one argument, over whether a Department of Labor regulation stating that the advisers are eligible for overtime applies.

It does not, the justices said last year, but they sent the case back to U.S. Court of Appeals for the 9th Circuit, based in San Francisco, asking it to reconsider the narrower question over whether service advisers are exempt under the salesman-partsman-mechanic umbrella.

The appeals court ruled the service advisers are non-exempt under the FLSA. Dealers will be watching closely because misclassified employees can recover overtime pay dating back two years, Pokomy told Mega Dealer News.

He warned auto dealers should be careful denying overtime under the salesman-partsman-mechanic exemption while they wait for the Supreme Court decision. And he added that they should be also be aware of separate state laws should the court decide advisers are non-exempt.

It does not affect those service advisers primarily paid a commission. That's exempt under a different provision of the FLSA, Pokomy said.

"There is a 5-4  majority for the conservative justices," said Pokolmy. "But I could really see this going either way."

He added, "While you would assume the conservatives are more business friendly – and this will benefit employers – they also are known for wanting to look at the structured language of Congress."

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Organizations in this story

Franczek Radelet P.C. 300 S Wacker Dr Chicago, IL 60606

U.S. Court of Appeals for the Ninth Circuit 95 7th St San Francisco, CA 94103

U.S. Supreme Court 1 First St NE Washington, DC 20543