Supreme Court Rules Service Advisors Exempt from Overtime-Pay

On April 2, 2108, the U. S. Supreme Court, in a 5-4 decision, ruled that service advisors are exempt from the overtime-pay requirement of the Fair Labor Standards Act (“FLSA”). The ruling reverses the Ninth Circuit Court of Appeals decision in Encino Motorcars, LLC v. Navarro, 845 F.3d 930 (2017).

The Court determined that because a service advisor is a salesman who is primarily engaged in servicing automobiles, they are exempt from the FLSA overtime pay requirement. The FLSA exempts from the overtime-pay requirement “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles at a covered dealership.”

The Supreme Court’s ruling is great news for motor vehicle dealership service departments. Questions concerning the impact of the decision on your business should be directed to your dealer lawyer.