SCOTUS Rules Service Advisors Exempt from OT Requirements

Earlier in this month, the Supreme Court of the United States (SCOTUS), in a 5-4 decision, ruled that service advisors are not eligible to receive overtime pay in accordance with the Fair Labor Standards Act (FLSA).

On Monday, April 2, 2018, the Supreme Court of the United States (SCOTUS) decided (5-4) that service advisors are exempt from Fair Labor Standards Act (FLSA) overtime pay requirements. This decision, which applies to “any salesman, partsman or mechanic primarily engaged in selling or servicing automobiles, trucks, or farm implements,” was made on Encino Motorcars v. Navarro.

A group of former service advisors, including Navarro, who worked at Encino Motorcars argued that because the service advisor position is not mentioned explicitly in the FLSA, that the exemption should not apply to them.

The assenting opinion, written by Justice Clarence Thomas, states “a service advisor is obviously a salesman.”

Justice Ruth Bader Ginsburg led the dissent saying “Because service advisors neither sell nor repair automobiles, they should remain outside the exemption and within the act’s coverage.”

Both opinions in full are available here.

EDA members who have questions about how this decision impacts their business should contact EDA’s legal hotline: 636.349.6206.