In June (2016), we sent a notice regarding the Supreme Court’s decision in Navarro v. Encino Motorcars, LLC, vacating the Ninth Circuit’s ruling that service advisors are not exempt from overtime pay. The Ninth Circuit was instructed by the Supreme Court to reconsider the case without relying upon the Department of Labor’s 2011 regulation indicating service advisors are not “salesman” included in the exemption for overtime pay.
On January 9, 2017, the case was re-heard and the Ninth Circuit again held that service advisors in the Ninth Circuit states are entitled to overtime compensation and are not considered “salesman, partsman, or mechanics” under the Fair Labor Standards Act. The Ninth Circuit is the first court to break from the decades-old practice of considering service advisors as exempt under the salesman exemption.
The Ninth Circuit finding now conflicts with the other U.S. Courts and the Supreme Court will have to resolve the conflict down the road.
The effect of the Court’s decision is that service advisors continue to remain exempt from the payout of overtime in Michigan. If you would like more information on the ruling, or if you need assistance determining if your employees are exempt from overtime pay, please do not hesitate to contact a member of the Dealer Practice Group.
If you have any questions about this ruling please contact a member of our Dealer Practice Group by calling 248-645-9300 or by email:
- Charles A. LeFevre, Chair, [email protected]
- Lawrence F. Raniszeski, [email protected]
- Michael J. O’Shaughnessy, [email protected]
- Eric R. Bowden, [email protected]
- Alycia Pallach Wesley, [email protected]
- Nicholas J. Ranke, [email protected]
