Taking Care of HR Business
        A blog from the attorneys of Verrill

        Supreme Court to Review “Service Advisors” Entitlement to Overtime

        by Tawny L. Alvarez on January 19, 2016

        On Friday, the United States Supreme Court granted certiorari in a case where it will determine “whether ‘service advisors’ at car dealerships are exempt . . . from the FLSA’s overtime pay requirements.” Up for review is the Ninth Circuit’s decision in Encino Motorcars, LLC v. Navarro, No. 13-55323 (9th Cir. Mar. 24, 2015), in which the Ninth Circuit found that Mercedes Benz “service advisors” did not personally service automobiles and therefore were not subject to the overtime exemption. The “service advisors” instead, “meet and greet Mercedes Benz owners as they enter the service area of the dealership and then . . . evaluate the service and/or repair needs of the vehicle owner in light of complaints given them by these vehicle owners.” The plaintiff employees were paid on a commission basis only, receiving neither hourly wages or a salary.

        The FLSA overtime pay provision in question provides that overtime for employees who work over forty (40) hours in a workweek, does not apply to: “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trucks, or farm implements, if he is employed by a nonmanufacturing establishment primarily engaged in the business of selling such vehicles or implements to ultimate purchasers”.

        The Ninth Circuit noted, “It is not clear from the text of the statute whether Congress intended broadly to exempt any salesman who is involved in the servicing of cars or, more narrowly, only those salesmen who are selling the cars themselves.” Instead, the court relied upon a 2011 Labor Department regulation that noted that service advisors do not fall within the exemption because they are not personally servicing automobiles. That regulation defined salesman as “an employee who is employed for the purpose of and is primarily engaged in making sales or obtaining orders or contracts for sale of the automobiles, trucks, or farm implements that the establishment is primarily engaged in selling,” while a partsman is “any employee employed for the purpose of and primarily engaged in requisitioning, stocking, and dispensing parts,” and a mechanic is defined as “any employee primarily engaged in doing mechanical work (such as get ready mechanics, automotive, truck, or farm implement mechanics, used car reconditioning mechanics, and wrecker mechanics) in the servicing of an automobile, truck or farm implement for its use and operation as such.” 29 C.F.R. § 779.372(c). In concluding that “service advisors” were not covered by this exemption, the Ninth Circuit acknowledged that the holding conflicted with rulings in “the Fourth and Fifth Circuits, several district courts, and the Supreme Court of Montana,” all of which have held that service advisors are exempt employees. Other courts have refused to defer to the Department of Labor’s “counter-textual interpretation” of the FLSA exemption which limits salesmen to only those who sell cars and not those who sell (or up sell) services.

        For our vehicle dealership clients and friends who are currently categorizing all sales associates (in both the service center and the dealership) as exempt employees, the Supreme Court’s decision to grant certiorari on this issue could potentially affect overtime requirements as to a significant portion of your service sales force. Verrill Dana’s Labor and Employment Practice Group will keep clients advised when the Court rules on this issue.

        Taking Care of HR Business

        Human resource professionals, supervisors, and company executives are constantly confronted with a changing legal landscape. Verrill’s Taking Care of HR Business blog is designed to keep you informed about the latest and most significant legal developments that affect employers.

        Key Contacts

        Subscribe

        Looking for more great content? Subscribe for regular legal updates and information delivered right to your inbox.

        Firm Highlights

        Media Mentions

        Robert Keach Quoted in Law360 on SIMAD Summer Camp Bankruptcy Sale

        Verrill attorney Robert Keach was recently quoted in a Law360 article examining the Chapter 11 bankruptcy proceedings involving SIMAD Holdings and...
        Media Mentions

        Chris Tsouros Featured in Law360’s Coverage of Sports Real Estate Deals

        Verrill Partner Chris Tsouros was recently recognized in a Law360 article highlighting law firms involved in significant sports real estate projects...
        Blog

        What Maine’s New Employer Surveillance Law Means for Maine Employers

        Maine employers who monitor their workforce, whether through productivity software, GPS, call recording, or cameras, have a new compliance obligation...
        Blog

        Run Don’t Walk: The Implication of “While Supplies Last” Prize Promotions

        This month a big-chain grocery store has been offering daily mystery boxes during specific timed drops on a first-come, first-served basis, to users...
        Blog

        Maine’s Noncompete Statute is Reshaped for Health Care Workers: What You Need to Know

        Employers of individuals who are licensed under state law to perform, or provide, health care services in the State of Maine should be prepared for...
        Media Mentions

        Steven Davis Featured in the Environmental Business Journal

        Steven Davis, President of Verrill Strategic Consulting, was recently interviewed and featured in the Environmental Business Journal, Volume 39...
        Blog

        What is a Bonus for Purposes of ERISA?

        An ongoing dispute about a Department of Labor advisory opinion published last September raises a basic but unanswered question under the ERISA: What...
        Media Mentions

        Verrill Recognized by WMTW for Partnership Supporting Hunger Relief in Maine

        Verrill was recently featured in coverage by WMTW News 8 for its role in a collaborative effort to combat food insecurity across southern...
        Press Releases

        33 Verrill Attorneys, Across Four Offices, Recognized in the 2026 Chambers USA Guide

        BOSTON, Massachusetts, PORTLAND, Maine, WESTPORT, Connecticut, and WASHINGTON, D.C. – Verrill has been recognized as a Leading Firm in 14...
        Blog

        Will the Knicks Beat the Spurs? (Are Prediction Market Event Contracts Gambling?)

        For those of you who like to keep score, currently 18 states are engaged in litigation over prediction markets, such as Kalshi and Polymarket,...
        Alerts and Newsletters

        DOJ Announces Faster Review and Enhanced Enforcement for Benefits-Fraud FCA Matters

        On May 27, 2026, the U.S. Department of Justice (DOJ) Civil Division issued a new memorandum, “Accelerating Review and Enhancing Enforcement in...
        Alerts and Newsletters

        DOJ Announces Minnesota Health Care Fraud Takedown; Signals Intensified Medicaid Enforcement Nationwide

        On May 21, the Department of Justice (“DOJ”) announced a first-of-its kind Minnesota Health Care Fraud Takedown charging 15 defendants, including...