Supreme Court rules auto service advisers are exempt from overtime pay

Supreme Court rules auto service advisers are exempt from overtime pay
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The Supreme Court ruled Monday that service advisers at car dealerships are exempt from federal overtime pay requirements.

In a 5-4 decision, the court held that service advisers are exempt under the Fair Labor Standards Act’s overtime provisions because they are salesmen primarily engaged in servicing automobiles.

“A service advisor is obviously a ‘salesman,’” Justice Clarence Thomas wrote in delivering the majority opinion for the court.


“The ordinary meaning of ‘salesman’ is someone who sells goods or services, and service advisors 'sell customers services for their vehicles.'”

Chief Justice John Roberts and Justices Anthony Kennedy, Samuel Alito and Neil Gorsuch joined Thomas in the majority.

The case, which the court heard for the second time, centered on a lawsuit current and former service advisers brought against Encino Motorcars LLC for back pay.

Justice Ruth Bader Ginsburg issued a dissenting opinion, which Justices Stephen Breyer, Sonia Sotomayor and Elena Kagan joined.

Ginsburg said service advisers “neither sell automobiles nor service vehicles” and should be covered by the Fair Labor Standards Act.

“In crafting the commission-pay exemption, Congress struck a deliberate balance: It exempted higher paid commissioned employees, perhaps in recognition of their potentially irregular hours, but it maintained protection for lower paid employees, to vindicate the Act’s ‘principal . . . purpose’ of shielding ‘workers from substandard wages and oppressive working hours,’” she wrote.

“By stretching the [law’s] exemption to encompass even the lowest income service advisors compensated on commission, the court upsets Congress’ careful balance, while stripping away protection for the most vulnerable workers in this occupation.”

This is the second time this case has come before the court. In 2016, the justices rule 6-2 that the Department of Labor had to explain why it changed its longstanding policy on which employees at car dealerships are exempt from overtime pay.