Supreme Court to decide if service advisers must be paid overtime

By Eric Freedman, Crain News Service

WASHINGTON (Jan. 19, 2016) — The U.S. Supreme Court has agreed to hear a dispute over whether automotive service advisers must be paid overtime.

Arguments before the court are expected this spring.

The issue arose when five service advisers sued Mercedes-Benz of Encino, Calif., for violation of overtime pay requirements of the Fair Labor Standards Act. The dealership has served customers in the San Fernando Valley and greater Los Angeles areas for some 50 years.

A lower-court judge accepted the auto dealership's argument that the exemption for “any salesman, partsman or mechanic primarily engaged in selling or servicing automobiles” covers service advisers.

But the 9th U.S. Circuit Court of Appeals disagreed, finding the provision ambiguous and accepting the U.S. Labor Department's interpretation that the workers were entitled to overtime.

Under that interpretation, it said: “A salesman is an employee who sells cars, a partsman is an employee who requisitions, stocks and dispenses parts, and a mechanic is an employee who performs mechanical work on cars. Service advisors do none of those things. They sell services for cars. They do not sell cars, they do not stock parts and they do not perform mechanical work on cars.”

In earlier cases, two other appellate circuit courts ruled that the exemption covers service advisers.

This report appeared on the website of Automotive News, a Detroit-based sister publication of Tire Business.