WASHINGTON — The U.S. Supreme Court will hear, for the second time, oral arguments in a case about whether service advisers at car dealerships are eligible for overtime pay.
Encino Motorcars, a Mercedes-Benz dealer in Encino, Calif., appealed a January ruling by the 9th U.S. Circuit Court of Appeals that service advisers are not exempt from overtime requirements. The Supreme Court announced it will consider the case in its upcoming session.
The case has implications for dealers in Western states under the 9th Circuit's jurisdiction -- and possibly for dealerships nationwide. One factor that separates service advisers from repair technicians, parts employees and salespeople is the amount of commissions they earn.
The legal wrangling began when service advisers at the Mercedes-Benz store sued the dealership in 2012 under the Fair Labor Standards Act for failing to pay overtime.
It will be the second time the high court has handled the case. The retailer won in district court, but the decision was reversed twice by the appeals court. The initial case went to the Supreme Court, which in its hearings delved into how dealership service departments operate. The court then wiped out the decision and sent the case back for retrial.
"We are very pleased with the Supreme Court's decision today, and NADA will continue to actively support the case in anticipation that the Court will resolve the issue in favor of the dealer defendants and of all those dealers who have for decades applied the overtime exemption to service advisors," Jared Allen, spokesman for the National Automobile Dealers Association, said in a statement provided to Automotive News.
Erich Kulish is a reporter with Automotive News, a Detroit-based sister publication of Tire Business.