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Vol. 41, No. 2 Autumn 2015

Employee Relations Law Journal

By: Howard S. Lavin, Elizabeth E. DiMichele

Are car dealership employees that service customers by evaluating their automobiles, recommending repairs and soliciting supplemental services, all to be performed by the dealerships’ mechanics, exempt from the overtime pay requirements of the Fair Labor Standards Act of 1938 (FLSA)?  Much like the case of pharmaceutical salespeople who had been treated as exempt for decades until the Second Circuit held them to be non-exempt in 2010,  until recently the courts that had considered the question had held car dealership “service advisors” to be exempt pursuant to Section 213(b)(10)(A) of the FLSA.  This time, the Ninth Circuit created the circuit split, holding that service advisors do not meet the definition of a “salesman, partsman, or mechanic” entitled to the exemption as defined by the United States Department of Labor (DOL) in the implementing regulations (the Regulations).  Concluding that the DOL’s interpretation is entitled to deference, the Ninth Circuit rejected the holdings of the Fourth and Fifth Circuits that such car dealership employees are exempt employees. 

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