Supreme Court Introduces “Fair” Reading Of FLSA Exemptions

by Fisher Phillips

Fisher Phillips

If you’re not an auto dealer and you missed last month’s Supreme Court decision in Encino Motorcars, LLC v. Navarro, we forgive you. After all, a ruling on the correct application of the “salesman” exemption to service advisors under Section 213(b)(10) of the Fair Labor Standards Act (FLSA) doesn’t appear to be of immediate interest to anyone outside the dealership industry. 

However, tacked to the end of a thoughtful discussion on the rules of statutory construction, Justice Clarence Thomas’ majority opinion contains sweeping language potentially altering the FLSA exemption analysis for all employers across the country.

Brief Background 

Again, if you’re not in the auto dealer industry, you don’t need to know much about the details of the case (but if you are, read our alert here). All you really need to know is that the FLSA has contained language since 1966 confirming that “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles” is considered exempt from overtime. For many years, the U.S. Department of Labor (USDOL) permitted service advisors—those employees at a dealership who evaluate a customer’s concerns, determine the service needs of the vehicle, and sell supplemental services—to be considered exempt under this definition.

But in 2011, the USDOL changed its mind and announced that service advisors would no longer be considered exempt. That led to a seven-year battle in the courts, culminating in the April 2, 2018 employer victory at the Supreme Court (where the dealership was represented by attorneys from the Fisher Phillips Automotive Dealership Practice Group). The 5-4 majority decision determined that service advisors are also primarily engaged in servicing automobiles and should be considered exempt from overtime because, as Justice Thomas reasoned, “if you ask the average customer who services his car, the primary, and perhaps only, person he is likely to identify is his service advisor.”

What Do Employers Need To Know About This Decision? 

Luckily for employers across all industries, the Court did not stop there. The justices took issue with one of the positions taken by the plaintiffs: that courts and the USDOL have long instructed that “exemptions to the FLSA should be construed narrowly,” thereby tilting the playing field in favor of employees in any wage and hour action involving FLSA exemptions. 

The Court’s opinion swept aside this principle. According to the Court, “the FLSA gives no ‘textual indication’ that its exemptions should be construed narrowly.” Therefore, as Justice Thomas wrote for the majority, “there is no reason to give them anything other than a fair (rather than a ‘narrow’) interpretation.” As a result, courts can no longer simply rely on the familiar “exemptions-should-be-construed-narrowly” crutch to deny exempt status. Rather, as the Court concluded, the USDOL and lower courts across the country must now give exemptions “a fair reading” under the law.

It’s important to note that the Navarro decision does not mean that exemptions will now be construed broadly. Instead, courts and agencies have been instructed to look at the FLSA exemptions through a neutral lens. This is still good news for employers. As a result, you will want to revisit the exemption status of your employees with your legal counsel to determine if any alterations are now justified.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Fisher Phillips | Attorney Advertising

Written by:

Fisher Phillips

Fisher Phillips on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.