Employment Litigation · Primary-source case analysis

Encino Motorcars: Service Advisors Fall Within the FLSA Dealership Exemption

By Aneeta Mishra and Timothy Chan

Published April 17, 2026

Encino Motorcars resolved whether service advisors at covered automobile dealerships qualify for the overtime exemption in 29 U.S.C. section 213(b)(10)(A).

The overtime claim

Current and former service advisors at a California Mercedes-Benz dealership sued for unpaid overtime. The dealership argued that they were exempt as salespeople primarily engaged in selling or servicing automobiles. The district court dismissed, the Ninth Circuit reversed, and the Supreme Court addressed the statutory text after an earlier remand.

Service advisors sell services

The Court treated a service advisor as a salesperson because the job entails selling customers repair and maintenance services. Advisors meet customers, identify concerns, recommend work, prepare service orders, communicate during repairs, and explain completed work.

They are engaged in servicing automobiles

The advisors were integral to the servicing process even though they did not personally perform most repairs. The statute's repeated use of the disjunctive 'or' supported reading it to cover a salesperson engaged in servicing, rather than rigidly pairing salesperson only with selling and mechanic only with servicing.

Fair reading, not narrow construction

The Court rejected the principle that FLSA exemptions must always be construed narrowly. Exemptions receive a fair reading based on their text. It reversed the Ninth Circuit and remanded, holding the service advisors exempt from the federal overtime requirement at issue.

Key takeaways

• Job duties, not job title alone, drive the exemption analysis.
• Service advisors may be salespeople primarily engaged in servicing vehicles.
• FLSA exemptions receive a fair textual reading.
• State wage law and duties outside the federal exemption still require separate analysis.