Supreme Court Declares Service Advisors Exempt From OT Pay

Order Reprints

April 2, 2018—The Supreme Court on Monday ruled that service advisors at dealerships are exempt from federal overtime compensation requirements. In a 5-4 decision, the court declared that advisors are exempt due to the Fair Labor Standards Act and its overtime provisions because those workers are “salesmen primarily engaged in servicing automobiles,” as reported by

“A service advisor is obviously a ‘salesman,’” Justice Clarence Thomas stated, delivering the majority opinion. “The ordinary meaning of ‘salesman’ is someone who sells goods or services, and service advisors sell customers services for their vehicles.”

The case, which the court heard for the second time, centered on a lawsuit that current and former service advisers brought against Encino Motorcars LLC for back pay.

Justice Ruth Bader Ginsburg issued a dissenting opinion and said service advisors “neither sell automobiles nor service vehicles” and, as a result, should be covered by the Fair Labor Standards Act.

“By stretching the [law’s] exemption to encompass even the lowest income service advisors compensated on commission, the court upsets Congress’ careful balance, while stripping away protection for the most vulnerable workers in this occupation.”

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