Encino Motorcars, LLC v. Navarro (16-1362)

Because service advisors at car dealerships are “salesm[e]n . . . primarily engaged in . . . servicing automobiles,” 29 U. S. C. §213(b)(10)(A), they are exempt from the Fair Labor Standards Act’s overtime-pay requirement. March 27, 2018


What say you-all?

As someone who had a salaried position that would sometimes involve 60 + hours a week and 24 hour call I really don’t have much sympathy. To keep it vehicle related I was manager of delivery warehouse.

1 Like

I’ve actually been at that particular Benz dealership

I’ve never worked there, but I’ve bought parts there

It’s in a fairly upscale location. Not all Benz dealerships are, by the way.

An interesting sidenote . . . This dealership used to be owned by a Mr. Stiegler, and it bore his name. After he passed away several years ago, the kids may or may not have taken over. In any case, it no longer bears his name. it may be one of those rare dealerships which is owned by MBUSA

I think of the primary functions of the service advisor as being

  1. to put into writing your complaints or service requests and to initiate all the documentation
  2. in the event of a dispute, to protect the dealership’s reputation, which may in some cases mean calming the customer by any means
  3. to act as a “barrier” between the actual shop technicians and the customer, primarily IMHO to prevent verbal conflicts from initiating.

My experience over the years has been that most service advisors are clerical only and have just enough car knowledge to dissuade the consumer from getting aggravated… and, sadly, often not enough to ask the right questions and/or clearly articulate the customer’s concerns… which are often obfuscated by the customer’s own lack of knowledge, making the final product way less that accurate.

I’ve thought about it before, and to be honest I don’t know how knowledgeable I think a service advisor SHOUD be. Perhaps the solution would be to more closely involve the shop foreman/manager in the articulation of the complaint up-front. But I don’t know how this would be accomplished cost effectively.

If the employees aren’t getting the pay they think they deserve, wouldn’t they just find a job elsewhere? Or am I missing something?

Reminds me of a Silicon Valley story. A high tech worker quit b/c he got a better offer of stock options across the street. On the first day at the new job the following Monday he was told the company strategy had changed, he wasn’t needed, and he’d been laid off starting that day, Monday. But on the upside, in compensation for his trouble, his stock options vested immediately. Turns out they were worth $50,000 :slight_smile: That afternoon he phoned up the prior manager, told him what happened, got his old job back. So the next day, Tuesday, he pulls into his old parking driving a new car.

Eh, so? Dealership mechanics have always been exempt from overtime pay. I don’t get overtime for working over 40 hours a week. My wife hasn’t received overtime for over 40 hours in 25 years.

You want to be a clock watcher and get overtime for every minute over 40 hours? You can be an hourly grunt or you can climb the ladder and get paid for doing a job. Not just for how long you work but for how much you produce.

The automotive industry isn’t for everyone.

1 Like

When I was a teamster dockworker and city driver we got overtime pay by contract, not by law. When I was a Teamster road driver there was no overtime, were were paid by the mile for driving and by the hour for waiting after the first hour, for and actual work like dropping and hooking. loading or unloading. We did not get paid for pre-trip inspections, which sometimes involver 4 tractors. 12 trailers and 6 dollies a day, paperwprk, logging , finding equipment. We were allowed (forced) to work 70 hours every 8 days and that did not count waiting for work call or time spent stuck out of town sleeping, waiting for loads or a day stuck out of town because you had run out of hours you were allowed to work.

I tend to agree with @asemaster

Way back, I knew what I was getting into. I knew how mechanics got paid, and that it was a cutthroat industry, for various reasons which we’ve discussed countless times on this very forum. It was made very clear to me that it wasn’t going to be easy to earn money.

And the service advisors also knew what they were getting into. The good and productive ones did just fine, while the others fell by the wayside

Ironically enough, some of the worst service advisors I’ve seen were former mechanics. Just because you know cars is no guarantee that you’ll be a great service advisor. Usually the most successful ones were only moderately knowledgeable about cars. These have been my observations, and somebody else may very well have their own, which differ from mine

I’ve said it before, and I’ll say it again . . . even though people have disagreed with me on this, and will do so again . . . service advisors are salespeople. Sure, they’re not working at sears or macy’s, but they’re still salespeople.

I don’t find that ironic. By and large the qualities that make a good mechanic and the qualities that make a good service writer are mutually exclusive.

As a side note, I’ve never worked at a place where the service writer(s) made as much money as the top mechanic in the shop.

1 Like

I think people going into the auto service industry have plenty of resources available to discover what they’re getting into before they pay for school and tools. There are some industries that have unpleasant aspects that you simply can’t get away from. Firefighters have to be on call 24/7. Doctors have to treat people with deadly communicable diseases. Lawyers have to bill 1,000+ hours per year in addition to all the non-billable work they have to do, which is why they tend to put in 60+ hour work weeks.

And mechanics have to put up with not getting paid for some of the time they spend at work. If that’s something you don’t want to put up with, don’t be a mechanic.

One aspect that I do disagree with in the decision is the idea that service writers are primarily engaged in servicing automobiles. To my mind, that’s like saying the hospital marketing department is primarily engaged in performing surgery. The service writer is the salesman and the liaison between the customer and the mechanic (and believe me, I’ve often wished I could just talk to the mechanic directly because he almost always knows a lot more about fixing cars than the goober at the service counter). In all the dealership service centers I’ve seen, I’ve never once encountered a service writer with dirty hands.

I guess I have been lucky, I have not really had any bad experiences with the service writers . I have even had one escort me back to the mechanic so the problem could be fully explained. Granted there are times when a service has been mentioned or recommended and explained why without being obnoxious.

Another vote for asemaster. Speaking for myself and every other mechanic I’ve known none of us have ever gotten one dime extra no matter how many hours a week we worked.

A few years ago there was a suit in CA regarding flat rate mechanics with no guarantee not being paid for the hours they spend idle with no work. I very vaguely remember the court ruled that the dealers had to pay minimum wage for those idle hours or for other chores outside the scope of their mechanic duties.
Some dealers have coerced the mechanics into things like shoveling snow off the drive and so on; for free.

I’m sure dealers in CA have figured a way around the minimum wage requirement… ;-(

There’s a big difference in someone working 8:00 to 5:00 Monday thru Friday for $100,000+ in California not being paid time+1/2 if he must often stay on the job for half an hour vs someone earning $10/hour being classified as salaried at $400/week with no overtime. But if a mechanic is paid a base rate on the clock then he must accept shoveling snow when needed as part of his job.

But has the dealership decided that the service writers must work alternate Saturdays for free after working a 40+ hour 5 day week? As always the devil is in the details.

1 Like

It looks to me like the thought that won over the Court was that the Service Adviser was paid some sort of commissions for the work that was purchased. I know that the responses here have frequently said the Service Adviser was upselling work and manipulating customers into considering buying a new car rather than fixing the old one. That’s all salesmanship. I don’t know how people are paid except from random bits of information. Does a Service Adviser get a base plus commissions, or just a draw against commissions?

I can understand a mechanic shoveling snow IF he’s being given a guarantee. The deal around here is that for myself, other mechanics, and all of the dealerships I’ve worked at or heard of, no one gets a guarantee. If you stand around drinking coffee for 2 hours before a job shows up then it’s 2 hours you’ve spent for free.

The main focus of the economy in OK is oil/gas and farming. Oil and gas is very prone to cycles. A bad cycle hit where I live when I worked for Nissan. Every mechanic would come in at 8 in the morning and there was zero work to do. Just like a light switch it went from boom to bust. Noon would roll around with not one toolbox being unlocked, Needless to say, things got very, very tense around there with every mechanic becoming a potential axe murderer. After 2 weeks of flagging less than 15 hours a week while spending 40 on site I threw the towel in. Luckily I found a good job but it was 80 miles away and my commute went up drastically.

As for service advisors, the ones I’ve known got paid differently depending upon the dealer. Some got a guarantee and others got a stipend with a commission on top of that.
The advisors I’ve worked with sold only what was needed in regard to the customer complaint. Some are very good with communications while having no mechanical ability and others not so much.

Whether an employee is required to be paid overtime is defined in the Fair Labor Standards Act of 1938 as currently amended. “Exempt” means exempt from the provisions of the Act mandating minimum wage and overtime provisions. The glitch is that there is a large list of jobs/positions specifically exempted from the provisions. Generally these fall under the categories of “Executive” and “Professional”. Each category has “tests” that the job must meet to allow an employer to categorize them as 'exempt". An “executive”, for example, has to have people working for him/her.

I don’t know whether service writers can be categorized as exempt. I cannot imagine that would be fair to them. They’re not being paid for their knowledge, or for accomplishments, and they really lack any authority. They’re basically clerical. I respect any honest worker in any job, but cannot imagine them as exempt.

1 Like

How about instead of dragging everyone down we lift everyone up, support everyone who wants to get paid for all of his/her work?

1 Like

Sales people are paid a commission for their work, they are paid based on their performance, not the time clock.

Service writers are considered salespeople, and therefore exempt.

It’s a bit of a cat and mouse game. Here in Silicon Valley most high tech professional jobs (engineers, scientists, etc) 25 years ago were filled by employees exempt from overtime pay. In some cases an engineer would be responsible for supervising a non-exempt technician, and b/c of that the technician would be making considerably more money than the professional engineer. Many of the engineers and scientists figured this out, and resigned their jobs as employees, and b/c their services were still needed, the company hired them back as contract workers at an hourly rate, for all hours worked. Eventually the CEO’s figured out this was costing more in labor costs than before, so they staffed up with foreign workers using the H1 B Visa and fired many of the contract workers. The H1B workers proved to be very easy to convince to work overtime w/out pay, b/c if they don’t have a job they get deported. B/c of the corporate greed factor, the H1B tends to be abused, with US citizens getting fired and replaced by foreign nationals (e.g. Disney), and currently the H1B method seems to be falling out of favor. Like I say, its a cat and mouse game. C’est la vie.