Hector Navarro v. Encino Motorcars
780 F.3d 1267
9th Cir.2015Background
- Encino Motorcars employs Navarro, Shirinian, Pinkins, Malone, and Castro as 'service advisors' at a Mercedes dealership.
- Service advisors are paid on commission; no plaintiff receives hourly wages or salary.
- Plaintiffs allege FLSA overtime violations for service-advisor employment.
- District court dismissed overtime claim as exempt under 29 U.S.C. § 213(b)(10)(A).
- Court applies a two-step Chevron framework to determine whether to defer to agency interpretation.
- Regulatory definitions in 29 C.F.R. § 779.372(c) narrowly define salesman, partsman, and mechanic.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether service advisors fall within the § 213(b)(10)(A) exemption. | Service advisors are 'salesmen' or engaged in selling/servicing cars. | Regulation narrowly defines exempt roles; service advisors do not fit. | Not exempt under § 213(b)(10)(A). |
| Whether the agency regulation should be given deference under Chevron. | Regulation should be read broadly to include service advisors. | Regulation narrowly construed; agency position should be approved if reasonable. | Chevron deference applies; regulation deemed reasonable. |
| Whether the Department of Labor's 2011 regulation is a permissible interpretation of the statute at Chevron Step Two. | Narrow interpretation is contrary to statute's broad text. | Narrow interpretation aligns with long-standing agency practice. | Regulation is a permissible, reasonable construction. |
Key Cases Cited
- Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984) (establishes two-step Chevron framework for agency deference)
- Christopher v. SmithKline Beecham Corp., 132 S. Ct. 2156 (2012) (deferring to agency interpretation of regulations; regulatory deference context)
- Solis v. Washington, 656 F.3d 1079 (9th Cir. 2011) (exemption interpretations narrowly construed against employers)
- Haro v. City of Los Angeles, 745 F.3d 1249 (9th Cir. 2014) (presumption in favor of employees regarding exemptions from FLSA)
- FCC v. Fox Television Stations, Inc., 556 U.S. 502 (2009) (agency may change position if rational; applies to interpretive rules)
- Walton v. Greenbrier Ford, Inc., 370 F.3d 446 (4th Cir. 2004) (rejects broader 'functionally similar' exemption approach)
- Thompson v. J.C. Billion, Inc., 294 P.3d 397 (Mont. 2013) (state court view challenging agency's narrow interpretation)
- Deel Motors, 475 F.2d 1097 (4th Cir. 1973) (early appellate view on exemption scope)