Hector Navarro v. Encino Motorcars
845 F.3d 925
9th Cir.2017Background
- Encino Motorcars (dealer) employed plaintiffs as service advisors who greet customers, document concerns, suggest/estimate repairs and follow up during repairs.
- Plaintiffs sued under the FLSA claiming unpaid overtime; district court dismissed, Ninth Circuit reversed, relying on a 2011 DOL regulation exempting service advisors.
- The Supreme Court vacated and remanded, instructing the Ninth Circuit to interpret § 213(b)(10)(A) without Chevron deference to the 2011 regulation.
- § 213(b)(10)(A) exempts “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles” from overtime at dealerships; statutory language originates in 1966 (with 1974 amendment form).
- The Ninth Circuit interpreted the 1966/1974 text, contemporaneous dictionaries and the 1966–1970 Occupational Outlook Handbook and legislative history, concluding service advisors neither sell cars nor primarily perform maintenance/repairs.
- Court reversed district court: service advisors are not covered by the § 213(b)(10)(A) exemption and thus are entitled to pursue overtime claims; state-law claims remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 213(b)(10)(A) exempts service advisors from FLSA overtime | Navarro: service advisors are functionally salesmen or otherwise fall within exemption because they sell services integral to servicing cars | Encino: exemption covers all employees integral to selling/servicing (broad reading); service advisors are "salesmen" or otherwise exempt | Held: No — service advisors are not "salesman[s] primarily engaged in selling automobiles" nor "primarily engaged in servicing automobiles;" exemption does not cover them |
| Proper textual interpretation approach | Rely on ordinary, contemporary meaning (1966) and structure; de novo review on remand | Urged deference to agency/regulation or broad distributive reading of the listed occupations | Held: Court interprets statute de novo, reading gerunds distributively (salesman→selling; partsman/mechanic→servicing) and construes FLSA exemptions narrowly |
| Role of agency (DOL) interpretations/regulation | Plaintiffs relied on agency practice favoring exemption for service advisors | Defendant relied on 2011 DOL regulation excluding service advisors (and argued agency guidance should be given weight) | Held: Court assumed no Chevron deference per Supreme Court remand and found statutory text and history dispositive; outcome unaffected by deference questions |
| Use of legislative history and canons (narrow construction) | Navarro: legislative history and silence indicate service advisors not intended to be exempt | Encino: argued for broader plain-text reading; suggested "primarily involved in supplying maintenance" could include advisors | Held: Legislative history shows focus on salesmen, partsmen, mechanics; with narrow-construction canon court rejects broad reading that would include service advisors |
Key Cases Cited
- Encino Motorcars, LLC v. Navarro, 136 S. Ct. 2117 (2016) (Supreme Court remand directing appellate court to interpret § 213(b)(10)(A) without Chevron deference)
- Navarro v. Encino Motorcars, LLC, 780 F.3d 1267 (9th Cir. 2015) (Ninth Circuit’s prior decision deferring to DOL regulation)
- Chevron U.S.A. v. Nat. Res. Def. Council, 467 U.S. 837 (1984) (agency deference framework discussed and limited by Supreme Court remand)
- Perrin v. United States, 444 U.S. 37 (1979) (use of contemporaneous meaning for statutory interpretation)
- A.H. Phillips, Inc. v. Walling, 324 U.S. 490 (1945) (FLSA exemptions must be "plainly and unmistakably" applied)
- Arnold v. Ben Kanowsky, Inc., 361 U.S. 388 (1960) (FLSA exemptions construed narrowly)
- Mitchell v. Kentucky Fin. Co., 359 U.S. 290 (1959) (narrow construction of FLSA exemptions)
- Taniguchi v. Kan Pac. Saipan, Ltd., 132 S. Ct. 1997 (2012) (consult contemporaneous dictionaries and sources to determine ordinary meaning)