ENCINO MOTORCARS, LLC v. NAVARRO ET AL.
No. 16-1362
SUPREME COURT OF THE UNITED STATES
April 2, 2018
584 U. S. ____ (2018)
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
(Slip Opinion)
Syllabus
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.
Syllabus
ENCINO MOTORCARS, LLC v. NAVARRO ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
Argued January 17, 2018—Decided April 2, 2018
Held: Because service advisors are “salesm[e]n . . . primarily engaged in . . . servicing automobiles,” they are exempt from the FLSA‘s overtime-pay requirement. Pp. 5–11.
(a) A service advisor is obviously a “salesman.” The ordinary meaning of “salesman” is someone who sells goods or services, and service advisors “sell [customers] services for their vehicles,” Encino I, supra, at 6.
(b) Service advisors are also “primarily engaged in . . . servicing automobiles.” “Servicing” can mean either “the action of maintaining or repairing a motor vehicle” or “[t]he action of providing a service.” 15 Oxford English Dictionary 39. Service advisors satisfy both definitions because they are integral to the servicing process. They “mee[t] customers; liste[n] to their concerns about their cars; sugges[t] repair and maintenance services; sel[l] new accessories
(c) The Ninth Circuit invoked the distributive canon—matching “salesman” with “selling” and “partsman [and] mechanic” with “[servicing]“—to conclude that the exemption simply does not apply to “salesm[e]n . . . primarily engaged in . . . servicing automobiles.” But the word “or,” which connects all of the exemption‘s nouns and gerunds, is “almost always disjunctive.” United States v. Woods, 571 U. S. 31, 45. Using “or” to join “selling” and “servicing” thus suggests that the exemption covers a salesman primarily engaged in either activity.
Statutory context supports this reading. First, the distributive canon has the most force when one-to-one matching is present, but here, the statute would require matching some of three nouns with one of two gerunds. Second, the distributive canon has the most force when an ordinary, disjunctive reading is linguistically impossible. But here, “salesman . . . primarily engaged in . . . servicing automobiles” is an apt description of a service advisor. Third, a narrow distributive phrasing is an unnatural fit here because the entire exemption bespeaks breadth, starting with “any” and using the disjunctive “or” three times. Pp. 7–9.
(d) The Ninth Circuit also invoked the principle that exemptions to the FLSA should be construed narrowly. But the Court rejects this principle as a guide to interpreting the FLSA. Because the FLSA gives no textual indication that its exemptions should be construed narrowly, they should be given a fair reading. P. 9.
(e) Finally, the Ninth Circuit‘s reliance on two extraneous sources to support its interpretation—the 1966–1967 Occupational Outlook Handbook and the FLSA‘s legislative history—is unavailing. Pp. 9–11.
845 F. 3d 925, reversed and remanded.
Opinion of the Court
NOTICE: This opinion is subject to formal revision before publication in the preliminary print of the United States Reports. Readers are requested to notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, of any typographical or other formal errors, in order that corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
ENCINO MOTORCARS, LLC, PETITIONER v. HECTOR NAVARRO, ET AL.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
[April 2, 2018]
JUSTICE THOMAS delivered the opinion of the Court.
The Fair Labor Standards Act (FLSA), 52 Stat. 1060, as amended,
I
A
Enacted in 1938, the FLSA requires employers to pay overtime to covered employees who work more than 40 hours in a week.
Congress initially exempted all employees at car dealer-ships from the overtime-pay requirement. See Fair Labor Standards Amendments of 1961, §9, 75 Stat. 73. Congress then narrowed that exemption to cover “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trailers, trucks, farm implements, or aircraft.” Fair Labor Standards Amendments of 1966, §209, 80 Stat. 836. In 1974, Congress enacted the version of the exemption at issue here. It provides that the FLSA‘s overtime-pay requirement does not apply to “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trucks, or farm implements, if he is employed by a nonmanufacturing establishment primarily engaged in the business of selling such vehicles or implements to ultimate purchasers.”
This language has long been understood to cover service advisors. Although the Department of Labor initially interpreted it to exclude them, 35 Fed. Reg. 5896 (1970) (codified at 29 CFR §779.372(c)(4) (1971)), the federal courts rejected that view, see Brennan v. Deel Motors, Inc., 475 F. 2d 1095 (CA5 1973); Brennan v. North Bros. Ford, Inc., 76 CCH LC ¶ 33, 247 (ED Mich. 1975), aff‘d sub nom. Dunlop v. North Bros. Ford, Inc., 529 F. 2d 524 (CA6 1976) (table). After these decisions, the Department issued an opinion letter in 1978, explaining that service advisors are exempt in most cases. See Dept. of Labor, Wage & Hour Div., Opinion Letter No. 1520 (WH–467) (1978), [1978–1981 Transfer Binder] CCH Wages–Hours Administrative Rulings ¶ 31,207. From 1978 to 2011, Congress made no changes to the exemption, despite amending
In 2011, however, the Department reversed course. It issued a rule that interpreted “salesman” to exclude service advisors. 76 Fed. Reg. 18832, 18859 (2011) (codified at 29 CFR §779.372(c)). That regulation prompted this litigation.
B
Petitioner Encino Motorcars, LLC, is a Mercedes-Benz dealership in California. Respondents are current and former service advisors for petitioner. Service advisors “interact with customers and sell them services for their vehicles.” Encino Motorcars, LLC v. Navarro, 579 U. S. ___ (2016) (Encino I) (slip op., at 2). They “mee[t] customers; liste[n] to their concerns about their cars; sugges[t] repair and maintenance services; sel[l] new accessories or replacement parts; recor[d] service orders; follo[w] up with customers as the services are performed (for instance, if new problems are discovered); and explai[n] the repair and maintenance work when customers return for their vehicles.” Ibid.
In 2012, respondents sued petitioner for backpay. Relying on the Department‘s 2011 regulation, respondents alleged that petitioner had violated the FLSA by failing to pay them overtime. Petitioner moved to dismiss, arguing that service advisors are exempt under
We granted certiorari and vacated the Ninth Circuit‘s judgment. We explained that courts cannot defer to the 2011 rule because it is procedurally defective. See Encino I, 579 U. S., at ___ (slip op., at 8–12). Specifically, the regulation undermined significant reliance interests in the automobile industry by changing the treatment of service advisors without a sufficiently reasoned explanation. Id., at ___ (slip op., at 10). But we did not decide whether, without administrative deference, the exemption covers service advisors. Id., at ___ (slip op., at 12). We remanded that issue for the Ninth Circuit to address in the first instance. Ibid.
C
On remand, the Ninth Circuit again held that the exemption does not include service advisors. The Court of Appeals agreed that a service advisor is a “salesman” in a “generic sense,” 845 F. 3d 925, 930 (2017), and is “‘primarily engaged in . . . servicing automobiles’ in a ‘general sense,‘” id., at 931. Nonetheless, it concluded that “Congress did not intend to exempt service advisors.” Id., at 929.
The Ninth Circuit began by noting that the Department‘s 1966–1967 Occupational Outlook Handbook listed 12 job titles in the table of contents that could be found at a car dealership, including “automobile mechanics,” “automobile parts countermen,” “automobile salesmen,” and “automobile service advisors.” Id., at 930. Because the FLSA exemption listed three of these positions, but not service advisors, the Ninth Circuit concluded that service advisors are not exempt. Ibid. The Ninth Circuit also determined that service advisors are not primarily engaged in “servicing” automobiles, which it defined to mean “only those who are actually occupied in the repair and maintenance of cars.” Id., at 931. And the Ninth Circuit further concluded that the exemption does not cover salesmen who are primarily engaged in servicing. Id., at 933. In reaching this conclusion, the Ninth Circuit invoked the distributive canon. See A. Scalia & B. Garner, Reading Law 214 (2012) (“Distributive phrasing applies each expression to its appropriate referent“). It reasoned that “Congress intended the gerunds—selling and servicing—to be distributed to their appropriate subjects—salesman, partsman, and mechanic. A salesman sells; a partsman services; and a mechanic services.” Id., at 934. Finally, the Court of Appeals noted that its interpretation was supported by the principle that
We granted certiorari, 582 U. S. ___ (2017), and now reverse.
II
The FLSA exempts from its overtime-pay requirement “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trucks, or farm implements, if he is employed by a nonmanufacturing establishment primarily engaged in the business of selling such vehicles or implements to ultimate purchasers.”
A
A service advisor is obviously a “salesman.” The term “salesman” is not defined in the statute, so “we give the term its ordinary meaning.” Taniguchi v. Kan Pacific Saipan, Ltd., 566 U. S. 560, 566 (2012). The ordinary meaning of “salesman” is someone who sells goods or services. See 14 Oxford English Dictionary 391 (2d ed. 1989) (“[a] man whose business it is to sell goods or conduct sales“); Random House Dictionary of the English Language 1262 (1966) (“a man who sells goods, services, etc.“). Service advisors do precisely that. As this Court previously explained, service advisors “sell [customers] services for their vehicles.” Encino I, 579 U. S., at ___ (slip op., at 2).
B
Service advisors are also “primarily engaged in . . . servicing automobiles.”
True, service advisors do not spend most of their time physically repairing automobiles. But the statutory language is not so constrained. All agree that partsmen, for example, are “primarily engaged in . . . servicing automobiles.” Brief for Petitioner 40; Brief for Respondents 41–44. But partsmen, like service advisors,
C
The Ninth Circuit concluded that service advisors are not covered because the exemption simply does not apply to “salesm[e]n . . . primarily engaged in . . . servicing automobiles.” The Ninth Circuit invoked the distributive canon to reach this conclusion. Using that canon, it matched “salesman” with “selling” and “partsma[n] [and] mechanic” with “servicing.” We reject this reasoning.
The text of the exemption covers “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trucks, or farm implements.”
Unsurprisingly, statutory context can overcome the ordinary, disjunctive meaning of “or.” The distributive canon, for example, recognizes that sometimes “[w]here a sentence contains several antecedents and several consequents,” courts should “read them distributively and apply the words to the subjects which, by context, they seem most properly to relate.” 2A N. Singer & S. Singer, Sutherland Statutes and Statutory Construction §47:26, p. 448 (rev. 7th ed. 2014).
But here, context favors the ordinary disjunctive meaning of “or” for at least three reasons. First, the distributive canon has the most force when the statute allows for one-to-one matching. But here, the distributive canon would mix and match some of three nouns—“salesman, partsman, or mechanic“—with one of two gerunds—“selling or servicing.”
D
The Ninth Circuit also invoked the principle that exemptions to the FLSA should be construed narrowly. 845 F. 3d, at 935–936. We reject this principle as a useful guidepost for interpreting the FLSA. Because the FLSA gives no “textual indication” that its exemptions should be construed narrowly, “there is no reason to give [them] anything other than a fair (rather than a ‘narrow‘) interpretation.” Scalia, Reading Law, at 363. The narrow-construction principle relies on the flawed premise that the FLSA “‘pursues’ its remedial purpose ‘at all costs.‘” American Express Co. v. Italian Colors Restaurant, 570 U. S. 228, 234 (2013) (quoting Rodriguez v. United States, 480 U. S. 522, 525–526 (1987) (per curiam)); see also Henson v. Santander Consumer USA Inc., 582 U. S. ___ (2017) (slip op., at 9) (“[I]t is quite mistaken to assume that whatever might appear to further the statute‘s primary objective must be the law” (internal quotation marks and alterations omitted)). But the FLSA has over two dozen exemptions in
E
Finally, the Ninth Circuit relied on two extraneous sources to support its interpretation: the Department‘s 1966–1967 Occupational Outlook Handbook and the FLSA‘s legislative history. We find neither persuasive.
1
The Ninth Circuit first relied on the Department‘s 1966–1967 Occupational Outlook Handbook. It identified 12 jobs from the Handbook‘s table of contents that it thought could be found at automobile dealerships. See 845 F. 3d, at 930. The Ninth Circuit then stressed that the exemption aligns with three of those job titles—“[a]utomobile mechanics,” “[a]utomobile parts countermen,” and “[a]utomobile salesmen“—but not “[a]utomobile service advisors.” Ibid.
The Ninth Circuit cited nothing, however, suggesting that the exemption was meant to align with the job titles listed in the Handbook. To the contrary, the exemption applies to “any salesman . . . primarily engaged in selling or servicing automobiles.” It is not limited, like the term in the Handbook, to “automobile salesmen.” And the ordinary meaning of “salesman” plainly includes service advisors.
2
The Ninth Circuit also relied on legislative history to support its interpretation. See id., at 936–939. Specifically, it noted that the legislative history discusses “automobile salesmen, partsmen, and mechanics” but never discusses service advisors. Id., at 939. Although the Ninth Circuit had previously found that same legislative history “inconclusive,” Encino, 780 F. 3d, at 1275, on remand it was “firmly persuaded” that the legislative history demonstrated Congress’ desire to exclude service advisors, 845 F. 3d, at 939.
The Ninth Circuit was right the first time. As we have explained, the best reading of the statute is that service advisors are exempt. Even for those Members of this Court who consider legislative history, silence in the legislative history, “no matter how ‘clanging,‘” cannot defeat the better reading of the text and statutory context. Sedima, S. P. R. L. v. Imrex Co., 473 U. S. 479, 495, n. 13 (1985). If the text is clear, it needs no repetition in the legislative history; and if the text is ambiguous, silence in the legislative history cannot lend any clarity. See Avco Corp. v. Department of Justice, 884 F. 2d 621, 625 (CADC 1989). Even if Congress did not foresee all of the applications of the statute, that is no reason not to give the statutory text a fair reading. See Union Bank v. Wolas, 502 U. S. 151, 158 (1991).
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In sum, we conclude that service advisors are exempt from the overtime-pay requirement of the FLSA because they are “salesm[e]n . . . primarily engaged in . . . servicing automobiles.”
It is so ordered.
GINSBURG, J., dissenting
SUPREME COURT OF THE UNITED STATES
ENCINO MOTORCARS, LLC, PETITIONER v. HECTOR NAVARRO, ET AL.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
[April 2, 2018]
JUSTICE GINSBURG, with whom JUSTICE BREYER, JUSTICE SOTOMAYOR, and JUSTICE KAGAN join, dissenting.
Diverse categories of employees staff automobile dealerships. Of employees so engaged, Congress explicitly exempted from the Fair Labor Standards Act hours requirements only three occupations: salesmen, partsmen, and mechanics. The Court today approves the exemption of a fourth occupation: automobile service advisors. In accord with the judgment of the Court of Appeals for the Ninth Circuit, I would not enlarge the exemption to include service advisors or other occupations outside Congress’ enumeration.
Respondents are service advisors at a Mercedes-Benz automobile dealership in the Los Angeles area. They work regular hours, 7 a.m. to 6 p.m., at least five days per week, on the dealership premises. App. 54. Their weekly minimum is 55 hours. Maximum hours, for workers covered by the Fair Labor Standards Act (FLSA or Act), are 40 per week.
The question presented: Are service advisors exempt from receipt of overtime compensation under
I
In 1961, Congress exempted all automobile-dealership employees from the Act‘s overtime-pay requirements. See
“Where Congress explicitly enumerates certain exceptions . . . , additional exceptions are not to be implied, in the absence of evidence of a contrary legislative intent.” TRW Inc. v. Andrews, 534 U. S. 19, 28 (2001) (internal quotation marks omitted). The Court thus has no warrant to add to the three explicitly exempt categories (salesmen, partsmen, and mechanics) a fourth (service advisors) for which the Legislature did not provide. The reach of today‘s ruling is uncertain, troublingly so: By expansively reading the exemption to encompass all salesmen, partsmen, and mechanics who are “integral to the servicing process,” ante, at 6, the Court risks restoring much of what Congress intended the 1966 amendment to terminate, i.e., the blanket exemption of all dealership employees from overtime-pay requirements.
II
Had the
Petitioner stakes its case on Congress’ addition of the “partsman” job to the exemption. See Reply Brief 6–10. That inclusion, petitioner urges, has a vacuum effect: It draws into the exemption job categories other than the three for which Congress provided, in particular, service advisors. Because partsmen, like service advisors, neither “sell” nor “service” automobiles in the conventional sense, petitioner reasons, Congress must have intended the word “service” to mean something broader than repair and maintenance.
To begin with, petitioner‘s premise is flawed. Unlike service advisors, partsmen “‘get their hands dirty’ by ‘working as a mechanic‘s right-hand man or woman.‘” Encino Motorcars, 579 U. S., at ___, n. 1 (GINSBURG, J., concurring) (slip op., at 1, n. 1) (quoting Brief for Respondents in No. 15–415, p. 11; alterations omitted); see supra, at 2–3 (describing duties of partsmen). As the Solicitor General put it last time this case was before the Court, a mechanic “might be able to obtain the parts to complete a repair without the real-time assistance of a partsman by his side.” Brief for United States as Amicus Curiae in No. 15–415, p. 23. But dividing the “key [repair] tasks . . . between two individuals” only “reinforces” “that both the mechanic and the partsman are . . . involved in repairing (‘servicing‘) the vehicle.” Ibid. Service advisors, in contrast, ”sell . . . services [to customers] for their vehicles,” Encino Motorcars, 579 U. S., at ___ (slip op., at 2) (emphasis added)—services that are later performed by mechanics and partsmen.
Adding partsmen to the exemption, moreover, would be an exceptionally odd way for Congress to have indicated that “servicing” should be given a meaning deviating from its ordinary usage. There is a more straightforward explanation for Congress’ inclusion of partsmen alongside salesmen and mechanics: Common features of the three enumerated jobs make them unsuitable for overtime pay.
Both salesmen and mechanics work irregular hours, including nights and weekends, not uncommonly offsite, rendering time worked not easily tracked.3 As noted in the 1966 Senate floor debate, salesmen “go out at unusual hours, trying to earn commissions.” 112 Cong. Rec. 20504
Congress added “partsman” to the exemption because it believed that job, too, entailed irregular hours. See ibid. This is “especially true,” several Senators emphasized, “in the farm equipment business where farmers, during planting, cultivating and harvesting seasons, may call on their dealers for parts at any time during the day or evening and on weekends.” Ibid. (remarks of Sen. Bayh). See also id., at 20503 (remarks of Sen. Mansfield). In Senator Bayh‘s experience, for instance, a mechanic who “could not find [a] necessary part” after hours might “call the partsman, get him out of bed, and get him to come down to the store.” Id., at 20504. See also id., at 20503 (remarks of Sen. Hruska) (“Are we going to say to the farmer who needs a part . . . on Sunday: You cannot get a spark plug . . . because the partsman is not exempt, but you can have machinery repaired by a mechanic who is exempt[?]“). Although some Senators opposed adding partsmen to the exemption because, as they understood the job‘s demands, partsmen did not work irregular hours, e.g., id., at 20505 (remarks of Sen. Clark), the crux of the debate underscores the exemption‘s rationale.
That rationale has no application here. Unlike salesmen, partsmen, and mechanics, service advisors “wor[k] ordinary, fixed schedules on-site.” Brief for Respondents 47 (citing Handbook, at 316). Respondents, for instance, work regular 11-hour shifts, at all times of the year, for a weekly minimum of 55 hours. See App. 54. Service advisors thus do not implicate the concerns underlying the
I note, furthermore, that limiting the exemption to the three delineated jobs—salesman, partsman, and mechanic—does not leave the phrase “primarily engaged in selling or servicing,”
III
Petitioner contends that “affirming the decision below would disrupt decades of settled expectations” while ex-posing “employers to substantial retroactive liability.” Brief for Petitioner 51. “[M]any dealerships,” petitioner urges, “have offered compensation packages based primarily on sales commissions,” in reliance on court decisions and agency guidance ranking service advisors as exempt. Id., at 51–52. Respondents here, for instance, are compensated on a “pure commission basis.” App. 55. Awarding retroactive overtime pay to employees who were “focused on earning commissions,” not “working a set number of hours,” petitioner argues, would yield an “unjustified windfal[l].” Brief for Petitioner 53.
Petitioner‘s concerns are doubly overstated. As the Court previously acknowledged, see Encino Motorcars, 579 U. S., at ___ (slip op., at 11), the FLSA provides an affirmative defense that explicitly protects regulated parties from retroactive liability for actions taken in good-faith reliance on superseded agency guidance. See
Congress, moreover, has spoken directly to the treatment of commission-based workers. The FLSA exempts from its overtime directives any employee of a “retail or service establishment” who receives more than half of his or her pay on commission, so long as the employee‘s “regular rate of pay” is more than 1½ times the minimum wage.
In crafting the commission-pay exemption, Congress struck a deliberate balance: It exempted higher paid commissioned employees, perhaps in recognition of their potentially irregular hours, see Mechmet v. Four Seasons Hotels, Ltd., 825 F. 2d 1173, 1176–1177 (CA7 1987); cf. supra, at 5–7, but it maintained protection for lower paid employees, to vindicate the Act‘s “principal . . . purpose” of shielding “workers from substandard wages and oppressive working hours,” Barrentine, 450 U. S., at 739.6 By stretching the
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This Court once recognized that the “particularity” of FLSA exemptions “preclude[s] their enlargement by implication.” Addison v. Holly Hill Fruit Products, Inc., 322 U. S. 607, 617 (1944). Employees outside the Act‘s “narrow and specific” exemptions, the Court affirmed, “remain within the Act.” Powell v. United States Cartridge Co., 339 U. S. 497, 517 (1950).7 The Court today, in adding an exemption of its own creation, veers away from that comprehension of the FLSA‘s mission. I would instead resist, as the Ninth Circuit did, diminishment of the Act‘s overtime strictures.