Fixed Ops Journal - May 2016 - (Page 48)
FIXED OPS JOURNAL
Service advisers and
the Supreme Court?
"As a practical matter, it
makes an awful lot of sense to
exempt all of these people
from the overtime rules."
PAUL CLEMENT, dealership attorney
■ Yep. And the justices got schooled in Service Department 101
t's rare for a dealership dispute to
reach the U.S. Supreme Court, and even
rarer for the high court to get a lesson
on how service departments operate.
But that's exactly what happened when the
justices confronted the case of salaried service advisers at Mercedes-Benz of Encino,
near Los Angeles, who claim that federal law
entitles them to overtime pay.
Dealerships are complicated, Philadelphia
lawyer Stephanos Bibas told the court.
"There are at least 20 categories of employees in the service department. There are
dozens of kinds of employees in the sales department, in parts, in used cars, in leasing."
He represents the service advisers.
The legal question facing the Supreme
Court is straightforward: Do the overtime requirements of the Fair Labor Standards Act
cover salaried service advisers, or do they fall
into an exemption for "any salesman, partsman or mechanic primarily engaged in selling or servicing automobiles"?
So think of the April 20 oral arguments in
the case as an hourlong Service Department
101 course for the eight justices - there's
one vacancy - not merely an intellectual
battle over how to interpret the labor law.
What do service advisers do?
That depends on whom you ask. As
dealership lawyer Paul Clement of
Washington told the court,
they're "salespeople principally engaged in the servicing
of automobiles. And it seems
clear to me that service advisers, as their name suggests,
are principally engaged in the
servicing of automobiles.
Roberts: Who looks
at the fan belt?
"Here's the reason that all the people on
the service team - the partsmen, the mechanic and the service advisers - really
need this exemption," Clement continued.
"Because most customers who need service
themselves work pretty regular hours, sort of
9 to 5, Monday through Friday. So the busy
times are what they call the morning rush
and the afternoon discharge for the day. And
then also on Saturday - over 90 percent of
automobile dealerships' service departments are open on Saturdays.
"As a practical matter, it makes an awful lot
of sense to exempt all of these people from
the overtime rules. They're all paid well and
they all have a reason to work, like, about 50,
46 hours a week instead of 40 hours a week,"
But Bibas, the service advisers' attorney,
offered a different take: "Service advisers
don't sell cars. Nor do they service cars,
which requires automotive manual labor.
They merely write up paperwork.
"The service adviser is a customer-facing
role. He's advising the customer, not advising the mechanic. Goes up to the customer,
has a clipboard, records whatever symptoms
the customer says: 'It's making a squealing
noise' or 'It's not driving well.' He's not going
under the hood. He's not taking parts apart.
He's not rendering a final diagnosis on
which the work will be based. He relays that
information back," Bibas said.
Chief Justice John Roberts asked, "If there's
a squealing sound and it might be the fan
belt, you're saying he's not going to open the
hood and look at the fan belt?"
Bibas responded, "He's not going to be
measuring the tension on the fan belt,
touching the fan belt, doing any of that.
That's back in the shop bay."
What training do service advisers get?
"I have a very practical question,"
Justice Sonia Sotomayor told
Clement, the dealership's
lawyer. "Are these sales advisers specially
trained in some way? Do they go to mechanic
Clement answered, "I haven't read anything that's directly on point. My strong suspicion, though, is that there are these kind of
academies that are put together, including
by the National Automobile Dealers Association. And they would get some training in
"Because, to be candid
with you, it scares me to
think that every time I
take my car to a dealer
that a nonmechanic is
telling me what's wrong
And Clement respond- Kennedy:
ed, "There are real costs to Experts at
the dealership if the origi- repeat trips
nal diagnostic is wrong
and they end up ordering the wrong part."
That prompted Justice Anthony Kennedy to
quip, "And some of us here are experts in having to go to auto agencies and coming back."
There was laughter in the courtroom.
How do dealerships compensate service advisers?
Asked by Justice Ruth Bader Ginsburg what
percent of service advisers are on commission
rather than salary, Clement said, "I don't have
a specific statistical breakdown, but I'm reliably informed that it's a significant number.
But there are significant numbers of individuals who are primarily compensated for salary,
and they like it that way."
That led Justice Stephen Breyer to wonder
about the rationale for denying overtime to
salaried service advisers. "Do they work regular hours?" he asked.
"I take it if they work regular hours and if
they aren't paid on commission, why wouldn't
SEE SUPREME, PAGE 49
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