Argument analysis: Justices parse Fair Labor Standards Act protections for service personnel at car dealerships

Encino Motorcars v Navarro was up for a repeat performance yesterday, as the justices heard argument for the second time on the question whether the Fair Labor Standards Act protects the service advisors who greet you when you take your car to a dealership for service. The last time they heard the case, almost two years ago, the justices decided that the 2011 Department of Labor regulation bringing those advisors under the FLSA was invalid – criticizing the department for an utter failure to explain its decision to depart from a longstanding status quo under which the advisors were not entitled to FLSA protections.

The 2016 opinion did not, however, offer any guidance on the ultimate question of coverage, which is back before the justices again this week. Because the justices decided last time that the department’s regulation is irrelevant, all of the discussion yesterday focused on the language of the statute, which exempts “any salesman, partsman, or mechanic” who is “primarily engaged in selling or servicing automobiles.”

In general, the discussion revealed a group of justices no closer to a resolution of the problem now than they were two years ago. Four of the justices (Justices Stephen Breyer, Ruth Bader Ginsburg, Elena Kagan and Sonia Sotomayor) seem inclined to extend FLSA coverage to the service advisors. In general, that group of justices embraced the idea that the best way to read the statute is to match the job descriptions in the first clause separately with the verbs at the end – so it would apply to any salesman selling automobiles or any partsman or mechanic servicing automobiles, but not (implicitly) to any salesman servicing automobiles. As Breyer put it (ignoring the references to partsmen), “[y]ou have two words over here that are verbs, two words over here that are nouns. The first seems to go with the first, the second with the second.” Under that reading, the service advisors plainly would be excluded from the exemption because whatever they are doing, they are not primarily engaged in selling automobiles.

Even without reading the statute that way, those justices still seemed doubtful about bringing the service advisors under the exemption, because it is hard to see them as “primarily engaged in … servicing automobiles.” Kagan summarized that perspective:

When I think of these three categories of workers – service providers, partsmen, mechanics – to coin a couple of silly kinds of words, a service advisor is customer-facing. … [T]he primary job is to deal with customers, to sell them things, to liaison with them, to make sure they’re happy. Mechanics and also partsmen are car-facing. … [T]heir job is to do stuff with the car. … [T]heir focus is on the automobile, whereas the service provider’s focus is on the customer. That seems to me a pretty big divide, suggesting that the service providers are really, you know, salesmen, not servicers.

In the same vein, Ginsburg queried why the justices should “stretch service advisor to come within the mechanic who’s actually servicing when we know that the service advisor doesn’t even possess the skills to be engaged in servicing.”

On the other side of the case, Chief Justice John Roberts seemed deeply grounded in his own experience of car dealers, which seemed to leave him convinced that service advisors can be viewed as salesmen engaged in the servicing of automobiles. For example, at one point he commented that “they do look under the hood sometimes, right? You bring the car, you know, it’s making this noise, they go out and at least listen to the noise, and sometimes they can say right away.” At another, he discussed what he viewed as a “common understanding” that “if you over several years dropped your car off whenever you’re supposed to or whenever it’s broken and you talk to Fred about getting it fixed, … you would say ‘my service guy is Fred.’” In his view, it would be a routine use of language to “think of Fred as the person who services your car.”

From the argument alone, you would think that none of the other justices took the same view as Roberts, but it seems almost certain that Justices Clarence Thomas and Samuel Alito will be on that side of the case.  Though neither said a word yesterday, both dissented from Justice Anthony Kennedy’s opinion last time around, taking the view that the statute unambiguously excludes service advisors from FLSA protections.

So the decision is likely to come down to the views of Kennedy and Justice Neil Gorsuch.  For his part, Kennedy seemed torn, asking pointed questions of advocates on both sides of the case. Gorsuch, somewhat uncharacteristically, shed almost no light on his views, posing two simple questions about the precise language of the statute and listening without comment to the responses.

The argument also revealed an apparent frustration among some of the justices with the Department of Labor’s absence. Kagan pointedly noted that “the Solicitor General is not here in a case in which one would expect the government to be here,” and Breyer commented that “what we’re doing is we’re trying to parse … a fairly technical statute involving one of 40,000 different kinds of workers as part of a very general statute. Now, that to me rings a bell that if this isn’t a question for an agency, what is?” This is of course not the first case of the term in which the Trump administration’s labor policy has left the justices adrift. It comes on the heels of the October spectacle in Epic Systems v Lewis, in which the solicitor general appeared on one side of a case arguing in opposition to the National Labor Relations Board on the other. To be sure, every change of party in the presidency brings some disarray to the government’s litigation strategy. This transition, though, seems to be proceeding less smoothly than most.

Given the high likelihood of a divided bench, it would be unduly optimistic to expect a decision in this case any earlier than April.