Amicus Curiae Brief — Encino Motorcars, LLC v. Navarro, 136 S. Ct. 890 (2016) (No. 15-415)

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APR - 6 2016

o. 15-415 OFFICE OF THE CLERK

————

In the Supreme Court of the United States

ENCINO MoTorCARS, LLC, PETITIONER

HECTOR NAVARRO, ET AL.

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF FOR THE UNITED STATES

AS AMICUS CURIAE SUPPORTING RESPONDENT

M. PATRICIA SMITH

Solicitor of Labor

JENNIFER S. BRAND

Associate Solicitor

PAUL L. FRIEDEN

Counsel for Appellate

Litigation

MELISSA A. MURPHY

LAURA M. MOSKOWITZ

Senior Attorneys

Department of Labor

Washington, D.C. 20210

DONALD B. VERRILLI, JR.

Solicitor General

Counsel of Record

EDWIN S. KNEEDLER

Deputy Solicitor General

ANTHONY A. YANG

Assistant to the Solicitor

General

Department of Justice

Washington, D.C. 20530-0001

SupremeCtBriefs@ usdoj.gov

(202) 514-2217

QUESTION PRESENTED

Whether “service advisors” at automobile dealer-

ships are exempt under 29 U.S.C. 213(b)(10)(A) from

the overtime-pay requirements of the Fair Labor

Standards Act.

(I)

TABLE OF CONTENTS

Page

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Argument:

Section 213(b)(10)(A) does not exempt “service advisors”

at automobile dealerships from the FLSA’s overtime-

OT CO ia sscccstnvrcssscstcicscnmecsntnvsiinianiaishaanpiaiaiannis 14

A. Section 213(b)(10)(A), while not unambiguous, is

best read not to exempt service advisors.................... 14

1. Section 213(b)(10)(A)’s text and statutory

context are best read as using distributive

phrasing to exempt a “salesman” only when

he is primarily engaged in “selling * * *

CTI” ccirssacrsresscsccensiencemasiiniasatuidronmabemiansinal 15

a. Distributive phrasing properly links words

in a series only to their appropriate ref-

GIRO ccccuscctisusiccnstuincvemussensstusssstistiausansmeninisans 15

b. Section 213(b)(10)’s text reflects the use of

distributive phrasing ...............scssssssessssereeesees 19

2. Section 213(b)(10)’s legislative history indicates

that Congress understood the exemption to apply

only to those salesmen who sell vehicles .............. 24

3. There is no occasion in this case to rely on the

principle that FLSA exemptions are narrowly

B. The Department’s notice-and-comment regulations,

which reasonably implement Section 213(b)(10)(A),

are entitled to Chevron deference................c0cccce0eeeeeees 29

1. The Department’s regulations are reviewed

for reasonableness under Chevrom...............0000000-- 30

2. The Department sufficiently justified its 2011

regulations, which do not impose retroactive

(III)

Table of Contents—Continued: Page

3. Petitioner’s claims of far-reaching consequences

SE 34

EE 36

Appendix — Statutory and regulatory provisions................. la

TABLE OF AUTHORITIES

Cases:

Arnold v. Ben Kanowsky, Inc., 361 U.S. 388 (1960).......... 27

Brennan v. Deel Motors, Inc., 475 F.2d 1095 (5th

SESE RSE 5

Brooklyn Sav. Bank v. O'Neil, 324 U.S. 697 (1945)........ 1

Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837

ESTEE Aenea 10, 14, 28, 29, 30

Christopher v. SmithKline Beecham Corp.,

I 27

City of Arlington v. FCC, 133 8. Ct. 1863 (2013)................ 30

City of Edmonds v. Oxford House, Inc., 514 U.S. 725

TE a 27

Commissioner v. Clark, 489 U.S. 726 (1989) «0.0... 27

Dunlop v. North Bros. Ford, Inc., 529 F.2d 524

ET 5

FCC v. Fox Television Stations, Inc., 556 U.S. 502

EE 31

Long Island Care at Home, Ltd. v. Coke, 551 U.S

attache eesbaaenicincctenemminaeneneneannenscceaseusees 31

Loughrin v. United States, 134 S. Ct. 2384 (2014)............. 15

Maracich v. Spears, 133 S. Ct. 2191 (2013)...........0ceeeee 27

Mitchell v. Kentucky Fin. Co., 359 U.S. 290 (1959)........... 27

National Cable & Telecomms. Ass'n v. Brand X

Internet Servs., 545 U.S. 967 (2005)........cccceccesereeeeseseesenees 28

NLRB v. Bell Aerospace Co., 416 U.S. 267 (1974) ............. 32

Cases—Continued: Page

Powell v. United States Cartridge Co., 339 U.S. 497

Sri iaiicsciccicsisiesitiahieniiiasiiiassatidestiniginhassibeatiiendininiabautehiinpanteliminaiiiis 27

Sandifer v. United States Steel Corp., 134 S. Ct. 870

ST iccteinisiesceniintaiinnitiinichnsamaailapdeiiensinameiliahaet Lain atedediganiinmtnesiinit 27

Smiley v. Citibank, N.A., 517 U.S. 735 (1996) .............00-+ 31

United States v. Mead Corp., 533 U.S. 218

ac 28, 30, 31

United States v. Pennsylvania Indus. Chem. Corp.,

iia eeesiciitinienssinninitiaiiinistsibideiianiiniciesinsdinenengniss 32

United States v. Simms, 5 U.S. (1 Cranch) 252

NRE EES Seems STE oe 18, 19

Walton v. Greenbrier Ford, Inc., 370 F.3d 446

I: I cesictentesnncintniedrenntanincemaiapaianiogdmnenaiansiesmnabiiiis 6

Statutes and regulations:

Continuing Appropriations Act of 2014, Pub. L. No.

113-46, Div. A, § 101(a)(6), 127 Stat. 558 «0... 33

Continuing Appropriations Resolution, 2013,

Pub. L. No. 112-175, § 101(a)(8), 126 Stat. 1313 .............. 33

Department of Labor Appropriations Act of 2012,

Pub. L. No. 112-74, Div. F, Tit. I, § 113, 125 Stat.

RL PPESTELLELI SS DCIS A Pane =o RSP ESE re 33

Department of Labor Appropriations Act of 2014,

Pub. L. No. 113-76, Div. H, Tit. 1, 128 Stat. 347 .............. 33

Fair Labor Standards Act of 1938, 29 U.S.C. 201

GB GID, cncneressasanestencescavcosecensesnenapneestnaracsemeusenentteninnssetanense l

UT coined iennidiainhdiueteamenainuanenide 1

nT saleeimalanateliaeeedsiimapiesneneiinel 2

a ceeeanlanabaniuadis 13, 34

Se IG sseesaeisneamuasieasenianslisidnnamciniaaeisa 1

I aeaileeeinddidieineiiieeieaiiatsioen l

RS 8, l

Statutes and regulations—Continued: Page

Se ccnnecccccniscienisnrannisninnsinnseusaseaiinians 2

MB 3,4

le I aici tctinccniniensenianinintinnenaienl passim

EE passim

I ls I ctrrserninsenttcanseentnnsiincitcnensnnnnes passim

Fair Labor Standards Amendments of 1961,

Pub. L. No. 87-30, § 9, 75 Stat. 73 ...........cccceeeecceeesrereees 2

Fair Labor Standards Amendments of 1966,

Pub. L. No. 89-601, 80 Stat. 830:

REE eee ao enn Poe 3

REESE aT Es errr neces Nene eee er 3

alain 31

Fair Labor Standards Amendments of 1974,

Pub. L. No. 93-259, 88 Stat. 55:

ge EE Sa ane aoe ae ee ree rereP 4, 20

III, Wicutnerinscsesnenseniiienininiiiaissensinenbinneninmmeiamnneind 30

Full-Year Continuing Appropriations Act, 2013, Pub.

L. No. 113-6, Div. F, Tit. I, § 1101(a)(4), 127 Stat.

CTs sieiicaticicittentietiteihi ieee etic ines ed aahidieaienitangii 33

J. Res. of Jan. 14, 2014, Pub. L. No. 113-73,

EEE rae eee OE Re 33

Portal-to-Portal Act of 1947, 29 U.S.C. 251 et seq.............. 32

RSE SS aerreer ae aera nee oe 13, 32

TT ss nindinrinicetemanentiinectniesinitendinpiaiiaabiiial 32

es Se crtiinicicterintincennsinienctcssisintuitniaiidiiittdmneitiaieamaetiitis 35

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eit eirstnicciseniicnnnenienteenitesiiiivaiebaiiiniaiaieh 18

creel aaa eiaal 16

Ra SRE RECN erence aed See oe 18

ee 18

A, Ga ccrretentcenncnntticemnnnsnrnnmmtaniniiannats 18

Vil

Statutes and regulations—Continued: Page

REET E TEU aire soe On CON eT NC ae 18

EERE PR ER RE Re et naam keene ek 18

29 C.F.R.:

Pt. 779:

RESALE erosion nace 6

ey Fy GIG Ol Paccrnnnccvenscecessnstnctemsstornemmmnenions 4

aici acai emniene 10, 32

Section 779.372(eK(1) (1971) .........0c..ersercceessessseseees 4, 22

Section TIPBTMEM1) ....cccccccececercsecssessssereee 7, 14, 23, 29

is easnidaeesalianaael 23

Section 779.372(c)(4) (1971) .......c-cccescecsceeecereeeeeeees 4,7

Pt. 790:

IN I aces il acne ialretnaiainaaineadiadl 32

Miscellaneous:

Kenneth A. Adams & Alan S. Kaye, Revisiting the

Ambiguity of “And” and “Or” in Legal Drafting,

80 St. John’s L. Rev. 1167 (2006)...............cccsssseseseesneeseees 16

106 Cong. Rec. (1960):

i, Tinted aiceriassellbesasnnescsisuitctaimetesnnesttiiitiaasinoapenisiimaiiiiaioniamphiannns 35

CTE ainchnitnndidemsienensntinnacusnamnennpaiimamnineis 35

112 Comm, Roe. SBBD6 (1966) .....20.0cerccerecsveceseccesecosessesessesees 25

ls Be I I Rinniiciinjunivccccnnecenienssainientioten 21

120 Cong. Rec. (1974)

iis Tee eicicineehincusscancstintagihiehinsvntetincanesiiaeiniamsstinatinibatianeniaieniniibials 20

Ii Sara vaceecsticanihtepeinaicipiensniectsiaheealiieabancaiendiatiiaidanmianiidicagtiameds 20

is Hart incéssnhuesiastneiieeubsdninanaienitesnienpsietniaebaliadiiaiaintantaisaimuiesdaniadels 21

OS ___ 21

i TE rinneinsosensptaneeannsunatnicnnmpestinsssualiatasdsendeatimaidanennetii 21

VIII

Miscellaneous—Continued: Page

Fortunatus Dwarris, A General Treatise on Statutes

Oren: MINIT tisstieesiinicteaseasnlinsisepiunidietabisinaiaiaiiiesinasiieaniaiaidaneennintaes 17

Fair Labor Standards Amendments of 1971: Hear-

ings on S. 1861 and S. 2259 Before the Subcomm.

on Labor of the Senate Comm. on Labor and Pub-

lic Welfare, 92d Cong., Ist Sess. (1971) ............ccccceeseeseees 26

35 Fed. Reg. 5856 (Apr. 9, 1970) ........-cccesse-sseesseesseessveesveesneen 4

73 Fed. Reg. (July 28, 2008):

i ci sistisatiedictee enianicennstainienieemnietinensnainnnisinamensianin 7, 31

i eunianiaiieivinioninel 7

ES meee 31

REESE SAG ens nS DRIED SETA REN 7

76 Fed. Reg. (Apr. 5, 2011):

Oi na esdidihieinaniehihessinenstamsiensscinieisbsisatinenmaniimiantoncseicenenenien 7, 33

i, Bee iicicindeehseeensencanniincannaiscbtnninianniapesnimgiasiti 7

idle iaicicnetiaintiaaninltianleniendoomeanisilnbiiinets 7, 29, 31, 33

EE ciiesinnintracinsniasinnnenisnininlasteteemnninnacnnslonsiionsiitiaie 7

R.N. Graham, In Defense of Maxims, 22 Statute L.

I Se ccthateictecaiiattininpnacnniteinvinsinapiainsinintaianiaviestien 17, 18

H.R. 7935, 938d Cong., Ist Sess. (1973)...........:0csesseceseseees 21

H.R. 12435, 93d Cong., 2d Sess. § 14 (1974)... 20, 21

H.R. Conf. Rep. No. 953, 98d Cong., 2d Sess. (1974)......... 21

H.R. Rep. No. 913, 98d Cong., 2d Sess. (1974) ......0...0+-- 4, 21

Minimum Wage-Hour Amendments, 1965: Hear-

ings on H.R. 8259 Before the General Subcomm.

on Labor of the House Comm. on Education and

Labor, 89th Cong., Ist Sess. Pt. 1 (1965).................... 23, 25

Francis J. McCaffrey, Statutory Construction

Miscellaneous—Continued: Page

NADA Press Release, Howse Appropriations Sub-

committee Preserves Service Advisors Overtime

Exemption (July 18, 2012), http:/Awww.

nadafrontpage.com/Service_Advisors_Overtime_

SEES LE A EO 33

S. 2747, 93d Cong., 2d Sess. (1974) ......cccccccecccsecececocsseeseesees 21

Antonin Scalia & Bryan A. Garner, Reading Law:

The Interpretation of Legal Texts (2012) ......cccccecc000.. 17, 18

U.S. Dep’t of Labor:

Wage & Hour Div., Field Operations Handbook

(Oct. 20, 1987), available at 1978 WL 51403.............. 6

Wage & Hour Div., Opinion Letter WH-467

SSE ER are ee 6

Webster's Third New International Dictionary

SP eeiia icitciehiimiiaiveniidiiaciieslieiniedidaata ici as 22, 24

Jn the Supreme Court of the Anited States

No. 15-415

ENCINO MOTORCARS, LLC, PETITIONER

Vv.

HECTOR NAVARRO, ET AL.

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF FOR THE UNITED STATES

AS AMICUS CURIAE SUPPORTING RESPONDENT

INTEREST OF THE UNITED STATES

This case presents the question whether service

advisors at automobile dealerships are exempt under

29 U.S.C. 213(b)(10) from the overtime-pay require-

ments of the Fair Labor Standards Act of 1938

(FLSA), 29 U.S.C. 201 et seg. The United States has a

significant interest in the resolution of that question

because the Department of Labor (Department) is

responsible for administering and enforcing the

FLSA’s minimum-wage and overtime-pay provisions.

29 U.S.C. 204, 211(a), 216(c), 217.

STATEMENT

1. Congress enacted the Fair Labor Standards Act

of 1938, 29 U.S.C. 201 et seq., to protect workers by

establishing federal minimum-wage and overtime

guarantees. See Brooklyn Sav. Bank v. O’Neil, 324

(1)

U.S. 697, 706-707 & n.18 (1945); see also 29 U.S.C. 206

(minimum wage), 207 (overtime pay). The FLSA,

however, exempts from its overtime requirements

“any salesman, partsman, or mechanic primarily en-

gaged in selling or servicing automobiles, trucks, or

farm implements” if the salesman, partsman, or me-

chanic is employed by a retail dealership primarily

engaged in selling such vehicles or implements. 29

U.S.C. 213(b)(10)(A). The question presented is

whether such “service advisors” fall outside Section

213(b)(10)(A)’s overtime exemption because they are

not salesmen primarily engaged in “selling * * *

automobiles” (as the government and respondents

contend), or whether “service advisors” qualify for

exemption as “salesmen” primarily engaged in “ser-

vicing automobiles” (as petitioner contends, see Pet.

Br. 18, 23).

a. Section 213(b)(10) took its current form in 1974

after evolving as part of a series of amendments to the

FLSA. In 1961, Congress enacted an exemption from

the Act’s minimum-wage and overtime requirements

for “any employee of a retail or service establishment

which is primarily engaged in the business of selling

automobiles, trucks, or farm implements.” Fair Labor

Standards Amendments of 1961, Pub. L. No. 87-30,

§ 9, 75 Stat. 73 (enacting 29 U.S.C. 213(a)(19) (1964)

(repealed 1966)). After just four years, however,

Congress considered legislation to repeal that exemp-

tion. See Minimum Wage-Hour Amendments, 1965:

Hearings on H.R. 8259 Before the General Subcomm.

on Labor of the House Comm. on Education and

Labor, 89th Cong., lst Sess. Pt. 1, at 5 (1965) (1965

House Hearing) (reproducing H.R. 8259 § 305).

The National Automobile Dealers Association

(NADA) opposed repealing the exemption. 1965

House Hearing 366, 369. In addition, NADA request-

ed that Congress clarify the state of the then-existing

law by enacting an overtime exemption for a particu-

lar subset of its members’ employees, namely, any

“automobile salesman or mechanic [employed] by an

establishment primarily engaged in the business of

selling automobiles or trucks.” /d. at 369. With re-

spect to salesmen, NADA’s representative testified

that the “automobile salesmen” who would be exempt

were “extremely well-paid employees” who did not

need overtime protection, and that it would be “prac-

tically impossible” to “keep accurate records of the

time [a salesman] spends working” because “{a]

Salesman * * * is actually selling, or trying to sell,

every place he goes where he is in contact with the

public” and therefore “spends a substantial number of

hours performing his duties away from the dealer’s

place of business.” Jd. at 368-369; see id. at 372.

In 1966, Congress repealed the FLSA’s automobile

dealership exemption. Fair Labor Standards Amend-

ments of 1966, Pub. L. No. 89-601, § 209(a), 80 Stat.

836 (repealing 29 U.S.C. 213(a)(19)). Congress, how-

ever, accommodated NADA’s request for an overtime

exemption by enacting an exemption for:

(10) any salesman, partsman, or mechanic pri-

marily engaged in selling or servicing automobiles,

trailers, trucks, farm implements, or aircraft if em-

ployed by a nonmanufacturing establishment pri-

marily engaged in the business of selling such vehi-

cles to ultimate purchasers.

Id. § 209(b), 80 Stat. 836 (29 U.S.C. 213(b)(10) (1970)).

In 1970, the Administrator of the Department’s

Wage and Hour Division (Administrator) issued an

Interpretive Bulletin addressing the 1966 amend-

ments. 35 Fed. Reg. 5856 (Apr. 9, 1970). As pertinent

here, the Administrator addressed the scope of Sec-

tion 213(b)(10) by construing the terms “salesman,”

“partsman,” and “mechanic.” 29 C.F.R. 779.372(c)

(1971). A “salesman,” the bulletin explained, “is an

employee who is employed for the purpose of and is

primarily engaged in making sales or obtaining orders

or contracts for sale of the vehicle or farm imple-

ments” sold by his employer. 29 C.F.R. 779.372(c)(1)

(1971). The bulletin also stated that “[e)mployees

variously described as service manager, service writ-

er, service advisor, or service salesman who are not

themselves primarily engaged in the work of a sales-

man, partsman, or mechanic as described [in the bul-

letin] are not exempt under section [2]13(b)(10).” 29

C.F .R. 779.372(c)(4) (1971).

In 1974, following the Department’s Interpretive

Bulletin, Congress revisited Section 213(b)(10) both

(1) to repeal “[t]he overtime exemption for partsmen

and mechanics” in establishments “selling aircraft and

trailers,” and (2) to add an exemption for “salesmen”

in establishments “selling boats.” H.R. Rep. No. 913,

93d Cong., 2d Sess. 47 (1974); see id. at 4, 13.

Rather than reenacting a single provision address-

ing all exempt “salesmen” at automobile, truck, farm-

implement, trailer, boat, or aircraft dealerships, how-

ever, Congress enacted two parallel provisions within

Section 213(b)(10). See Fair Labor Standards

Amendments of 1974, Pub. L. No. 93-259, § 14, 88

Stat. 65. One exempts any “salesman, partsman, or

mechanic” primarily engaged in “selling or servicing”

automobiles, trucks, or farm implements. 29 U.S.C.

213(b)(10)(A). The other exempts “any salesman

primarily engaged in selling trailers, boats, or air-

craft.” 29 U.S.C. 213(b)(10)(B). This latter provision

omits any reference to “partsmen or mechanics” or to

“servicing” such vehicles. The overtime exemption in

Section 213(b)(10) thus now exempts:

(10)(A) any salesman, partsman, or mechanic

primarily engaged in selling or servicing automo-

biles, 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; or

(B) any salesman primarily engaged in selling

trailers, boats, or aircraft, trucks, or farm imple-

ments, if he is employed by a nonmanufacturing es-

tablishment primarily engaged in the business of

selling trailers, boats, or aircraft to ultimate pur-

chasers.

29 U.S.C. 213(b)(10).

b. Between 1978 and 2011, the Department did not

enforce Section 213(b)(10) consistent with its 1970

Interpretive Bulletin concerning service advisors. By

1978, two courts of appeals—one in a precedential

opinion and the other in a nonprecedential disposi-

tion—disagreed with the Department, holding that

Section 213(b)(10) exempts “service advisors” from

the FLSA’s overtime-pay requirements. Brennan v.

Deel Motors, Inc., 475 F.2d 1095, 1098 & n.3 (5th Cir.

1973) (explaining that Section 213(b)(10) “is not en-

tirely clear” and that “the issue here is a close one”);

Dunlop v. North Bros. Ford, Inc., 529 F.2d 524 (6th

Cir. 1976) (Tbl.) (unpublished, one-word disposition).

In 1978, the Administrator issued an opinion letter

stating that Section 213(b)(10)(A)’s exemption could

extend to a “service advisor” because a service advisor

is “engaged in selling activities” if his “service sales

[are not sales] for warranty work” performed under a

warranty previously purchased by the customer.

Wage & Hour Div., U.S. Dep’t of Labor, Opinion Let-

ter WH-467 (July 28, 1978), available at 1978 WL

51403. The Administrator noted that his position was

“a change from the position set forth in section

779.372(c)(4) of our [1970] Interpretive Bulletin.”

Ibid.

In 1987, the Wage and Hour Division revised its

Field Operations Handbook (FOH), which provides

internal enforcement policy for the Department’s

FLSA investigations, to address “service advisors”

and similarly titled employees. The revision stated

that because the “Fifth and Sixth Circuits” and “two

district courts” had concluded that service advisors

are exempt under Section 213(b)(10), the Wage and

Hour Division “will no longer deny the [overtime]

exemption for such employees.” Wage & Hour Div.,

U.S. Dep’t of Labor, Field Operations Handbook

§ 24L04(k) (Oct. 20, 1987). “This policy,” the revision

stated, “represents a change from the position in

{Interpretive Bulletin] 779.372(c)(4), which will be

revised as soon as is practicable.” /bid.

In 2004, the Fourth Circuit issued the second prec-

edential decision by a court of appeals holding service

advisors exempt under Section 213(b)(10)(A). See

Walton v. Greenbrier Ford, Inc., 370 F.3d 446 (2004).

ec. In 2008, the Department issued a notice of pro-

posed rulemaking proposing, inter alia, to revise 29

C.F.R. 779.372 to state that “service advisors” are

exempt under Section 913(b)(10)(A). See 73 Fed. Reg.

43,654, 43,658-43,659, 43,671 (July 28, 2008).

In 2011, following public comment on the proposal,

the Department issued a final rule readopting its 1970

understanding of Section 213(b)(10) and repromulgat-

ing its regulatory interpretation of “salesman,”

“partsman,” and “mechanic” with minor revisions. 76

Fed. Reg. 18,832, 18,837-18,838, 18,858-18,859 (Apr. 5,

2011). The Department agreed with the conclusion

that Section 213(b)(10)(A) “requires an employee to

either primarily service the vehicle or ‘sell’ the vehi-

cle—not sell the service of the vehicle.” /d. at 18,838.

The Department accordingly determined that the

provision exempts only “salesmen who sell vehicles

and partsmen and mechanics who service vehicles”

and “does not” exempt “service managers, service

writers, service advisors, OF service salesmen” who

sell servicing for such vehicles. Ibid.

The 2011 regulation provides that, inter alia, for

purposes of both Section 213(b)(10)(A) and (B), “a

salesman is an employee who is employed for the

purpose of and is primarily engaged in making sales

or obtaining orders or contracts for sale of the auto-

mobiles, [other vehicles], or farm implements” that

the establishment employing him is primarily engaged

in selling. 29 C.F.R. 779.372(c)(1). The 2011 regula-

tion omits former Section 779.372(c)(4), which had

separately addressed the non-exempt status of “ser-

vice advisors.”

9. Petitioner owns 4 Mercedes Benz dealership for

which respondents currently or previously worked as

“Service Advisors.” J.-A. 39 Petitioner employed

service advisors, including respondents, in its “service

center” to “meet and greet Mercedez Benz owners as

they enter the service area”; evaluate each owner's

“service and/or repair needs”; “solicit and sug-

gest|]"service work for the vehicle; and “write up an

estimate for the repairs and services” for the owner,

at which point the vehicle is “taken to the mechanics

at [the dealership] for repair and maintenance.” J.A.

39-40. Service advisors may call the owner while the

vehicle is with a mechanic to “solicit and suggest”

additional service work. J.A. 40.

Petitioner requires service advisors to work from

7 a.m. to 6 p.m. at least five days a week, during which

time the service advisors must “remain at their ser-

vice posts” and be “on call” during any “meal or rest

break[s].” J.A. 39. Petitioner pays service advisors

on a pure commission basis, calculated according to

the amount of service work they sell. J.A. 40-41.

3. In September 2012, respondents filed this action

alleging, as relevant here, that petitioner failed to pay

them overtime wages required by the FLSA. J.A. 42-

43, 48, 55. The district court dismissed respondents’

FLSA claims and declined to exercise jurisdiction

over their state-law claims. Pet. App. 22-32. The

court concluded that Section 213(b)(10)(A) is ambigu-

ous but declined to accord Chevron deference to the

Department’s 2011 regulations. /d. at 25-29. The

cour’ held that service advisors are engaged in the

“‘selling and servicing’ of automobiles” like “salesmen

and mechanics” and that the Department’s contrary

conclusion was unreasonable. /d. at 29.

4. The court of appeals reversed in relevant part

and remanded. Pet. App. 1-19.

First, like the district court, the court of appeals

concluded that Section 213(b)(10)(A) is “ambiguous”

because it provides “no clear answer to whether Con-

gress intended to include service advisors within the

exemption.” Pet. App. 6-8. The court explained that it

would be “plausible to read the term ‘salesman’ broad-

ly and to connect the term to ‘servicing automobiles,’”

but that it is “at least as plausible” to read “salesman”

as linked only to “sell{ing]” automobiles, which service

advisors do not do. /d. at 7. The court stated that

Congress may often intend to link “each subject

* * * with each verb” when it “uses a list of disjunc-

tive subjects (here, ‘salesman, partsman, or mechan-

ic’) followed by a list of disjunctive verbs (here, ‘sell-

ing or servicing’),” but that the analysis of that ques-

tion ultimately “depends on context.” /d. at 14.

“{M]ost English speakers,” the court explained, would

understand that the statement that I know my pets

need to be let out “‘if my dogs or cats are barking or

meowing’” is intended in context to refer “only to a

barking dog and a meowing cat.” /bid.

The court of appeals concluded that Section

213(b)(10) is similar. The court explained that “it is

hard to imagine, in ordinary speech, a “mechanic pri-

marily engaged in selling automobiles.” Pet.

App. 14-15. “{I]t seems that Congress intended the

subject ‘mechanic’ to be connected to only one of the

two verb clauses, ‘servicing.’” /d. at 15. The court

concluded that the same analysis applies to “sales-

man,” because “ijt is hard to imagine, in ordinary

speech, [a] ‘salesman primary engaged in

servicing automobiles.” /bid. “The nature of the word

‘salesman,’” the court reasoned, “strongly implies the

actions that the person would take—selling.” bid. In

this statutory context therefore, the court concluded,

“Congress likely intended the subject ‘salesman’ to be

connected to only one of the two verb clauses, ‘sell-

ing.” Ibid. But because “Congress had not ‘directly

spoken to the precise question’” whether Section

213(b)(10)(A) applies to “service advisors,” the court

found the statute to be ambiguous. /d. at 8 (quoting

Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837, 842

(1984)).

Second, the court of appeals held that the Depart-

ment’s 2011 notice-and-comment regulation reflects a

reasonable determination that service advisors do not

qualify for the exemption under Section 213(b)(10)(A).

Pet. App. 8-19. The court first concluded that earlier

subregulatory statements in the agency’s 1978 opinion

letter and 1987 FOH did not reduce the degree of

deference owed to the 2011 regulation. /d. at 8-11.

The court explained that the Department’s regula-

tions in 29 C.F.R. 779.372(c) had consistently inter-

preted Section 213(b)(10) for 45 years, and that the

Department had carefully considered public com-

ments addressing the question here before adopting

its 2011 regulation. Pet. App. 9-10. Even if that regu-

lation might be viewed as a “change in position,” the

court added, “an agency is permitted to change its

position,” and the Department both acknowledged the

contrary views in the 1978 opinion letter and “ration-

ally explained why, in its view,” its final regulation

properly construed the scope of the exemption. /d. at

10.

The court of appeals ultimately concluded that the

Department’s regulation reflected a reasonable and

“permissible choice” to which deference is warranted.

Pet. App. 11-19. The Department’s regulation was

consistent with a “natural reading” of the statutory

text, the court explained, which “strongly suggests

that Congress did not intend that both verb clauses

[selling or servicing] would apply to all three subjects”

and that Congress instead “likely intended the subject

‘salesman’ to be connected to only one of the two verb

clauses, ‘selling.’” /d. at 14-15. In addition, the court

added, the reading “does not render any term mean-

ingless or superfluous,” id. at 15, and is consistent

with the “inconclusive” legislative history, id. at 15-19.

SUMMARY OF ARGUMENT

The court of appeals correctly accorded Chevron

deference to the Department of Labor’s 2011 interpre-

tation of Section 213(b)(10)(A) in notice-and-comment

regulations. Although Section 213(b)(10)(A) is not

itself unambiguous on the precise question whether

service advisors are exempted from the FLSA’s over-

time-pay requirements, its text, statutory context, and

legislative history all strongly indicate that the provi-

sion exempts only salesmen who sell vehicles and

partsmen and mechanics who service such vehicles—

but not service advisors, on the rationale that they sell

the servicing performed by others. The Department’s

construction of Section 213(b)(10)(A) to that effect is

thus reasonable and entitled to deference.

1. A statute like Section 213(b)(10)(A) that uses a

series of nouns (here, “salesman, partsman, or me-

chanic”) followed by a series of gerunds (“selling or

servicing”) can be read in one of two ways. Some-

times, each of the antecedent nouns is intended to link

to each gerund. Alternatively, when distributive

phrasing is meant, each noun is properly understood

to refer to an appropriate gerund. The interpretive

canon reddendo singula singulis recognizes that

drafters sometimes utilize distributive phrasing and

that the proper interpretation of such language ap-

propriately turns on the context in which it is used.

The fact that the word “or” is disjunctive will there-

fore address the relationship between the words in the

noun series or in the gerund series, but does not re-

solve the relationship of the words in one series to

those in the other.

Section 213(b)(10)’s statutory context strongly

suggests distributive phrasing. First, the term

“salesman” logically suggests the appropriate gerund

phrase—“selling” vehicles—just as the terms “me-

chanic” and “partsman” are tied logically to “servic-

ing” vehicles. Second, when Congress used the term

“salesman” by itself in Section 213(b)(10)’s second

clause, it utilized only the phrase “selling” vehicles.

28 U.S.C. 213(b)(10)(B). And Congress in that clause

omitted the gerund “servicing” to effectuate its repeal

of an overtime exemption for the employees properly

linked to that term (mechanics and partsmen). bid.

That drafting choice strongly suggests that Congress

understood and intended Section 213(b)(10)(A) to

apply only to salesmen “selling” vehicles and mechan-

ics and partsmen “servicing” such vehicles, not to

other employees who could be said to be “selling the

servicing” of such vehicles. Indeed, the legislative

history of Section 213(b)(10), beginning with NADA’s

original request for the exemption embodied in the

1966 amendments, indicates that Congress intended to

exempt only those salesmen selling automobiles and

other vehicles.

Petitioner’s contention (Br. 19, 25) that service ad-

visors are exempt because they are salesmen engaged

in the “selling of the servicing of automobiles” fits

poorly with the text of Section 213(b)(10)(A). Such a

sales employee is not “primarily engaged in” either

“selling * * * automobiles” or “servicing automo-

biles,” as the provision requires, 29 U.S.C.

213(b)(10)(A). In particular, the task of “selling ser-

vicing” for vehicles is not naturally understood to

constitute “servicing” such vehicles.

2. Although Section 213(b)(10)(A) does not itself

put the issue beyond debate, the foregoing considera-

tions show that the Department’s implementation of

the provision is reasonable and entitled to deference.

Chevron deference applies where, as here, an agency

exercises a general delegation of congressional au-

thority to interpret the statute it administers. This

Court has thus previously held that the Department’s

notice-and-comment rulemaking pursuant to the same

statutory authority at issue here is entitled to Chevron

deference.

Petitioner argues that deference is unwarranted

because the Department failed to account for “reli-

ance” on its 1978 opinion letter in a way that threatens

“retroactive liability.” But Congress expected such

regulatory changes and enacted 29 U.S.C. 259(a) to

avoid retroactive liability by providing a defense for

good-faith reliance on superseded agency guidance

like that invoked by petitioner. Moreover, petitioner’s

claim of far-reaching consequences is significantly

overstated. The FLSA provides a separate overtime

exemption for salesmen in retail or service establish-

ments who receive more than half their earnings from

commissions and earn more than 1.5 times the mini-

mum wage. 29 U.S.C. 207(i). If service advisors at

retail or service establishments are compensated as

petitioner suggests, such employees would be exempt

under that separate provision, but not under Section

213(b)(10)(A).

ARGUMENT

SECTION 213(b)(10)(A) DOES NOT EXEMPT “SERVICE

ADVISORS” AT AUTOMOBILE DEALERSHIPS FROM

THE FLSA’S OVERTIME-PAY REQUIREMENTS

Section 213(b)(10)(A) does not exempt from the

FLSA’s overtime-pay requirements “service advisors”

at car dealerships. That provision, when read in con-

text, carves out an overtime exemption for a “sales-

man” who is “primarily engaged in selling * * *

automobiles,” but not for a service advisor who sells

the servicing of automobiles. The statutory text and

drafting history strongly indicate that service advisors

do not qualify for this exemption.

The first question under the Court’s familiar Chev-

ron analysis is “whether Congress has directly spoken

to the precise question at issue” by making its intent

on that question “unambiguous[].” Chevron U.S.A.

Inc. v NRDC, 467 U.S. 837, 842-843 (1984). In the

government’s view, Congress did not speak so clearly

as to put the point beyond dispute. That statutory

ambiguity, however, was authoritatively resolved by

the Department in its 2011 notice-and-comment im-

plementing regulations, which interpret “salesman” in

this context to mean an employee employed for the

purpose of, and who is primarily engaged in, “making

sales * * * of the automobiles” sold by the dealer-

ship. 29 C.F.R. 779.372(c)(1). As explained below, the

Department’s regulation is reasonable and is entitled

to Chevron « ~ference.

A. Section 213(b)(10)(A), While Not Unambiguous, Is

Best Read Not To Exempt Service Advisors

Section 213(b)(10)(A)’s overtime exemption applies

to “any salesman, partsman, or mechanic primarily

engaged in selling or servicing automobiles, trucks, or

farm implements” if he is employed by a retail dealer-

ship primarily engaged in selling such vehicles or

implements. 29 U.S.C. 213(b)(10)(A). The question

presented in this case largely turns on the relation-

ship between the first two disjunctively phrased series

of words in that provision: (1) “salesman, partsman, or

mechanic,” and (2) “selling or servicing automobiles.”

Section 213(b)(10)(A)’s application to a “salesman” is

best read to apply only to a “salesman” primarily

engaged in “selling * * * automobiles,” because the

act of “servicing automobiles” logically ties only to a

“partsman” or “mechanic” and not to a “salesman.”

Compare 29 U.S.C. 213(b)(10)(B) (linking “salesman”

only with “selling” vehicles). Under that reading,

service advisors, even if they qualify as a type of

“salesman,” fall outside the scope of Section

213(b)(10)(A) because they are primarily engaged in

selling the servicing of automobiles, not selling the

automobiles themselves.

I. Section 213(b)(10)(A)’s text and statutory context

are best read as using distributive phrasing to ex-

empt a “salesman” only when he is primarily en-

gaged in “selling * * * automobiles”

a. Distributive phrasing properly links words in a

series only to their appropriate referent

Section 213(b)(10)(A)’s contains a series of nouns

(“salesman, partsman, or mechanic”) and a subse-

quent series of gerunds (“selling or servicing”). The

words in each series are linked by the term “or.” That

term is “almost always disjunctive, that is, the words

it connects are to be given separate meanings.”

Loughrin v. United States, 134 S. Ct. 2384, 2390

(2014) (citation omitted). Accordingly, the nouns

“salesman,” “partsman,” and “mechanic” are properly

read as having independent meanings, as are the ger-

unds “selling” and “servicing.” The disjunctive nature

of “or” within each series, however, provides little

definitive guidance beyond understanding the rela-

tionship between the series of words it joins. In par-

ticular, it does not resolve how Section 213(b)(10)(A)’s

series of nouns and its series of gerunds relate to each

other.’

A series of disjunctively phrased nouns and a sub-

sequent series of disjunctively phrased gerunds or

verbs may sometimes properly be read so that each

noun applies to each gerund or verb. For instance,

the sentence “any sixth-, seventh-, or eighth-grade

student may elect studying, resting, or exercising

during free periods” is naturally read as meaning any

sixth-grader may study, rest, or exercise and any

seventh- or eighth-grader has the same three options.

No grammatical rule, however, requires that noun

and gerund/verb series always be read in that manner.

The interpretive canon reddendo singula singulis

(“referring each to each”) recognizes that two series

of words juxtaposed within a single sentence may

' The disjunctive “or” can itself convey two different types of

relationships between the words it connects. “Or” can carry the

meaning of an exclusive disjunction (A or B, but not both) or an

inclusive one (A or B or both). See Kenneth A. Adams & Alan S.

Kaye, Revisiting the Ambiguity of “And” and “Or” in Legal

Drafting, 80 St. John’s L. Rev. 1167, 1180-1181 (2006); cf. 11 U.S.C.

102(5) (clarifying that “‘or’ is not exclusive” in the Bankruptcy

Code). Thus, the phrase “selling or servicing” could be understood

in the exclusive sense to suggest that an antecedent noun (such as

a “salesman”) is understood to engage in either “selling” or “ser-

vicing” automobiles, but not both.

properly be understood as reflecting “{dJistributive

phrasing [that] applies each expression to its appro-

priate referent.” Antonin Scalia & Bryan A. Garner,

Reading Law: The Interpretation of Legal Texts 214

(2012) (Reading Law). Under that canon, for in-

stance, the statutory phrase “‘for money or other good

consideration paid or given’” has long been under-

stood as referring to “‘money paid or other good con-

sideration given’” because the “consequent ‘paid’” in

context should be read to refer to “the antecedent

‘money’” and the “consequent ‘given’ to the anteced-

ent ‘consideration.’” Francis J. McCaffrey, Statutory

Construction § 19, at 52 (1953); see Fortunatus

Dwarris, A General Treatise on Statutes, Pt. 2, at 613

(2d ed. 1848) (same example; explaining that terms in

such juxtaposed series are applied to “the subject-

matter to which they appear by the context most

properly to relate”). The sentence “letters are sent to

any man or woman interested in joining a fraternity or

sorority” similarly is properly read to describe letters

sent only to any man interested in joining a fraternity

and any woman interested in joining a sorority. Cf.

Reading Law 214 (providing similar example).

Such applications of the distributive-phrasing can-

on are justified by “the simple observation” that Eng-

lish speakers “sometimes do combine multiple series

of ideas in a distributive manner.” R.N. Graham, Jn

Defense of Maxims, 22 Statute L. Rev. 45, 57 (2001)

(Graham); see Earl T. Crawford, The Construction of

Statutes § 194, at 334 (1940) (reddendo canon “finds

its justification in our use of the English language”).

Although any ambiguity produced by using distribu-

tive syntax can be eliminated with sentences that

directly connect each intended word pairing and sepa-

rate the paired words from the others, distributive

phrasing yields a linguistic economy that continues to

“appear from time to time in modern statutes.” Gra-

ham 58. Cf. Reading Law 215-216 & n.8 (noting that

“distributive-phrasing has largely fallen into disuse”

in statutory drafting; citing Graham). The existence

of such provisions’ reflects that distributive phrasing

is consistent with grammatical norms and that the

meaning of provisions like Section 213(b)(10)(A) will

not necessarily be resolved by the presence a disjunc-

tive “or.”

For instance, in United States v. Simms, 5 U.S. (1

Cranch) 252 (1803), the United States sought to re-

cover a statutory penalty in the District of Columbia

by invoking a Virginia statute authorizing “any per-

son” to bring an action of debt for a $150 statutory

penalty against the owner of an establishment at

which unlawful gambling occurred. /d. at 252-253; see

id. at 254. Although Congress had made that statute

applicable to the portions of the District ceded by

Virginia, the government “admitted that, under the

laws of Virginia, an indictment for this penalty could

not be sustained.” /d. at 256. The government in-

stead argued that Congress had established a “new

* See, eg., 7 U.S.C. 1a(18(a)(v)(I1D)(bb) (“an asset or liability

owned or incurred”); 10 U.S.C. 2563(c)(1)(C) (“articles or services

{that} can be substantially manufactured or performed” by certain

facilities); 33 U.S.C. 1341(a)(4) (a “facility or activity shall be

operated or conducted”); 42 U.S.C. 1396b(w)(1)(D)ii) (“legislation

or regulations * * * enacted or adopted”); 42 U.S.C. 4052(b)(2)

(“profits or losses realized or sustained”); 43 U.S.C. 902 (“any

patent or certification of lands erroneously patented or certified”);

47 U.S.C. 155(c)(3) (“any order, decision, report, or action made or

taken” pursuant to delegated authority, where “taken” applies

only to “action”).

remedy” authorizing recovery of the penalty by in-

dictment. /bid. The statute forming the basis for that

argument provided that “all fines, penalties and forfei-

tures accruing under the laws of the states of Mary-

land and Virginia, which by adoption have become the

laws of this [D]istrict, shall be recovered with costs,

by indictment or information in the name of the Unit-

ed States, or by action of debt in the name of the

United States and of the informer.” /d. at 254 (em-

phasis added).

Chief Justice Marshall, writing for the Court, re-

jected the government’s argument that the disjunc-

tively phrased statute allowed it to collect the statuto-

ry penalty by indictment. Simms, 5 U.S. (1 Cranch) at

258-259. The Court instead invoked “reddenda sin-

gula singulis,” id. at 259, to interpret Congress’s au-

thorization distributively, such that the United States

could proceed by indictment only when the law of the

particular State under which the penalty accrued

would itself allow the State to proceed by indictment.

Id. at 258-259. Because Virginia law allowed a qui

tam relator to seek the statutory penalty only in an

action in debt, the Court explained, it was “more

proper to suppose the qui tam action * * * to be the

remedy.” /d. at 259.

b. Section 213(b)(10)'s text reflects the use of distrib-

utive phrasing

i. The touchstone for applying the reddendo prin-

ciple, like statutory construction more generally, is

context. Two primary contextual considerations in

Section 213(b)(10)’s text strongly indicate that Con-

gress intended Section 213(b)(10)(A) to exempt any

“salesman” primarily engaged in “selling * * * auto-

mobiles” and intended the phrase “servicing automo-

biles” to apply only to a “partsman” or “mechanic,”

not a “salesman.”

First, the term “salesman,” as the court of appeals

recognized, “strongly implies” the activity in the stat-

utory provision to which the term applies: “selling

* * * automobiles.” Pet. App. 15. In common par-

lance, a “salesman” is not normally understood to be

“primarily engaged in * * * servicing automobiles,”

29 U.S.C. 213(b)(10)(A). “Servicing” automobiles is

more logically tied to the mechanics and partsmen

who engage in such servicing. Correspondingly, the

term “mechanic” in Section 213(b)(10)(A) likewise

indicates distributive phrasing. Otherwise, the provi-

sion would apply to a “mechanic” primarily engaged in

“selling * * * automobiles,” 28 U.S.C. 213(b)(10)(A).

But just as a “salesman” does not primarily engage in

“servicing” automobiles as those terms are commonly

understood, neither does a “mechanic” primarily en-

gage in “selling” automobiles.

Second, Section 213(b)(10)(B) demonstrates that

when Congress separated “salesman” from “parts-

man” and “mechanic,” Congress linked “salesman”

only to the “selling” of the vehicles sold by their em-

ployers.

Section 213(b)(10)(A) and (B) were both enacted in

the Fair Labor Standards Amendments of 1974, Pub.

L. No. 93-259, § 14, 88 Stat. 65. The language for

each of the provisions originated in H.R. 12435, as

reported in the House of Representatives. Compare

H.R. 12435, 98d Cong., 2d Sess. § 14, at 71-72 (Mar.

14, 1974) (as reported), with 29 U.S.C. 213(b)(10)(A)

and (B).* The House Report accompanying that bill

* After the House passed Section 213(b)(10)’s text in H.R. 12435,

see 120 Cong. Rec. 7331, 7338 (1974), the House inserted the

explained that the bill’s revision of Section 213(b)(10)

was designed to “repeal{]” “(t]he overtime exemption

for partsmen and mechanics” in establishments “sell-

ing aircraft and trailers” while retaining the pre-

existing exemption for the “salesmen” in those estab-

lishments. H.R. Rep. No. 913, 93d Cong., 2d Sess. 47

(1974). The report further explained that the bill

added a new exemption for “salesmen in non-

manufacturing establishments primarily engaged in

selling boats.” Jbid. The House Report’s description

of the bill accordingly treated all of the “salesmen”

that H.R. 12435 would exempt in the same manner,

stating that the “salesmen in nonmanufacturing estab-

lishments primarily engaged in selling aircraft, auto-

mobiles, trucks, trailers, farm implements, and boats”

would be exempt. Jbid. The bill's sponsor, Repre-

sentative Dent, explained the conference agreement in

the same way. 120 Cong. Rec. 8602 (1974).*

For the trailer-, boat-, and aircraft-selling estab-

lishments whose “salesman” (but not partsman or

mechanic) is exempt, Congress enacted text exempt-

ing “any salesman primarily engaged in selling trail-

ers, boats, or aircraft.” 29 U.S.C. 213(b)(10)(B) (em-

phases added). That provision thus effectuated the

repeal of the earlier exemption for partsmen and

mechanics in trailer- and aircraft-selling establish-

provisions of that bill into S. 2747, passed the latter, and requested

a conference on S. 2747, id. at 7344, 7349. Congress adopted the

House text in Section 213(b)(10). See E.R. Conf. Rep. No. 953, 93d

Cong., 2d Sess. 11 (1974).

‘ Representative Perkins similarly had earlier explained that,

under H.R. 12435’s direct predecessor, boat “salesmen are treated

like automobile, truck and agricultural implement salesmen.” 119

Cong. Rec. 18,158 (1973); cf. H.R. Rep. No. 913, at 4 (discussing

evolution of H.R. 12435 from H.R. 7935).

ments—not only by omitting the terms “partsman”

and “mechanic,” but also by omitting the activity—the

“servicing” of trailers and aircraft—linked to those

employees.

In doing so, Congress indicated its intent that an

exempt “salesman” primarily engages in “selling”

vehicles, and that “servicing” such vehicles is per-

formed only by partsmen and mechanics. Congress’s

contemporaneous decision to retain the gerund “ser-

vicing” in Section 213(b)(10)(A) thus reflects that

Section 213(b)(10)(A) uses distributive phrasing to

connect the word “salesman” only to “selling” vehicles

and the words “partsman” and “mechanic” to “servic-

ing” vehicles. That use of “salesman” directly tracks

the Department’s 1970 Interpretive Bulletin’s inter-

pretation of “salesman,” 29 C.F.R. 779.372(c¢)(1)

(1971), with which Congress was presumably familiar

when it enacted Section 213(b)(10)(A) and (B) in 1974.

ii. Petitioner argues (Br. 29-30) that Section

213(b)(10)(A) must be read to cover a service advisor,

on the rationale that such an employee who sells the

servicing of automobiles is a “salesman” who is “pri-

marily engaged in * * * servicing automobiles,” 29

U.S.C. 213(b)(10)(A). Any other reading, petitioner

asserts (Br. 30), would render the provision’s applica-

tion to a “partsman” a nullity. That is incorrect.

The phrase “to engage in servicing automobiles,”

when used in ordinary language, means “to employ or

involve oneself” and “to take part” in “repair[ing] or

provid{ing] maintenance for” automobiles. See Web-

ster’s Third New International Dictionary 751 (1966)

(defining the verb “engage”); id. at 2075 (defining the

verb “service”). Unlike a service advisor, a partsman

is naturally understood to involve himself in repairing

or providing maintenance for automobiles by working

with a mechanic and “dispensing parts,” 29 C.F.R.

'779.372(c)(2).° An English speaker would regard an

individual who hands parts to a mechanic while the

mechanic installs them on a car to be himseif involved

in repairing or providing maintenance for the car,

even if he does not personally install the parts. See

Resp. Br. 32-35 (describing cooperation between

partsmen and mechanics). A mechanic, of course,

might be able to obtain the parts to complete a repair

without the real-time assistance of a partsman by his

side. But that merely reinforces the conclusion that a

partsman is involved in repairing or providing

maintenance because he performs key tasks in repair-

ing the vehicle. Dividing those tasks between two

individuals reflects that both the mechanic and the

partsman are logically understood as involved in re-

pairing (“servicing”) the vehicle.

A service advisor, by contrast, plays no similar

role. Petitioner repeatedly argues that a service advi-

sor is engaged in the service “process” because he is

“engaged in the selling of the servicing of automo-

biles.” Pet. Br. 19, 23, 25 (emphasis added). But an

individual who simply suggests to the customer the

servicing to be performed, and in that sense is “sell-

ing” the servicing, is not naturally understood to be

“primarily engaged in * * * servicing automobiles,”

because he does not primarily “involve [him]self” and

° The Department interprets a “partsman” to be an employee

who “dispens(es] parts” and the associated duties of “requisition-

ing” and “stocking” parts. 29 C.F.R. 779.372(e)(2). The Depart-

ment similarly interprets a “salesman” as one who not only sells

vehicles but performs work “incidental to and in conjunction with

the employee’s own sales or solicitations.” 29 C.F.R. 779.372(c)(1).

“take part” in “repair[ing] or provid[ing] maintenance

for” such automobiles. See Webster’s Third New

International Dictionary 751, 2075. Just as a person

who sells plastic surgery, technical support, or house

painting is not by virtue of his salesmanship actually

engaged in plastic surgery, technical support, or

painting, a service advisor who sells servicing is not

engaged in that servicing. The servicing is performed

later, by others.

Petitioner asserts (Br. 25) that it would be “non-

sensical to suggest that an individual who is primarily

engaged in selling the servicing of automobiles is

engaged in neither selling nor servicing automobiles.”

But petitioner loses sight of the FLSA’s text. It is

entirely sensical to conclude that an individual “selling

the servicing of automobiles,” ibid. (emphasis added),

is neither “selling * * * automobiles” nor “servicing

automobiles,” as Section 213(b)(10)(A) requires. Peti-

tioner does not argue that service advisors are pri-

marily engaged in selling automobiles. And, as ex-

plained, the job of “selling the servicing” is not the

same as actually servicing automobiles. Petitioner’s

reading makes a hash of the statutory phrase “selling

or servicing automobiles” by reading Section

213(b)(10) to cover the “selling of servicing automo-

biles.”

2. Section 213(b)(10)’s legislative history indicates

that Congress understood the exemption to apply

only to those salesmen who sell vehicles

Section 213(b)(10)’s legislative history similarly re-

flects that Congress intended the provision to be read

distributively to exempt only a “salesman * * *

selling * * * automobiles.”

Beginning with NADA’s initial 1965 request for the

overtime exemption, the legislative history reflects

the understanding that Section 213(b)(10)’s exemption

for salesmen would apply simply to salesmen of vehi-

cles or farm implements. NADA justified the exemp-

tion by explaining that the “automobile salesmen” who

would be exempt are “extremely well-paid employees”

who did not need overtime protection. 1965 House

Hearing 368. Moreover, NADA’s representative

testified, it would be “practically impossible” to “keep

accurate records of the time [a salesman] spends

working” because “[a] salesman * * * is actually

selling, or trying to sell, every place he goes where he

is in contact with the public” and therefore “spends a

substantial number of hours performing his duties

away from the dealer’s place of business.” /d. at 368-

369; see id. at 372. That description applies to auto-

mobile salesmen but not to service advisors, who are

posted in, and do their selling from, the dealer’s prem-

ises.

The floor debates on Section 213(b)(10) suggest no

intent to exempt employees like service advisors.

Reflecting NADA’s rationale for exempting salesmen

of automobiles, Senator Yarborough explained that

“salesmen * * * do not get overtime because their

work is outside” and “(t]he reason for exempting the

salesmen” from the overtime requirement “was the

difficulty of their keeping regular hours.” 112 Cong.

Rec. 20,504 (1966). “The salesman tries to get [cus-

tomers] mainly after their hours of work” when cus-

tomers are able to “look at automobiles.” Jbid. For

that reason, the bill’s exemption was designed to allow

a “salesman * * * [to] go out and sell an Oldsmobile,

a Pontiac, or a Buick all day long and all night.” /bid.;

see ibid. (statement of Sen. Bayh) (“Salesmen are a

little different breed of cats, because they go out at

unusual hours, trying to earn commissions.”).

Similarly, when Congress considered legislation

that led to the 1974 Fair Labor Standards Amend-

ments, NADA urged retaining Section 213(b)(10)’s

exemption with statistics illustrating the adequacy of

the salaries of “car and truck salesmen,” “partsmen,”

and “automobile mechanics.” Fair Labor Standards

Amendments of 1971: Hearings on S. 1861 and S.

2259 Before the Subcomm. on Labor of the Senate

Comm. on Labor and Public Welfare, 92d Cong., 1st

Sess. Pt. 2, at 780, 783 (1971). NADA again explained

“salesmen” spend “substantial” time working away

from the dealership. /d. at 780. And NADA’s repre-

sentative specifically discussed mechanics’ work with

“service advisors[s]” or “service manager[s]” but

never suggested that the latter were exempt under

Section 213(b)(10). See id. at 780-781.

3. There is no occasion in this case to rely on the prin-

ciple that FLSA exemptions are narrowly construed

Petitioner contends (Br. 34-35) that the Ninth Cir-

cuit erred by “effectively appl[ying] a clear statement

rule” requiring a “narrow construction” of FLSA

exemptions and that this Court should reject such a

rule by requiring exemptions to be read “fairly and

correctly.” This Court’s decisions, however, have long

established that a narrow construction of ambiguous

FLSA exemptions is the correct method to construe

the Act. In any event, this case presents no occasion

to address that principle. The court of appeals did not

rest its judgment on the principle, and the question

presented is properly resolved without relying on it.

It has long been “well settled that exemptions from

the Fair Labor Standards Act are to be narrowly

construed.” Mitchell v. Kentucky Fin. Co., 359 U.S.

290, 295 (1959); see Arnold v. Ben Kanowsky, Inc.,

361 U.S. 388, 392 (1960). “Breadth of coverage was

vital to [the Act’s] mission,” which Congress has de-

clared in “bold and sweeping terms” with only “nar-

row and specific” exemptions. Powell v. United States

Cartridge Co., 339 U.S. 497, 516-517 (1950).

That FLSA principle is a particularly well ground-

ed variant of the interpretive rule that “[a]n exception

to a ‘general statement of policy’ is ‘usually read

narrowly in order to preserve the primary operation

of the provision.”” Maracich v. Spears, 133 S. Ct.

2191, 2200 (2013) (quoting Commissioner v. Clark, 489

U.S. 726, 739 (1989)); see City of Edmonds v. Oxford

House, Inc., 514 U.S. 725, 731-732 (1995). Unless

“commanded by the text,” such “exceptions ought not

operate to the farthest reach of their linguistic possi-

bilities,” Maracich, 133 S. Ct. at 2200, lest they “evis-

cerate thfe] legislative judgment” underlying the

“general rule” that they would displace. Clark, 489

U.S. at 739. And because that principle applies when

construing exceptions from a general rule, it does not

extend to contexts involving “general definition[s] that

appl[y] throughout the FLSA.” Christopher v.

SmithKline Beecham Corp., 132 S. Ct. 2156, 2172 n.21

(2012); see Sandifer v. United States Steel Corp., 134

S. Ct. 870, 879 (2014).

In this case, the narrow-construction principle does

not affect the proper disposition. Where, as here, an

agency has exercised its “legislative[ly] delegat[ed]”

authority to resolve ambiguity in “the statute by regu-

lation,” “a court may not substitute its own construc-

tion” for that of the agency if the agency has adopted

a “reasonable interpretation,” even if “the court would

have reached” a different reading on its own. Chev-

ron, 467 U.S. at 843 n.11, 844; see National Cable &

Telecomms. Ass'n v. Brand X Internet Servs., 545

U.S. 967, 982-983 (2005); cf. United States v. Mead

Corp., 533 U.S. 218, 228 (2001).

The court of appeals appears to have followed that

course in this case. Although it noted the “back-

ground rule” that FLSA exemptions are narrowly

construed, Pet. App. 6, the court concluded that the

scope of Section 213(b)(10)’s exemption is itself am-

biguous, id. at 7-8, before adding that application of

the narrow-construction canon could not “aid [peti-

tioner}” in this case, id. at 8. The court therefore

proceeded under Chevron’s analytical framework to

determine that the Department’s notice-and-comment

regulation reasonably interpreted the statute’s am-

biguous text and was entitled to deference. /d. at 11;

see id. at 11-19. In doing so, the court briefly noted

that the Department’s interpretation “accords with

the presumption that the § 213 exemptions should be

construed narrowly,” while emphasizing that the

agency’s interpretation need not be the “best con-

struction” to warrant Chevron deference. Z/d. at 11

(citation omitted).

This case thus does not present an occasion to ad-

dress whether the FLSA’s exemptions should be nar-

rowly construed when an agency interpretation reach-

es a different result or in the absence of any adminis-

trative interpretation. The agency’s interpretation

here not only is a reasonable reading of Section

213(b)(10)(A), it is the better one. That holds true

regardless whether Section 213(b)(10)(A) should be

narrowly construed.

B. The Department’s Notice-And-Comment Regulations,

Which Reasonably Implement Section 213(b)(10)(A),

Are Entitled To Chevron Deference

For the reasons stated above, the text, statutory

context, and legislative history strongly suggest that

Congress utilized distributive phrasing in Section

213(b)(10)(A) to exempt from the Act’s overtime re-

quirements those salesmen who are primarily engaged

in “selling * * * automobiles,” but not service advi-

sors. In the government’s view, however, those fac-

tors do not sufficiently show that “Congress has di-

rectly spoken to the precise question at issue” by

expressing an unambiguous intent to exclude service

advisors under Section 213(b)(10)(A), see Chevron, 467

U.S. at 842-843.

They do, however, demonstrate that the Depart-

ment reasonably concluded in its 2011 rulemaking that

a “salesman” must be primarily engaged in selling

vehicles, 29 C.F.R. 779.372(c)(1); that the exemption

“requires an employee to either primarily service the

vehicle or ‘sell’ the vehicle—not sell the service of the

vehicle”; and that “service advisors” accordingly are

not exempt under Section 213(b)(10)(A), see 76 Fed.

Reg. 18,838 (Apr. 5, 2011). Petitioner, however, ar-

gues that the Department’s notice-and-comment regu-

lation is a mere “interpretive” rule given a lesser

degree of deference, Br. 40-41, and that deference is

unwarranted because the regulation does not suffi-

ciently justify upsetting settled expectations and

would produce significant adverse consequences, Br.

40-45. Those contentions are without merit.

1. The Department’s regulations are reviewed for rea-

sonableness under Chevron

Petitioner states (Br. 36-37) that the Department’s

2011 regulations implementing Section 213(b)(10) are

entitled to “less deference” than a legislative rule

and, as such, may be upheld only if “reasonable.” To

the extent petitioner seeks to distinguish between

arbitrary-and-capricious review, which applies when

Congress “explicitly le[aves] a gap for the agency to

fill,” and the traditional type of Chevron deference

owed to an agency’s “reasonable” statutory interpre-

tation, which applies when Congress “implicit[{ly]”

vests an agency with authority to resolve ambiguity in

a statute it administers, see Chevron, 467 U.S. at 843-

844, the government agrees that “reasonableness”

deference is warranted. Such “implicit” delegations

are often reflected in an “agency’s generally conferred

authority,” indicating Congress’s intent that the agen-

cy will “speak with the force of law when it addresses

ambiguity in the statute.” Mead Corp., 533 U.S. at

229; see City of Arlington v. FCC, 133 S. Ct. 1863,

1874 (2013) (“[N]o” case has ever held that “a general

conferral of rulemaking or adjudicative authority” is

“insufficient to support Chevron deference for an

exercise of that authority within the agency’s substan-

tive field.”).

Congress delegated such authority to the Depart-

ment by expressly authorizing it to issue rules and

regulations concerning this exemption. The exemp-

tion was adopted in the Fair Labor Standards Amend-

ments of 1966 and revised in similar amendments in

1974, and both statutes confer authority to prescribe

“necessary rules, regulations, and orders with regard

to the amendments” made therein. Pub. L. No. 93-

259, § 29(b), 88 Stat. 76; see Pub. L. No. 89-601, § 602,

80 Stat. 844. The Department’s 2011 invocation of

notice-and-comment rulemaking to exercise that au-

thority reflects a prototypical example of agency ac-

tion entitled to Chevron deference. See Mead Corp.,

533 U.S. at 229. Indeed, this Court has already held

that the 1974 Act’s rulemaking provision authorizes

the Department to “fill gaps [in a Section 213(b) ex-

emption] through rules and regulations” that are then

entitled to Chevron deference. Long Island Care at

Home, Ltd. v. Coke, 551 U.S. 158, 165 (2007).

2. The Department sufficiently justified its 201] regu-

lations, which do not impose retroactive liability

Petitioner argues (Br. 40-42) that the Department’s

2011 regulations are not entitled to deference because

the Department did not sufficiently “explain{] the

changes in policy [or] account([] for reliance interests”

arising from the agency’s 1978 opinion letter and 1987

Field Operations Handbook. The agency, however,

fully satisfied its obligation to engage in reasoned

decisionmaking by showing an “awareness” of its prior

interpretations and “good reasons” for its 2011 regu-

lations, FCC v. Fox Television Stations, Inc., 556 U.S.

502, 515 (2009) (Fox). See 76 Fed. Reg. at 18,838

(discussing 1978 opinion letter and basis for current

regulatory interpretation); 73 Fed. Reg. 43,654, 43,659

(July 28, 2008) (discussing 1987 Handbook).

Petitioner incorrectly suggests that the Depart-

ment’s interpretation of Section 213(b)(10) altered a

prior policy engendering “serious reliance interests”

that the agency needed to address. Br. 41 (quoting

Fox, 556 U.S. at 515, and citing Smiley v. Citibank,

N.A., 517 U.S. 735, 742 (1996)). The type of reliance

interests suggested by Fox and Smiley involve the

imposition of retroactive civil liability for “past actions

* * * taken in good-faith reliance on [agency] pro-

nouncements,” NLRB v. Bell Aerospace Co., 416 U.S.

267, 295 (1974) (dictum), or criminal liability for past

actions taken in good-faith reliance on an agency in-

terpretation erroneously treating unlawful conduct as

lawful, United States v. Pennsylvania Indus. Chem.

Corp., 411 U.S. 655, 670-675 (1973) (holding a good-

faith defense may be asserted). Such interests are not

implicated by 29 C.F.R. 779.372(c), which has no un-

toward retroactive effects.

Although petitioner suggests that the 2011 regula-

tions create “retroactive liability,” Br. 43, petitioner is

mistaken. Congress specifically contemplated that, in

the course of its administration of the FLSA, the

Department would from time to time modify or re-

secind its administrative measures such as regulations,

rulings, and interpretations. See 29 U.S.C. 259(a).

The Portal-to-Portal Act of 1947, 29 U.S.C. 251 et seq.,

accordingly provides that an employer sued for al-

leged FLSA violations “shall [not] be subject to any

liability” for failing “to pay minimum wages or over-

time compensation” under the FLSA if the employer

establishes that its “act or omission complained of was

in good faith in conformity with and in reliance on any

written administrative regulation, order, ruling, ap-

proval, or interpretation, of [the Administrator of the

Department’s Wage and Hour Division],” even if that

agency guidance has since been “modified or rescind-

ed.” 29 U.S.C. 259(a) and (b)(1); see 29 C.F.R. 790.13.

The 2011 regulations thus should not produce “retro-

active liability,” because an appropriate defense

should be recognized for service advisors’ overtime

claims accruing before the regulations’ May 5, 2011

effective date. Cf. 76 Fed. Reg. at 18,832 (effective

date).

The Department acknowledged NADA’s contention

that the “automobile and truck dealership industry

ha[{d] relied upon the Administrator’s 1978 opinion

letter” concerning service advisors. 76 Fed. Reg. at

18,838. But the final rule became effective one month

after its publication in the Federal Register, id. at

18,832, thereby allowing a reasonable transition away

from any unlawful employment practices and the

prospective documentation of wages and hours by

employers of service advisors. Nothing more was

necessary.”

° NADA’s actions confirm that automotive dealers have had

ample notice of the Department’s 2011 regulations. Once the

Department published the regulations, NADA successfully per-

suaded Congress to enact an appropriations rider temporarily

prohibiting the Department from enforcing the FLSA’s overtime-

pay requirements with respect to service advisors by prohibiting

appropriated funds from being used to “administer or enforce 29

C.F.R. 779.372(¢)(4).”. Department of Labor Appropriations Act,

2012, Pub. L. No. 112-74, Div. F, Tit. I, § 113, 125 Stat. 1064 (en-

acted Dec. 23, 2011); see NADA Press Release, House Appropria-

tions Subcommittee Preserves Service Advisors Overtime Exemp-

tion (July 18, 2012), http:/Awww.nadafrontpage.com/Service_

Advisors_Overtime Exemption.xml. That rider continued in force

under continuing resolutions, but ceased to have effect with the

January 2014 enactment of the Department of Labor Appropria-

tions Act, 2014, Pub. L. No. 113-76, Div. H, Tit. 1, 128 Stat. 347.

See J. Res. of Jan. 14, 2014, Pub. L. No. 113-73, 128 Stat. 3; Con-

tinuing Appropriations Act, 2014, Pub. L. No. 113-46, Div. A,

§ 101(a)(6), 127 Stat. 558; Full-Year Continuing Appropriations

Act, 2013, Pub. L. No. 113-6, Div. F, Tit. I, § 1101(a)(4), 127 Stat.

412; Continuing Appropriations Resolution, 2013, Pub. L. No. 112-

175, § 101(a)(8), 126 Stat. 1313. Despite having adopted a tempo-

rary rider to halt governmental enforcement actions, Congress

3. Petitioner’s claims of far-reaching consequences

are misplaced

Petitioner’s assertion (Br. 42-45) of “far-reaching

consequences” stemming from a purported “retroac-

tive reclassifi{cation]” requiring overtime pay creating

“potentially significant retroactive liability” is mis-

placed in light of the prospective application of the

Department’s regulations discussed above. See pp.

32-33, supra. Moreover, petitioner ignores the fact

that service advisors may be exempt under a different

FLSA exemption applicable to retail salesmen paid on

commission. See 29 U.S.C. 207(i). Petitioner repeat-

edly emphasizes that respondents, like many service

advisors at automobile dealerships, are paid on a

commission basis, suggesting that overtime pay is

unwarranted in light of such incentive-based pay. See,

e.g., Pet. Br. 1, 7, 138 & n.4, 38-39, 42-44. Although

Section 213(b)(10)’s overtime exemption depends on

the nature of an employee’s work as a “salesman,”

“nartsman,” or “mechanic,” without regard to the

method of compensating the employee, Section 207(i)

separately accounts for petitioner’s commission-

focused concerns.

Congress in Section 207(i) defined the category of

commission-earning salespersons that it determined

should be exempt from overtime pay. That provision

exempts any employee of “a retail or service estab-

lishment” who is paid “more than half his compensa-

tion” in “commissions on goods or services” if the

employee’s “regular rate [of pay] is more than one and

one-half times the minimum [federal] hourly rate.” 29

neither overturned the Department's 2011 regulations nor amend-

ed Section 213(b)(10) to apply to service advisors.

U.S.C. 207(i). At the current $7.25/hour federal mini-

mum wage, which became effective in 2009, see 29

U.S.C. 206(a)(1)(C), such employees must earn at least

$10.88/hour, which corresponds to $22,696/year for a

standard 2087-hour work year. Cf. 5 U.S.C. 5504(b)

(work year).

Nothing suggests that dealerships like petitioner,

which are “primarily engaged in the business of sell-

ing [automobiles] to ultimate purchasers,” 29 U.S.C.

213(b)(10)(A), would be unable to qualify as a “retail

or service” establishment under Section 207(i). To the

contrary, Congress enacted Section 207(i) with auto-

mobile dealerships in mind.’ And if service advisors

paid “primarily on sales commissions rather than

hourly wages” are as “well compensated” as petitioner

suggests (Br. 7, 40, 42), such employees should fall

within the Section 207(i) overtime-pay exemption. If

not, petitioner provides no reason why such lower-

paid employees should be denied the overtime availa-

ble to similarly situated sales personnel in other busi-

nesses.

" See, e.g., 106 Cong. Rec. 15,195 (1960) (statement of Rep. Dent)

(explaining that Section 207(i) reflects an agreement accepted by

“automobile dealers” that would exempt salesmen earning “1'%

times the legal minimum wage” when “50 percent or more of that

income comes from commissions”); id. at 15,220 (statement of Rep.

Roosevelt) (explaining that “the automobile dealers’ problem has

been solved” by Representative Dent’s amendment).

CONCLUSION

The judgment of the court of appeals should be af-

firmed.

Respectfully submitted.

DONALD B. VERRILLI, JR.

M. PATRICIA SMITH Solicitor General

Solicitor of Labor EDWIN S. KNEEDLER

JENNIFER S. BRAND Deputy Solicitor General

Associate Solicitor ANTHONY A. YANG

PAUL L. FRIEDEN Assistant to the Solicitor

Counsel for Appellate General

Litigation

MELISSA A. MURPHY

LAURA M. Moskow!ITz

Senior Att 8

Department of Labor

APRIL 2016

APPENDIX

1. 29 U.S.C. 207 provides in pertinent part:

Maximum hours

*_ * * & *

(i) Employment by retail or service establishment

No employer shall be deemed to have violated sub-

section (a) of this section by employing any employee

of a retail or service establishment for a workweek in

excess of the applicable workweek specified therein, if

(1) the regular rate of pay of such employee is in ex-

cess of one and one-half times the minimum hourly

rate applicable to him under section 206 of this title,

and (2) more than half his compensation for a repre-

sentative period (not less than one month) represents

commissions on goods or services. In determining the

proportion of compensation representing commis-

sions, all earnings resulting from the application of a

bona fide commission rate shall be deemed commis-

sions on goods or services without regard to whether

the computed commissions exceed the draw or guar-

antee.

SS. 8: 8 &.@

(la)

2. 29 U.S.C. 213 (1970) provided in pertinent part:

Exemptions

2 2 2 =

(b) The provisions of section 207 of this title shall

not apply with respect to—

(10) any salesman, partsman, or mechanic primari-

ly engaged in selling or servicing automobiles, trail-

ers, trucks, farm implements, or aircraft if employed

by a nonmanufacturing establishment primarily en-

gaged in the business of selling such vehicles to ulti-

mate purchasers; or

*> + * * *

3. 29 U.S.C. 213 provides in pertinent part:

Exemptions

a ae ae ee

(b) Maximum hour requirements

The provisions of section 207 of this title shall not

apply with respect to—

* * * * *

(10)(A) any salesman, partsman, or mechanic pri-

marily 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; or

(B) any salesman primarily engaged in selling

trailers, boats, or aircraft, if he is employed by a non-

manufacturing establishment primarily engaged in the

business of selling trailers, boats, or aircraft to ulti-

mate purchasers; or

* * * * *

4. 29 U.S.C. 259 provides in pertinent part:

Reliance in future on administrative rulings, etc.

(a) In any action or proceeding based on any act

or omission on or after May 14, 1947, no employer

shall be subject to any liability or punishment for or

on account of the failure of the employer to pay mini-

mum wages or overtime compensation under the Fair

Labor Standards Act of 1938, as amended [29 U.S.C.

201 et seq.], the Walsh-Healey Act, or the Bacon-

Davis Act, if he pleads and proves that the act or

omission complained of was in good faith in conformity

with and in reliance on any written administrative

regulation, order, ruling, approval, or interpretation,

of the agency of the United States specified in subsec-

tion (b) of this section, or any administrative practice

or enforcement policy of such agency with respect to

the class of employers to which he belonged. Such a

defense, if established, shall be a bar to the action or

proceeding, notwithstanding that after such act or

omission, such administrative regulation, order, rul-

ing, approval, interpretation, practice, or enforcement

policy is modified or rescinded or is determined by

judicial authority to be invalid or of no legal effect.

(b) The agency referred to in subsection (a) of

this section shall be—

(1) in the case of the Fair Labor Standards Act

of 1938, as amended [29 U.S.C. 201 et seq.]—the

Administrator of the Wage and Hour Division of

the Department of Labor;

* * * * *

5. 29 C.F.R. ¥79.372 (1971) provided in pertinent

part:

Nonmanufacturing establishments with certain exempt

employees under section 13(b)(10).

*_*+ *+ * *

used in section 13(b)(10), a salesman is an employee

who is employed for the purpose of and is primarily

engaged in making sales or obtaining orders or con-

tracts for sale of the vehicles or farm implements

which the establishment is primarily engaged in sell-

ing. Work performed incidental to and in conjunction

with the employee’s own sales or solicitations, includ-

ing incidental deliveries and collections, is regarded as

within the exemption.

(2) As used in section 13(b)(10), a partsman is any

employee employed for the purpose of and primarily

engaged in requisitioning, stocking, and dispensing

parts.

(3) As used in section 13(b)(10), a mechanic is any

employee primarily engaged in doing mechanical work

(such as get ready mechanics, automotive, truck, farm

implement, or aircraft mechanics, body or fender

mechanics, used car reconditioning mechanics, and

wrecker mechanics) in the servicing of an automobile,

trailer, truck, farm implement, or aircraft for its use

and operation as such. This includes mechanical work

required for safe operation as a vehicle, farm imple-

ment, or aircraft. The term does not include employ-

ees primarily performing such nonmechanical work as

washing, cleaning, painting, polishing, tire changing,

installing seat covers, dispatching, lubricating, or

other nonmechanical work. Wrecker mechanic means

a service department mechanic who goes out on a tow

or wrecking truck to perform mechanical servicing or

repairing of a customer’s vehicle away from the shop,

or to bring the vehicle back to the shop for repair

service. A tow or wrecker truck driver or helper who

performs no mechanical repair work is not exempt.

When employed by an establishment qualifying under

section 13(b)(10) which sells and services trailers,

mechanics primarily engaged in servicing the trailers

for their use and operation as such may qualify for the

exemption. “Trailers” include a wide variety of non-

powered vehicles used for industrial, commercial, or

personal transport or travel on the highways by at-

taching the vehicle to the rear of a separate powered

vehicle. It is not yet clear under what circumstances

and to what extent so-called “mobile homes” designed

for residential uses other than in connection with the

owner’s travel can qualify as “trailers” within the

meaning of the statute. (Compare Snell v. Quality

Mobile Home Brokers (D.S.C.), 18 WH Cases 875,

with Wirtz v. Louisiana Trailer Sales, 294 F Supp. 76

(E.D. La.).) However, if and to the extent that they

are operated and used as trailers, mechanics servicing

them for such operation and use would appear to be

performing work within the purview of the exemption

provided for mechanics in section 13(b)(10), to the

same extent as mechanics servicing automobiles, ordi-

nary travel, boat, or camping trailers, trucks, and

truck or tractor trailers for use and operation as such.

On the other hand, there is no indication in the statu-

tory language or the legislative history of any intent

to provide exemption for mechanics whose work is

directed to the habitability as a residence of a dwell-

ing to be used as such on a fixed site in a particular

locality, merely because the home is so designed that

it may be moved to another location over the highways

more readily than the traditional types of residential

structures. Accordingly, servicemen checking, servic-

ing, or repairing the plumbing, electrical, heating, air

conditioning or butane gas systems, the doors, win-

dows, and other structural features of mobile homes to

make them habitable or more habitable as residences

are, while so engaged, not deemed to qualify as “me-

chanic(s) * * * servicing * * * trailers” within the

meaning of section 13(b)(19).

(4) Employees variously described as service

manager, service writer, service advisor, or service

salesman who are not themselves primarily engaged

in the work of a salesman, partsman, or mechanic as

described above are not exempt under section

13(b)(10). This is true despite the fact that such an

employee’s principal function may be disagnosing [sic]

the mechanical condition of vehicles brought in for

repair, writing up work orders for repairs authorized

by the customer, assigning the work to various em-

ployees and directing and checking on the work of

mechanics.

(d) Primarily engaged. As used in section

13(b)(10), primarily engaged means the major part or

over 50 percent of the salesman’s partsman’s, or me-

chanic’s time must be spent in selling or servicing the

enumerated vehicles. As applied to the establishment,

primarily engaged means that over half of the estab-

lishment’s annual dollar volume of sales made or busi-

ness done must come from sales of the enumerated

vehicles.

6. 29 C.F.R. 779.372 provides in pertinent part:

Nonmanufacturing establishments with certain exempt

employees under section 13(b)(10).

x* * * *

used in section 13(b)(10)(A), a salesman is an employ-

ee who is employed for the purpose of and is primarily

engaged in making sales or obtaining orders or con-

tracts for sale of the automobiles, trucks, or farm

implements that the establishment is primarily en-

gaged in selling. As used in section 13(b)(10)(B), a

salesman is an employee who is employed for the

purpose of and is primarily engaged in making sales

or obtaining orders or contracts for sale of trailers,

boats, or aircraft that the establishment is primarily

engaged in selling. Work performed incidental to and

in conjunction with the employee’s own sales or solici-

tations, including incidental deliveries and collections,

is regarded as within the exemption.

(2) As used in section 13(b)(10)(A), a partsman is

any employee employed for the purpose of and pri-

marily engaged in requisitioning, stocking, and dis-

pensing parts.

(3) As used in section 13(b)(10)(A), a mechanic is

any employee primarily engaged in doing mechanical

work (such as get ready mechanics, automotive, truck,

or farm implement mechanics, used car reconditioning

mechanics, and wrecker mechanics) in the servicing of

an automobile, truck or farm implement for its use

and operation as such. This includes mechanical work

required for safe operation, as an automobile, truck,

or farm implement. The term does not include em-

ployees primarily performing such nonmechanical

work as washing, cleaning, painting, polishing, tire

changing, installing seat covers, dispatching, lubricat-

ing, or other nonmechanical work. Wrecker mechanic

means a service department mechanic who goes out on

a tow or wrecking truck to perform mechanical servic-

ing or repairing of a customer’s vehicle away from the

shop, or to bring the vehicle back to the shop for re-

pair service. A tow or wrecker truck driver or helper

who primarily performs nonmechanica! repair work is

not exempt.

(d) Primarily engaged. As used in section

13(b)(10), primarily engaged means the major part or

over 50 percent of the salesman’s, partsman’s, or me-

chanic’s time must be spent in selling or servicing the

enumerated vehicles. As applied to the establishment,

primarily engaged means that over half of the estab-

lishments annual dollar volume of sales made or busi-

ness done must come from sales of the enumerated

vehicles.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.