GRABER, Circuit Judge:
On remand from the Supreme Court, Encino Motorcars, LLC v. Navarro, ___ U.S. ___, 136 S.Ct. 2117, 195 L.Ed.2d 382 (2016), we must consider anew whether the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201-219, requires automobile dealerships to pay overtime compensation to service advisors. The district court held that service advisors fall within the exemption
Defendant Encino Motorcars, LLC, sells and services new and used Mercedes-Benz automobiles.
Plaintiffs allege that Defendant has violated the FLSA by failing to pay them overtime wages. The district court dismissed the claim, and Plaintiffs timely appealed.
We reversed. Navarro v. Encino Motorcars, LLC, 780 F.3d 1267 (9th Cir. 2015). We held that a regulation promulgated by the Department of Labor in 2011 reasonably interpreted the statutory exemption not to encompass service advisors. Id. at 1271-77. Applying the principles of agency deference described in Chevron, U.S.A. Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), we deferred to the agency's interpretation. Navarro, 780 F.3d at 1277.
The Supreme Court granted certiorari and held that we erred by applying the Chevron framework. Encino Motorcars, 136 S.Ct. at 2124-27. The Court concluded that
Id. at 2127 (citation format altered).
Congress enacted the FLSA in 1938 to "protect all covered workers from substandard wages and oppressive working hours." Barrentine v. Ark.-Best Freight Sys., Inc., 450 U.S. 728, 739, 101 S.Ct. 1437, 67 L.Ed.2d 641 (1981). To that end, 29 U.S.C. § 206 imposes a minimum wage requirement, and § 207 requires the payment of overtime compensation for hours exceeding a standard workweek. But not all workers are covered by the Act's provisions. Subsection 213(a) lists categories of employees who are exempt from both the minimum-wage and overtime-compensation requirements. Subsection 213(b) lists categories of employees who are exempt from the overtime-compensation requirement only.
In 1966, Congress repealed § 213(a)(19) but added paragraph (b)(10). Fair Labor Standards Amendments of 1966, Pub. L. No. 89-601, § 208, 80 Stat. 830, 836. The new provision exempted only the following employees from the overtime-compensation requirement:
29 U.S.C. § 213(b)(10) (1966). In effect, unless a separate exemption applied, the 1966 amendments narrowed the 1961 exemption and required dealerships to pay a minimum wage to all employees and to pay overtime compensation to all employees except those listed in § 213(b)(10).
In 1970, the Department of Labor issued a regulation defining the terms of § 213(b)(10). 29 C.F.R. § 779.372. The agency defined "salesman" to encompass only those salesmen who sold vehicles. Id. § 779.372(c)(1). Under the agency's interpretation, the exemption did not encompass service advisors. Id.; see also id. § 779.372(c)(4) (1970).
In 1974, Congress amended § 213(b)(10) to its present-day form to exclude from the overtime-compensation requirement the following employees:
29 U.S.C. § 213(b)(10) (2016); Fair Labor Standards Amendments of 1974, Pub. L. No. 93-259, § 14, 88 Stat. 55, 61. The 1974 amendments had no effect on the text pertinent to car dealerships — the same exemptions as in 1966 continued to apply.
In 1978, the Department of Labor issued an opinion letter stating that, contrary to the agency's regulation, service advisors were exempt under 29 U.S.C. § 213(b)(10)(A). Dep't of Labor, Wage & Hour Div., Opinion Letter No. 1520 (WH-467), 1978 WL 51403 (July 28, 1978). In 1987, the agency amended its Field Operations Handbook along the same lines, stating in an Insert that the agency would "no longer deny the [overtime] exemption" for service advisors. Dep't of Labor, Wage & Hour Div., Field Operations Handbook, Insert No. 1757, 24L04-4(k) (Oct. 20, 1987).
In 2008, the Department of Labor proposed to amend its formal regulation — which had remained the same since 1970 despite the agency's shift in position — to conform to its practice of allowing the exemption for service advisors. Updating Regulations Issued Under the Fair Labor Standards Act, 73 Fed. Reg. 43,654-01 (July 28, 2008). After receiving public comments, however, the agency issued a final rule in 2011 that reaffirmed the agency's
The parties dispute whether we owe deference to the Secretary of Labor's interpretation that the statute does not exempt service advisors. Plaintiffs argue that deference under Skidmore v. Swift & Co., 323 U.S. 134, 65 S.Ct. 161, 89 L.Ed. 124 (1944), is appropriate. Defendant urges us to give no weight to the agency's interpretation. We decline to resolve this dispute because, as we explain below, the answer does not affect the outcome. Instead, we assume without deciding that we must give no weight to the agency's interpretation and the regulation, and we "interpret the statute in the first instance."
The FLSA exempts from the overtime-compensation requirement "any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trucks, or farm implements, if he is employed by a nonmanufacturing establishment primarily engaged in the business of selling such vehicles or implements to ultimate purchasers." 29 U.S.C. § 213(b)(10)(A). Defendant is an automobile dealership within the meaning of the exemption. We limit our discussion to the exemption's coverage of employees of an automobile dealership. Thus, the relevant statutory passage is: "any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles."
Unless defined by the FLSA, we consider the "ordinary, contemporary, common meaning" of the terms at the time that Congress added the relevant clause — 1966. Perrin v. United States, 444 U.S. 37, 42, 100 S.Ct. 311, 62 L.Ed.2d 199 (1979). To determine the common meaning, we consult dictionaries and other sources in use in 1966. Taniguchi v. Kan Pac. Saipan, Ltd., 566 U.S. 560, 132 S.Ct. 1997, 2002-04, 182 L.Ed.2d 903 (2012). For an understanding of job descriptions, we look to the 1966-1967 edition of the Department of Labor, Bureau of Statistics, Occupational Outlook Handbook ("OOH"). See, e.g., United States v. Charles, 722 F.3d 1319, 1324 (11th Cir. 2013) (consulting the Occupational Outlook Handbook).
We proceed as follows. First, we conclude that, under the most natural reading of the statute, Congress did not intend to exempt service advisors. Second, even if the text were ambiguous, the legislative history confirms that Congress intended to exempt only salesmen selling cars, partsmen servicing cars, and mechanics servicing cars. Congress did not intend to exempt service advisors.
In 1966, Congress repealed the exemption for all employees of an automobile dealership and replaced it with a limited exemption for only three specific vocations: salesmen, partsmen, and mechanics.
• Automobile body repairmen
•
• Automobile painters
•
•
• Automobile service advisors
• Automobile upholsterers
• Bookkeeping workers
• Cashiers
• Janitors
• Purchasing agents
• Shipping and receiving clerks
OOH at XIII-XVIII (Table of Contents).
Hence, looking only at the statutory exemption's list of job titles, service advisors were excluded. Congress' choice to exempt three — not four — job titles suggests that service advisors are not exempt. If, as Defendant posits, Congress intended to exempt service advisors, it could have included "service advisors" in the statutory list. In sum, the most natural reading of the exemption is that Congress exempted only three commonly understood job titles — automobile salesmen, partsmen, and mechanics — and Congress therefore excluded service advisors.
It is possible to read the exemption's list of job titles more broadly, to encompass all persons whose functional roles meet the dictionary definitions of the terms "salesman," "partsman," or "mechanic."
But even assuming that Congress intended a broad interpretation of the term "salesman," not every "salesman" is exempt; the statute covers only those who are "primarily engaged in selling or servicing automobiles." 29 U.S.C. § 213(b)(10)(A). We therefore consider next whether service advisors primarily engage in selling or servicing cars.
A service advisor clearly is not a "salesman ... primarily engaged in selling
We turn, then, to whether service advisors are "primarily engaged in ... servicing automobiles." We begin with the contemporary meaning, in 1966, of the statute's terms. "Primarily" means "essentially; mostly; chiefly; principally."
Whether we look to the contemporaneous dictionary definitions or to the terms of the phrase itself, the phrase most naturally encompasses only those who are actually occupied in the repair and maintenance of cars — the partsmen and mechanics who, for example, repair defective brakes or flush the transmission. A service advisor neither performs any repairs nor provides any maintenance. Instead, a service advisor "wait[s] on customers who bring their automobiles in for maintenance and repairs." OOH at 314. The service advisor "confers with the customer to determine his service needs, and arranges for a mechanic to do the work." Id. Accordingly, service advisors are not primarily engaged in servicing automobiles.
Defendant suggests that we adopt a more expansive definition, one that encompasses all employees who are "integral" to the customer's overall experience of having a car serviced. Supp. Brief for Defendant-Appellee at 14 (filed Aug. 16, 2016). The statutory text is arguably flexible enough to accommodate Defendant's suggestion. Using the dictionary definitions most favorable to Defendant, the exemption encompasses those principally "involved" in "supplying maintenance and repair." If one interprets "supplying" to mean "the overall process of supplying," then service advisors can be said, in a general sense, to be "primarily engaged in ... servicing automobiles."
But the fact "[t]hat a definition is broad enough to encompass one sense of a word does not establish that the word is ordinarily understood in that sense." Taniguchi, 132 S.Ct. at 2003. Defendant's interpretation represents a considerable stretch of the ordinary meaning of the statute's words. We usually do not say that we primarily engage in an activity that we do not perform personally (and that we may lack the skills to perform). We typically say that we primarily engage in an activity
Defendant nevertheless asserts that we must adopt its broad definition because a narrower interpretation would read "partsman" out of the statute. Defendant contends that, because partsmen do not actually perform the repairs and maintenance, Congress must have intended to include all employees involved in the overall process of providing repair and maintenance services. We are unpersuaded.
The Occupational Outlook Handbook described the position of an "automobile parts counterman" who is employed by automobile dealers. OOH at 312-14. Parts countermen may spend some time selling parts to customers. Id. at 312. But parts countermen "employed by automobile and truck dealers ... may spend most of their time supplying parts to mechanics employed by the dealer." Id.; see also Brief for Int'l Ass'n of Machinists and Aerospace Workers as Amicus Curiae Supporting Respondents in Encino Motorcars, 2016 WL 1388060, at *28 ("A partsman generally works at one of two counters: the back counter, which opens to the shop where the mechanics work or the front counter, which opens into the dealership to an area where customers may purchase accessories or parts that will not be installed by the dealership."). "By knowing how to use parts catalogs and by knowing the layout of the stockroom, he can readily find any one of several thousand items." OOH at 312. A parts counterman also uses specialized equipment to test parts, to determine interchangeability of parts, and to repair parts. Id. at 312-13.
Accordingly, Defendant's premise is wrong: Partsmen "may repair parts, using equipment such as brake riveting machines, brake drum lathes, valve refacers, and engine head grinders." OOH at 313. Under any definition, fixing a defective part qualifies as servicing a car. Partsmen also "may use micrometers, calipers, fan-belt measurers, and other devices to measure parts for interchangeability. They may also use coil-condenser testers, spark plug testers, and other types of testing equipment to determine whether parts are defective." Id. at 312-13. Those hands-on tasks are qualitatively indistinguishable from — if not identical to — the work of a mechanic. Similarly, partsmen use their expert knowledge of parts, parts catalogs, and the stockroom to determine an appropriate replacement part and locate it for a mechanic — tasks that contribute directly to the actual repair of a car. Because most of the common tasks of a partsman easily meet the ordinary meaning of primarily engaging in servicing, we are not compelled to accept Defendant's broad interpretation of the exemption.
Our interpretive task could end here, with the words of the statute as commonly understood in 1966. But, to ensure that we have not overlooked a relevant way of reading § 213(b)(10)(A), we will examine that provision in light of applicable principles of statutory construction.
Our interpretation comports with a holistic reading of the statutory exemption. See, e.g., Graham Cty. Soil & Water Conservation Dist. v. U.S. ex rel. Wilson, 559 U.S. 280, 290, 130 S.Ct. 1396, 176 L.Ed.2d 225 (2010) ("Courts have a duty to construe statutes, not isolated provisions." (internal quotation marks omitted)); see also Sturgeon v. Frost, ___ U.S. ___, 136 S.Ct. 1061, 1070, 194 L.Ed.2d 108 (2016) ("It is a fundamental canon of statutory construction that the words of a statute must be read in their context ..." (internal quotation marks omitted)). Read literally, the exemption encompasses six categories of employees:
Salesman Partsman Mechanic primarily primarily primarily engaged in engaged in engaged in selling selling selling Salesman Partsman Mechanic primarily primarily primarily engaged in engaged in engaged in servicing servicing servicing
Three of the literal categories describe common employees at a dealership: salesmen selling cars, partsmen servicing cars, and mechanics servicing cars. A "salesman... primarily engaged in selling ... automobiles" neatly describes a car salesman.
Moreover, we know that Congress did not intend for us to give effect to all six literal categories. Read literally, the statute exempts partsmen and mechanics primarily engaged in selling cars, but those categories do not exist in the real world. Neither partsmen nor mechanics occupy themselves regularly, let alone most of the time, with selling cars. By definition, they spend most of their time repairing cars, maintaining cars, repairing parts, determining interchangeability of parts, finding suitable replacement parts in the stockroom, and so on. Congress indisputably did not intend to connect "partsman" and "mechanic" with "selling" automobiles; Congress intended to connect "partsman" and "mechanic" only with "servicing" automobiles.
Putting it all together, the most natural reading of the statute is that Congress intended the gerunds — selling and servicing — to be distributed to their appropriate subjects — salesman, partsman, and mechanic. A salesman sells; a partsman services; and a mechanic services.
At first blush, it may seem odd for Congress to choose phrasing that, read literally, joins nouns with inapplicable verbs. But Congress sometimes makes that choice. See, e.g., 16 U.S.C. § 742c(e) (referring to "the construction or repair of vessels lost, destroyed, or damaged" by an earthquake); see also Brief for Respondents in Encino Motorcars, 2016 WL 1298032, app. D (listing scores of statutory phrases using this distributive construction). Scholars and courts have recognized this method of distributive phrasing: "Where a sentence contains several antecedents and several consequents, courts read them distributively and apply the words to the subjects which, by context, they seem most properly to relate." 2A Norman Singer et al., Sutherland Statutes and Statutory Construction § 47:26 (7th ed. Supp. Nov. 2016); see id. at n.1 (collecting cases); see also Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 214 (2012) ("Distributive phrasing applies each expression to its appropriate referent."); id. at 214-16 (describing cases that applied the principle).
The most natural reading of these statutes is not that Congress wanted to give legal effect to each literal category. Rather, Congress merely used expedient wording to avoid tedious repetition of surrounding text, with the expectation that courts would read the statutes sensibly. This statute provides a good example. Congress could have separated out the treatment of salesmen from the treatment of partsmen and mechanics. But that would have required repeating the "primarily engaged in" text, the list of vehicles — "automobiles, trailers, trucks, farm implements, or aircraft" — and the clause concerning employment at a dealership — "if employed by a nonmanufacturing establishment primarily engaged in the business of selling such vehicles to ultimate purchasers." 29 U.S.C. § 213(b)(10) (1966). Instead, Congress trusted courts to recognize the obvious: Congress meant to exempt salesmen selling, not repairing, cars; and Congress meant to exempt partsmen and mechanics repairing, not selling, cars. Thus, the statute leaves only three categories of exempt employees:
Salesman PartsmanMechanicprimarilyprimarilyprimarilyengaged inengaged inengaged insellingsellingsellingSalesmanPartsman Mechanicprimarilyprimarily primarilyengaged inengaged in engaged inservicingservicing servicing
We find Defendant's expansive interpretation particularly implausible in light of the longstanding rule that the exemptions in § 213 of the FLSA "are to be narrowly construed against the employers seeking to assert them." Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392, 80 S.Ct. 453, 4 L.Ed.2d 393 (1960); accord Mitchell v. Ky. Fin. Co., 359 U.S. 290, 295, 79 S.Ct. 756, 3 L.Ed.2d 815 (1959) (holding that the principle of narrow construction of the FLSA's exemptions is "well settled"). We must apply exemptions only to "those [employees] plainly and unmistakably within [the FLSA's] terms." A.H. Phillips, Inc. v. Walling, 324 U.S. 490, 493, 65 S.Ct. 807, 89 L.Ed. 1095 (1945). In order to conclude that § 213(b)(10)(A) encompasses service advisors, we would be required to do the opposite — construe the exemption broadly. We are bound by Supreme Court precedent to construe the exemption narrowly.
In recent years, the Supreme Court has acknowledged the rule of narrow construction with respect to the exemptions listed in § 213, but the Court has held that the rule does not apply to interpretations of other provisions of the FLSA, such as the general definitions codified in § 203. Sandifer v. U.S. Steel Corp., ___ U.S. ___, 134 S.Ct. 870, 879 n.7, 187 L.Ed.2d 729 (2014); Christopher v. SmithKline Beecham Corp., 567 U.S. 142, 132 S.Ct. 2156, 2172 n.21, 183 L.Ed.2d 153 (2012). Because this case involves interpretation of terms appearing in § 213 and not defined in § 203, the Supreme Court's longstanding principle of narrow construction applies here. We recognize that some members of the Supreme Court have questioned the soundness of the rule of narrow construction. E.g., Encino Motorcars, 136 S.Ct. at 2131 (Thomas, J., dissenting). But we may not disregard the Court's existing, binding precedent. See, e.g., Bosse v. Oklahoma, ___ U.S. ___, 137 S.Ct. 1, 1, 196 L.Ed.2d 1 (2016) (per curiam) ("It is this Court's prerogative alone to overrule one of its precedents." (internal quotation marks and brackets omitted)); id. ("Our decisions remain binding precedent until we see fit to reconsider them, regardless of whether subsequent cases have raised doubts about their continuing vitality." (internal quotation marks omitted)).
As we have noted, in 1966, Congress enacted new § 213(b)(10), exempting from the overtime-compensation requirement "any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles" at a dealership. During hearings before subcommittees of the House and the Senate, the National Automobile Dealership Association had sought an overtime exemption for two specific categories of employees: automobile salesmen and mechanics.
The legislative history thus contains repeated, detailed concerns about applying the overtime-compensation requirement to automobile salesmen, partsmen, and mechanics. By contrast, Defendant does not direct us to any portion of the legislative history that reveals a similar concern for
Viewed in light of the clear concerns about overtime compensation for automobile salesmen, partsmen, and mechanics, the legislative history's apparent silence on concerns about overtime pay for service advisors strongly suggests that Congress did not intend to exempt service advisors. If Congress meant for the exemption to encompass service advisors, we would expect that concern to be plain from — or at least mentioned in — the legislative record of the 1966 amendments.
In 1974, Congress amended paragraph (b)(10) to its present-day form. 29 U.S.C. § 213(b)(10) (2016); 88 Stat. at 61. The law created new subparagraph (b)(10)(A), which exempted "any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trucks, farm implements" and new subparagraph (b)(10)(B), which exempted "any salesman primarily engaged in selling trailers, boats, or aircraft."
Both the House and the Senate were provided with written summaries of the revised exemption. In the House, Representative Dent's report described the overall effect of the new § 213(b)(10)(A) & (B):
120 Cong. Rec. 8602 (1974) (emphasis added). That summary makes clear that "salesman" applies only to "selling" goods. There is no mention of salesmen primarily engaged in servicing automobiles, even though the literal terms of the exemption could encompass that category. Instead, the summary applied only the verb "selling" to the subject "salesman."
In the Senate, Senator Williams' report described the changes between the then-existing exemption and the new § 213(b)(10)(A) & (B):
120 Cong. Rec. 8763 (1974). That summary also makes clear that "salesman" applies only to "selling" goods. Reviewing the words of the statute literally, as Defendant urges us to do, the amendment also repealed the exemption for salesmen primarily engaged in servicing trailers and aircraft. But the summary does not mention
So, too, did the National Automobile Dealers Association. During hearings before subcommittees of the House and the Senate, the Association submitted a prepared statement that urged Congress not to change § 213(b)(10) as it applied to salesmen, partsmen, and mechanics at automobile dealerships.
Id. (emphasis added).
As with the 1966 amendments, Defendant has not pointed us to any passage of the legislative history suggesting that Congress intended to exempt service advisors, and we have found none. To the contrary, the only reference to service advisors that we have found suggests that Congress had no concern about overtime compensation for service advisors.
In sum, the legislative history of the 1966 amendments and of the 1974 amendments reveal clear concerns with applying the overtime-compensation requirement to exactly three categories of a dealership's employees: automobile salesmen, partsmen, and mechanics. The extensive legislative record — tens of thousands of pages spanning a decade and a half — contains hardly a mention of service advisors, and the few references that exist display no concern about overtime compensation for service advisors. We are firmly persuaded that Congress did not intend to exempt service advisors.
After a thorough, de novo review of congressional intent, we hold that the exemption in § 213(b)(10)(A) does not encompass service advisors. We acknowledge that our holding conflicts with published decisions by the Fourth and Fifth Circuits and by the Supreme Court of Montana. Walton v. Greenbrier Ford, Inc., 370 F.3d 446 (4th Cir. 2004); Brennan v. Deel Motors,
This opinion addresses only Plaintiffs' federal claim for overtime compensation. For the reasons given in our earlier opinion, id. at 1270 n.2, we affirm the dismissal of all other federal claims, and we reverse the dismissal of the state-law claims.