FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

HECTOR NAVARRO; ANTHONY

PINKINS; KEVIN MALONE; and

REUBEN CASTRO,

Plaintiffs-Appellants,

v.

ENCINO MOTORCARS, LLC,

erroneously sued as Mercedes Benz

of Encino, a corporation,

Defendant-Appellee.

No. 13-55323

D.C. No.

2:12-cv-08051-

RGK-MRW

OPINION

Appeal from the United States District Court

for the Central District of California

R. Gary Klausner, District Judge, Presiding

Argued and Submitted

February 11, 2015—Pasadena, California

Filed March 24, 2015

Before: Susan P. Graber and Kim McLane Wardlaw,

Circuit Judges, and James C. Mahan,* District Judge.

Opinion by Judge Graber

* * The Honorable James C. Mahan, United States District Judge for the

District of Nevada, sitting by designation.
2 NAVARRO V. ENCINO MOTORCARS

SUMMARY**

Labor Law

Affirming in part and reversing the dismissal of an action

under the Fair Labor Standards Act, the panel held that

“service advisors” who worked at a car dealership did not fall

within a statutory exemption under 29 U.S.C.

§ 213(b)(10)(A) from the Act’s overtime pay requirements

for “any salesman, partsman, or mechanic primarily engaged

in selling or servicing automobiles.”

Disagreeing with the Fourth and Fifth Circuits, the panel

deferred to the United States Department of Labor’s

regulatory definitions, set out at 29 C.F.R. § 779.372(c),

because the statute was ambiguous, and under the Chevron

standard, the regulation was reasonable.

The panel reversed the dismissal of the FLSA overtime

claim and supplemental state-law claims. It affirmed the

dismissal of other federal claims not challenged on appeal.

** This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.
NAVARRO V. ENCINO MOTORCARS 3

COUNSEL

S. Keven Steinberg (argued), Fink & Steinberg, Los Angeles,

California, for Plaintiffs-Appellants.

Todd B. Scherwin (argued), Karl R. Lindegren, and Colin P.

Calvert, Fisher & Phillips LLP, Irvine, California, for

Defendant-Appellee.

OPINION

GRABER, Circuit Judge:

We consider here a question of first impression for our

circuit: Are “service advisors” who work at a car dealership

exempt from the overtime pay requirements of the Fair Labor

Standards Act (FLSA) of 1938, 29 U.S.C. §§ 201–219, under

29 U.S.C. § 213(b)(10)(A), which exempts “any salesman,

partsman, or mechanic primarily engaged in selling or

servicing automobiles”? Reviewing de novo, Fortyune v.

City of Lomita, 766 F.3d 1098, 1101 (9th Cir. 2014), petition

for cert. filed, ___ U.S.L.W. ___ (U.S. Jan. 26, 2015) (No.

14-920), we answer that question “no” and, accordingly,

reverse the district court’s holding to the contrary.

FACTUAL AND PROCEDURAL HISTORY

Defendant Encino Motorcars, LLC, sells and services new

and used Mercedes-Benz automobiles.1 Defendant employed

1 Because the district court dismissed this case under Federal Rule of

Civil Procedure 12(b)(6), we take the facts alleged in the complaint as

true. Brown v. Elec. Arts, Inc., 724 F.3d 1235, 1247 (9th Cir. 2013). 
4 NAVARRO V. ENCINO MOTORCARS

or employs Plaintiffs Hector Navarro, Mike Shirinian,

Anthony Pinkins, Kevin Malone, and Reuben Castro as

“service advisors.” The complaint alleges:

The job duties and obligations of . . .

Service Advisors . . . are to meet and greet

Mercedes Benz owners as they enter the

service area of the dealership and then to

evaluate the service and/or repair needs of the

vehicle owner in light of complaints given

them by these vehicle owners. Upon

evaluation of the service needs of the vehicle,

the Service Advisors . . . then solicit and

suggest[] that certain service[s] be conducted

on the vehicle to remedy the complaints of the

vehicle owner by conducting certain repairs at

[Defendant’s dealership] and through

[Defendant’s] own mechanics. The Service

Advisors . . . are also duty bound and

obligated by [Defendant] to solicit and

suggest that supplemental service be

performed on the vehicle above and beyond

that which is required in response to the initial

complaints of the vehicle owner. The Service

Advisors . . . then write up an estimate for the

repairs and services and provide[] that to the

vehicle owner. The vehicle is then taken to

the mechanics at [Defendant] for repair and

maintenance.

As required by [Defendant] and

oftentimes while the vehicle is with

[Defendant’s] mechanics, the Service

Advisors . . . will then call the vehicle owner
NAVARRO V. ENCINO MOTORCARS 5

and solicit and suggest that additional work be

performed on the vehicle at additional cost.

Defendant pays service advisors on a commission basis only;

Plaintiffs receive neither an hourly wage nor a salary.

In 2012, Plaintiffs filed this action alleging, among other

things, that Defendant has violated the FLSA by failing to

pay overtime wages. The district court dismissed the

overtime claim because, the court concluded, Plaintiffs fall

within the FLSA’s exemption for “any salesman, partsman,

or mechanic primarily engaged in selling or servicing

automobiles.” 29 U.S.C. § 213(b)(10)(A). Plaintiffs timely

appeal.2

DISCUSSION

Title 29 U.S.C. § 207(a)(1) requires that employers pay

time-and-a-half for hours worked in excess of 40 per

workweek. But § 213(b)(10)(A) provides that “[t]he

provisions of section 207 of this title shall not apply with

respect to . . . any salesman, partsman, or mechanic primarily

engaged in selling or servicing automobiles, trucks, or farm

implements, if he is employed by a nonmanufacturing

establishment primarily engaged in the business of selling

such vehicles or implements to ultimate purchasers.” 

Defendant, as a car dealership, is a “nonmanufacturing

 

2

 The court dismissed Plaintiffs’ other federal claims (claims 3, 5, and

7) on alternative grounds not challenged on appeal. For that reason, we

affirm the court’s dismissal of those claims. The court also exercised its

discretion under 28 U.S.C. § 1367(c) to dismiss Plaintiffs’ state-law

claims for lack of supplemental jurisdiction. Because we reverse the

dismissal of the overtime claim (claim 1), we also reverse the dismissal of

the state-law claims.
6 NAVARRO V. ENCINO MOTORCARS

establishment primarily engaged in the business of selling . . .

vehicles . . . to ultimate purchasers.” Id. The question is

whether each Plaintiff is a “salesman, partsman, or mechanic

primarily engaged in selling or servicing automobiles.” Id.

Plaintiffs argue that we must defer to the United States

Department of Labor’s 2011 regulatory definitions, set out at

29 C.F.R. § 779.372(c). 76 Fed. Reg. 18,832-01 (Apr. 5,

2011). Those regulations state, in relevant part:

Salesman, partsman, or mechanic.

(1) As used in section 13(b)(10)(A), 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 automobiles, trucks, or farm

implements that the establishment is primarily

engaged in selling. . . .

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

mechanic is any employee primarily engaged

in doing mechanical work (such as get ready

mechanics, automotive, truck, or farm

implement mechanics, used carreconditioning

mechanics, and wrecker mechanics) in the

servicing of an automobile, truck or farm

implement for its use and operation as

such. . . .
NAVARRO V. ENCINO MOTORCARS 7

29 C.F.R. § 779.372(c). As the agency explained in 2011, the

regulatorydefinitions “limit[]the exemption to salesmen who

sell vehicles and partsmen and mechanics who service

vehicles.” 76 Fed. Reg. at 18,838. Because Plaintiffs do not

fit within any of those definitions, they are not exempt from

the FLSA’s overtime wage provisions. Defendant concedes

that Plaintiffs do not meet the regulatory definitions, but

counters that we should not defer to the regulation.

We conduct the familiar two-step inquiry to determine

whether to defer to the agency’s interpretation. McMaster v.

United States, 731 F.3d 881, 889 (9th Cir. 2013), cert. denied,

135 S. Ct. 160 (2014). “At step one, we ask ‘whether

Congress has directly spoken to the precise question at

issue.’” Id. (quoting Chevron, U.S.A., Inc. v. Natural Res.

Def. Council, Inc., 467 U.S. 837, 842 (1984)). If so, then the

inquiry is over, and we must give effect to the

“unambiguously expressed intent of Congress.” Chevron,

467 U.S. at 843. But if the statute is silent or ambiguous,

then we must determine, before step two, what level of

deference applies. McMaster, 731 F.3d at 889. “If we

determine that Chevron deference applies, then we move to

step two, where we will defer to the agency’s interpretation

if it is ‘based on a permissible construction of the statute.’” 

Id. (quoting Chevron, 467 U.S. at 843).

A. At Chevron Step One, the Statute is Ambiguous.

When construing a congressional enactment, “our inquiry

begins with the statutory text.” BedRoc Ltd. v. United States,

541 U.S. 176, 183 (2004). In addition, in the present context

we must apply the background rule that “[t]he FLSA is to be

construed liberally in favor of employees; exemptions are

narrowly construed against employers.” Haro v. City of Los
8 NAVARRO V. ENCINO MOTORCARS

Angeles, 745 F.3d 1249, 1256 (9th Cir.), cert. denied, 135 S.

Ct. 138 (2014). “FLSA exemptions . . . are to be withheld

except as to persons plainly and unmistakably within their

terms and spirit.”3Solis v. Washington, 656 F.3d 1079, 1083

(9th Cir. 2011) (internal quotation marks omitted). “An

employer who claims an exemption from the FLSA bears the

burden of demonstrating that such an exemption applies.” Id.

(internal quotation marks omitted).

As noted, the statute exempts “any salesman, partsman,

or mechanic primarily engaged in selling or servicing

automobiles.” 29 U.S.C. § 213(b)(10)(A). The statute does

not define the terms “salesman, partsman, or mechanic.” 

Examining the statutory text and applying canons of statutory

interpretation, we cannot conclude that service advisors such

as Plaintiffs are “persons plainly and unmistakably within

[the FLSA’s] terms and spirit,” Solis, 656 F.3d at 1083

(internal quotation marks omitted).

It is plausible to read the term “salesman” broadly and to

connect the term to “servicing automobiles”; that is, one

could consider a service advisor to be a “salesman . . .

primarily engaged in . . . servicing automobiles.” But, as

explained in more detail below, in Part C, it is at least as

plausible to read the nouns in a more cabined way: a

salesman is an employee who sells cars; a partsman is an

employee who requisitions, stocks, and dispenses parts; and

3 The rule that courts should construe the FLSA’s exemptions narrowly

originated in Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392 (1960). In

recent years, the Supreme Court has clarified that the presumption applies

only to the exemptions in § 213 and not more generally. Sandifer v. U.S.

Steel Corp., 134 S. Ct. 870, 879 n.7 (2014); Christopher v. SmithKline

Beecham Corp., 132 S. Ct. 2156, 2172 n.21 (2012).
NAVARRO V. ENCINO MOTORCARS 9

a mechanic is an employee who performs mechanical work

on cars. Service advisors do none of those things; they sell

services for cars. They do not sell cars; they do not stock

parts; and they do not perform mechanical work on cars.

It is not clear from the text of the statute whether

Congress intended broadly to exempt any salesman who is

involved in the servicing of cars or, more narrowly, only

those salesmen who are selling the cars themselves. Certainly

Congress did not exempt all employees of a car dealership;

for example, a bookkeeper who tracks invoices for car sales

and servicing is plainly not exempt, nor is a secretarial

employee who routes calls to the salesmen, partsmen, and

mechanics. Nor do canons of statutory interpretation aid

Defendant. To the contrary, the § 213 “exemptions are

narrowly construed against employers.” Haro, 745 F.3d at

1256.

In sum, the statutory text and canons of statutory

interpretation yield no clear answer to whether Congress

intended to include service advisors within the exemption. 

Because Congress has not “directly spoken to the precise

question at issue,” Chevron, 467 U.S. at 842, the statute is

ambiguous.

B. Chevron Provides the Appropriate Lens.

When a statute is ambiguous, then we must determine,

“prior to step two,” the appropriate standard: either the

Chevron test of reasonableness or a lower standard under

United States v. Mead Corp., 533 U.S. 218 (2001). 

McMaster, 731 F.3d at 889. Because we consider here a

regulation duly promulgated after a notice-and-comment

period, Chevron’s “reasonableness” standard applies. See,
10 NAVARRO V. ENCINO MOTORCARS

e.g., Renee v. Duncan, 623 F.3d 787, 795 (9th Cir. 2010)

(“The challenged federal regulation interprets a federal

statute. The regulation was adopted by the responsible

federal agency through notice and comment rulemaking. We

therefore apply the analytical framework outlined in

Chevron.”).

Nothing in the history of the regulation undermines that

conclusion. Indeed, the original version of the regulation,

promulgated in 1970, contained the same narrow definitions

of “salesman,” “partsman,” and “mechanic.” See 29 C.F.R.

§ 779.372(c)(1)–(3) (1970); see also Dep’t of Lab., Wage &

Hour Div., Opinion Letter No. 660, 66–69 Lab. Cas. (CCH)

¶ 30,652 (Aug. 4, 1967) (also providing the same narrow

definitions). Those regulatory definitions have not changed

in any relevant way since 1970. Because the agency’s

formal, regulatory position has not changed, the cases cited

by Defendant are not on point. In Christopher v. SmithKline

Beecham Corp., 132 S. Ct. 2156, 2165 (2012), the Supreme

Court addressed what level of deference to give to an

agency’s interpretation of its own regulations. Importantly,

the parties agreed that “the regulations themselves . . . [were]

entitled to deference under Chevron.” Id. Similarly, U.S.

Steel, 678 F.3d at 598–99, involved only opinion letters; the

agency had not issued formal regulations.

It is true that the Department of Labor occasionally has

adopted the broader definitions, urged by Defendant here, in

documents other than regulations. For example, the agency

issued an opinion letter in 1978 that defined a “salesman” to

encompass service advisors. Dep’t of Lab. Opinion Letter

No. WH-467, 1978 WL51403 (July 28, 1978). Similarly, the

agency amended its Field Operations Handbook in 1987

along the same lines. Field Operations Handbook, Dep’t of
NAVARRO V. ENCINO MOTORCARS 11

Lab., Wage & Hour Div., 24L04-4, Insert No. 1757 (Oct. 20,

1987).

The agency even proposed amending the formal

regulation to adopt the broader definitions. 73 Fed. Reg.

43,654-01, 43,658–59, 43,671 (July 28, 2008). But it

ultimately decided againstmaking that change after receiving

comments from the public and considering the relevant court

decisions. 76 Fed. Reg. at 18,838. The agency

“acknowledge[d] that there are strongly held views on several

of the issues presented in this rulemaking, and it has carefully

considered all of the comments, analyses, and arguments

made for and against the proposed changes in developing this

final rule.” Id. at 18,832. The regulatory history shows that

the Department of Labor has given this particular issue

considerable thought and has concluded that the better

reading of the statute is to “limit[] the exemption to salesmen

who sell vehicles and partsmen and mechanics who service

vehicles.” Id. at 18,838.

Moreover, even if we were to consider the agency’s 2011

final rule a change of position, we still would conclude that

Chevron supplies the appropriate standard of deference. As

the Supreme Court explained in FCC v. Fox Television

Stations, Inc., 556 U.S. 502 (2009), an agency is permitted to

change its position. Consistent with Fox, the agency here

expressly acknowledged that its position was contrary to its

earlier opinion letter, and the agency rationally explained

why, in its view, the court decisions to the contrary were

erroneous. Under Fox, 556 U.S. at 515–18, nothing more is

required. Cf. Perez v. Mortg. Bankers Ass’n, No. 13-1041,

2015 WL998535 (U.S. Mar. 9, 2015) (holding that an agency

may change its position in an interpretive rule without notice

and comment).
12 NAVARRO V. ENCINO MOTORCARS

The Department of Labor’s regulations consistently—for

45 years—have interpreted the statutory exemption to apply

narrowly. The agency reaffirmed that interpretation most

recently in 2011, after thorough consideration of opposing

views and after a formal notice-and-comment process. Under

these circumstances, Chevron provides the appropriate legal

standard.

C. At Chevron Step Two, the Regulation Is Reasonable.

“Under Chevron step two, if the agency’s interpretation

is a reasonable one, this court may not substitute its own

construction of the statutory provision.” CHW W. Bay v.

Thompson, 246 F.3d 1218, 1223 (9th Cir. 2001) (brackets and

internal quotation marks omitted). Here, the Department of

Labor has interpreted the statutory exemption to exclude

service advisors by choosing the narrower definition of the

term “salesman.” For the reasons described below, we

conclude that the agency has made a permissible choice. The

interpretation accords with the presumption that the § 213

exemptions should be construed narrowly. Haro, 745 F.3d at

1256. Moreover, we are mindful of our role as a reviewing

court: “The agency’s interpretation need not be the best

construction of the ambiguous statute.” Cervantes v. Holder,

772 F.3d 583, 591 (9th Cir. 2014).

We recognize that our decision to uphold the agency’s

interpretation conflicts with decisions of the Fourth and Fifth

Circuits, several district courts, and the Supreme Court of

Montana. Walton v. Greenbrier Ford, Inc., 370 F.3d 446 (4th

Cir. 2004); Brennan v. Deel Motors, Inc., 475 F.2d 1095 (5th

Cir. 1973); Brennan v. N. Bros. Ford, Inc., No. 40344, 1975

WL 1074 (E.D. Mich. Apr. 17, 1975) (unpublished), aff’d

sub. nom Dunlop v. N. Bros. Ford, Inc., 529 F.2d 524 (6th
NAVARRO V. ENCINO MOTORCARS 13

Cir. 1976) (table); Brennan v. Import Volkswagen, Inc., No.

W-4982, 1975 WL 1248 (D. Kan. Oct. 21, 1975)

(unpublished); Yenney v. Cass Cnty. Motors Co., No. 76-0-

294, 1977 WL 1678 (D. Neb. Feb. 8, 1977) (unpublished);

Thompson v. J.C. Billion, Inc., 294 P.3d 397 (Mont. 2013). 

We respectfully disagree with those decisions.

In Deel Motors and the district court opinions following

that case in the 1970s, courts held that service advisors are

exempt because their duties and pay structure are

“functionally similar” to those of the salesmen, partsmen, and

mechanics whom the statute expressly exempts. 475 F.2d at

1097. But those cases pre-dated Chevron and the modern

framework for deferring to an agency’s interpretation. See id.

(asking not whether the agency’s interpretation was

reasonable but, instead, determining for itself “the best

interpretation,” “the better reasoned interpretation,” and “a

common sense interpretation”); see also id. at 1098

(concluding that “[t]he intended scope of [the exemption] is

not entirely clear” but not considering deference to the

agency’s position). In that regard, we agree with the Fourth

Circuit that “[the] ‘functionally similar’ inquiry cannot be

squared with FLSA’s plain statutory and regulatory

language.” Walton, 370 F.3d at 451. Nothing in the statutory

text suggests that Congress meant to exempt salesmen,

partsmen, mechanics, and any other employees with

functionally similar job duties and pay structure; the text

exempts only certain salesmen, partsmen, and mechanics.

The closer question is whether the agency’s interpretation

is unreasonable because it is unduly restrictive, as the Fourth

Circuit held in Walton and the Montana Supreme Court held
14 NAVARRO V. ENCINO MOTORCARS

in Thompson.

4 Those courts read § 213(b)(10)(A) as follows: 

“any salesman, partsman, or mechanic primarily engaged in

[the general business of] selling or service automobiles.” 

Service advisors are “salesmen” because their job is to sell

services for cars. And service advisors are involved in the

general business of “servicing automobiles,” because their

role is to help customers receive mechanical work on their

cars. Accordingly, service advisors fall within the statutory

definition. In effect, those courts held that that is the only

reasonable reading of the statute.

The agency reads the statute differently: “any salesman,

partsman, or mechanic primarily [and personally] engaged in

selling or servicing automobiles.” Service advisors may be

“salesmen” in a generic sense, but they do not personally sell

cars and they do not personally service cars. Accordingly,

service advisors fall outside the statutory definition. In effect,

the agency reads the statute as exempting salesmen who sell

cars and partsmen and mechanics who service cars.

The Fourth Circuit rejected that interpretation as

unreasonable because, with respect to “salesman,” it

purportedly reads out of the statute the second half of the

disjunctive clause “‘selling or servicing automobiles.’” 

Walton, 370 F.3d at 452 (emphasis by Walton) (quoting

§ 213(b)(10)(A)); see also Thompson, 294 P.3d at 402 (“A

plain, grammatical reading of [the statute] makes clear that

the term ‘salesman’ encompasses a broader category of

employees than those only engaged in selling vehicles”

because of “[t]he use of the disjunctive ‘or’ between the

4 Walton considered the issue at Chevron step two, whereas Thompson

considered the issue at Chevron step one. Otherwise, the reasoning of

both courts is largely the same.
NAVARRO V. ENCINO MOTORCARS 15

words ‘selling or servicing’”). The Fourth Circuit’s point is

that, when Congress uses a list of disjunctive subjects (here,

“salesman, partsman, or mechanic”) followed by a list of

disjunctive verbs (here, “selling or servicing”), the ordinary

interpretation of that construction is that each subject is

linked with each verb. For example, if someone says, “if my

dogs or cats are eating or drinking, then I know not to pet

them,” we understand that phrase to be all-encompassing: the

speaker refrains from petting a dog that is eating or drinking

and a cat that is eating or drinking. It would contravene the

speaker’s intent to include, for example, only cats that were

eating but to exclude dogs that were eating.

Critically, however, that analysis depends on context. 

Consider this slightly modified hypothetical: “if my dogs or

cats are barking or meowing, then I know that they need to be

let out.” The Fourth Circuit’s grammatical interpretation of

that phrase would include a meowing dog and a barking cat. 

But most English speakers would interpret the sentence to

refer only to a barking dog and a meowing cat. At a

minimum, that implicit limitation would offer a reasonable

interpretation of the speaker’s intent.

Returning to the statute at hand, the agency’s

interpretation is reasonable. A natural reading of the text

strongly suggests that Congress did not intend that both verb

clauses would apply to all three subjects. For example, it is

hard to imagine, in ordinary speech, a “mechanic primarily

engaged in selling . . . automobiles.” That is, it seems that

Congress intended the subject “mechanic” to be connected to

only one of the two verb clauses, “servicing.” The nature of

the word “mechanic” strongly implies the actions that the

person would take—servicing. See American Heritage

College Dictionary 842 (3d ed. 2000) (defining “mechanic”
16 NAVARRO V. ENCINO MOTORCARS

as a “worker skilled in making, using, or repairing machines,

vehicles, and tools”). The same can be said of the subject

“salesman.” It is hard to imagine, in ordinary speech, a

“salesman . . . primarily engaged in . . . servicing

automobiles.” Congress likely intended the subject

“salesman” to be connected to only one of the two verb

clauses, “selling.” The nature of the word “salesman”

strongly implies the actions that the person would

take—selling. See id. at 1203 (defining “salesman” as a “man

who sells merchandise”).

It is important to note that the agency’s reading does not

render any term meaningless or superfluous. All three

subjects (salesman, partsman, and mechanic) and both verbs

(selling and servicing) retain meaning; it is just that some of

the verbs do not apply to some of the subjects. If the agency

read out a word altogether, its interpretation likely would be

unreasonable. See, e.g., Chubb Custom Ins. Co. v. Space

Sys./Loral, Inc., 710 F.3d 946, 966 (9th Cir. 2013) (“It is a

well-established rule of statutory construction that courts

should not interpret statutes in a way that renders a provision

superfluous.”), cert. denied, 134 S. Ct. 906 (2014). But the

regulation does not run afoul of that doctrine.

Non-textual indicators of congressional intent, such as

legislative history, are inconclusive. See Fournier v.

Sebelius, 718 F.3d 1110, 1123 (9th Cir. 2013) (holding that,

at Chevron step two, “legislative history permissibly may be

considered”), cert. denied, 134 S. Ct. 1501 (2014). We have

found no mention, in the relevant reports or hearings, of

service advisors, by name or by role. All references to

“salesman” appear to refer to an employee who sells cars

only. See, e.g., 112 Cong. Rec. S20,504 (Aug. 24, 1966)

(statement of Sen. Yarborough) (“It would not affect the
NAVARRO V. ENCINO MOTORCARS 17

salesman. He can go out and sell an Oldsmobile, a Pontiac,

or a Buick all day long and all night.”); id. (“The salesman

tries to get people mainly after their hours of work. In some

cases a man will leave his job, get his wife, and go to look at

automobiles. So the hours of a salesman are different.”).

In 1961, Congress exempted “any employee” of a car

dealership. 29 U.S.C. § 213(a)(19) (1961); Pub. L. No. 87-

30, § 9, 75 Stat. 65 (1961). A few years later, the EightyNinth Congress considered three bills on this topic. The first

bill, introduced in 1965, would have repealed altogether the

exemption for employees of dealerships. H.R. 8259, 89th

Cong. § 305 (introduced in House on May 18, 1965). The

next bill, also introduced in 1965, would have exempted from

overtime requirements “any salesman or mechanic employed

by” a car dealership. H.R. 10,518, 89th Cong. § 209

(introduced in House on Aug. 17, 1965); H.R. 10,518, 89th

Cong. § 209 (reported in House on Aug. 25, 1965). Neither

of those bills passed.

The final bill—H.R. 13,712—was enacted into law on

September 23, 1966.5 The first three versions, introduced in

the first half of 1966, exempted either “any salesman or

5 Defendant cites recent actions by the House of Representatives’

Committee on Appropriations in an apparent attempt to prevent

enforcement by the agency of the 2011 rule. That appropriations rider is

not relevant. What one house of Congress thinks, in the 2010s, about

enforcement priorities for the agency is entirely uninformative about the

intent of Congress when it enacted a statute in 1966. Moreover,

enforcement priorities do not change the content of the statute. If the

Appropriations Committee were to instruct, for instance, that it did not

want money spent on enforcing the statutes forbidding cultivation offewer

than five marijuana plants on federal lands, such cultivation would not

become lawful.
18 NAVARRO V. ENCINO MOTORCARS

mechanic” or “any salesman, mechanic, or partsman”

employed by a car dealership. H.R. 13,712, 89th Cong. § 209

(introduced in House on Mar. 16, 1965); id. (reported in

House on Mar. 29, 1966); id. (referred in Senate on May 27,

1966). The final three versions all qualified the list of

employees with the phrase, “primarily engaged in selling or

servicing automobiles.” Id. (reported in Senate on Aug. 23,

1966); id. (ordered to be printed in Senate on Aug. 25, 1966);

Pub. L. No. 89-601 (Sept. 23, 1966). We know, then, that

sometime in 1966 between May 27 and August 23, the Senate

added that phrase. Unfortunately, the legislative history is

silent on its meaning. See, e.g., 112 Cong. Rec. H21,940

(Sept. 7, 1966) (House Conference Report: “The conference

substitute conforms to the House provision regarding

partsmen, except that such exemption shall be available only

to salesmen, partsmen, and mechanics primarily engaged in

selling or servicing such vehicles.”); 112 Cong. Rec. S22,651

(Sept. 14, 1966) (“The resulting language follows the House

exemption—including the Senate floor amendment—butwith

a somewhat narrower scope.”); Sen. Comm. on Lab. & Pub.

Welf., Report No. 1487, p. 14, 89th Cong. (Aug. 23, 1966)

(“Committee Report”) (“Section 13(b) is amended to provide

an overtime exemption for salesmen and mechanics who are

primarily engaged in selling or servicing automobiles . . . .”).

The only possible exception, noted by Deel Motors,

475 F.2d at 1097 n.2, is found in the Committee Report on

August 23, 1966:

It is the intent of this exemption to exclude

from the coverage of section 7 all mechanics

and salesmen (other than partsmen) employed

by an automobile, trailer, truck, farm

implement or aircraft dealership even if they
NAVARRO V. ENCINO MOTORCARS 19

work in physically separate buildings or areas,

or even if, though working in the principal

building of the dealership, their work relates

to the work of physically separate buildings or

areas, so long as they are employed in a

department which is functionally operated as

part of the dealership.

Committee Report at 32. The Fifth Circuit quoted selectively

from that passage for the proposition that the committee

intended to exempt all mechanics and salesmen. Deel

Motors, 475 F.2d at 1097 n.2. But the quoted passage also is

found in earlier committee reports, which were written before

the limiting phrase was added. E.g., Sen. Comm. on Educ. &

Lab., Report No. 871, p. 38, 89th Cong. (Aug. 25, 1965). 

Because the passage appeared both before and after the

addition of the “primarily” proviso, the best reading of that

passage is that the committee was addressing what provisions

apply to employees who work in separate buildings, not what

types of salesmen are exempt.

In sum, there are good arguments supporting both

interpretations of the exemption. But where there are two

reasonable ways to read the statutory text, and the agency has

chosen one interpretation, we must defer to that choice. 

Chevron, 467 U.S. at 844. Accordingly, we hold that

Plaintiffs are not exempt under 29 U.S.C. § 213(b)(10)(A).

Dismissal of claims 3, 5, and 7 AFFIRMED; dismissal of

claim 1 and the supplemental state-law claims REVERSED;

case REMANDED. Costs on appeal awarded to Plaintiffs.