F OR P UBLICATION



### UNIT E D ST AT E S CO URT O F APPE AL S FO R T H E NINT H CIRCUIT

H E C T O R N A

V A R R O ; A N T H O N Y P I N K I N S ; K E V I

N M A L O N E ; and R E U B E N C A S T R

O , Plaintiffs-Appellants
,

v

.

E N C I N O M O T O R

C A R S , L L C, erroneously

sued as Mercedes B enz of Encino, a corporation,

Defendant-Appellee

. N o. 13-55323

D.C. No. 2:12-cv-08051- RGK-MRW

OPI NI ON

A ppeal from the United States District Court for the Central District of California R. Gary Klausner, District J udg e, Presiding

Arg ued and Submitted F ebruary 1 1, 2015—Pasadena, California

F iled March 24, 2015

B efore: Susan P. Graber and Kim McL ane W ardlaw, Circuit J udg es, and J ames C. Mahan, * District J udg e.

Opinion by

J udg e Graber

* * T h e H o n o rab le J am es C

. Mah an , Un i ted S tates District J u d g e f o r th e District o f

Nev ad a, sittin g b y

d esig n atio n

.N A V A R R O V

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SUMMARY * *

Labor Law

Affirming in part and reversing the dismissal of an action under the F air L abor Standards Act, the panel h eld that “service a dvisors” who worked at a car dealership did not fall

w i t h i n a s t a t u t o r y e x e m p t i o n u n d e r 2 9 U

. S

. C

. § 213(b)(10)(A) from the Act’s overtime pay requirements for “any salesman, partsman, or mechanic primarily eng ag ed in selling or servicing

automobiles.”

Disag reeing w ith the F ourth and F ifth Circuits, the panel deferred to the United States D e p a rtment of L abor’s
reg ulatory definitions, set o ut at 2 9 C.F .R. § 77 9

. 3 72(c), because the statute was ambig uous, and u n d er t he Chevron standard, the reg

ulation was reasonable.

The panel reverse d t h e dismissal o f the F L SA overtime claim a nd supplemental state-law claims. I t af f i rmed the dismissal of other federal claims not challeng ed on appeal.

** T h is su m m ary co n stitu

t es n o p ar t o f t h e o p in io n o f th e co u rt. It h as b een p rep ared b y

co u rt staf

f f o r th e co n v en i en ce o f

th e read er.N A V A R R O V

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COUNSEL

S. Keven Steinberg (arg

ued), F ink & Steinberg
, L os Ang eles, California, for Plaintiffs-Appellants.

Todd B

. Scherwin (arg

ued), Karl R. L indeg ren, a nd Colin P. Calvert, F isher & Phillips L L P, I rvin e, California, for Defendant-Appellee.

OP INION

GRAB ER, Circuit J udg e:

W e c onsider here a question o f f i r s t impression for our circuit: Are “service advisors” who work at a car dealership

ex e mpt from the overtime pay requirements o f the F air L abor Standards A ct (F L SA) of 1938, 29 U.S.C. §§ 201–219, under 29 U.S.C. § 213(b)(10)(A), which ex empts “any salesman, partsman, or mech an i c primarily eng ag ed in selling o r

serv i c i n g a

utomobiles”? Reviewing de novo, Fortyune v

. City o f Lomita
, 766 F .3d 1098, 1101 (9th Cir. 2014), petition for cert. filed
, ___ U.S.L .W

. ___ (U.S. J an. 26, 2 015) (No. 14-920), we answer that question “no” a nd, according ly
, reverse the district court’s holding to the contrary

.

F ACTUAL

AND PROCEDURAL

HI STORY

Defendant Encino Motorcars, L L C, sells and s e r v i c e s new and used Mercedes-B enz automobiles. 1 D efendant employ ed

1 B e c a u s e t h e d i strict co u rt d i sm issed th i s case u n d er Fed eral R u le of Civ il P ro ced u re 1 2 ( b )(6 ), w e tak e th e f acts alleg ed i n th e co m

p lain t as tru e. Bro wn v. Elec. Arts, In c. , 7 2 4 F.3 d 1 2 3 5 , 1 2 4 7 (9 th Cir. 2 0 1 3 ).N A V A R R O V

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o r employ s Plaintiffs Hector Navarro, Mike Shirinia n , Anthon y Pinkins, Kevin Malone, and Reuben Castro a s “service advisors.” The complaint alleg es:

T h e j ob duties and oblig ations of

. . . Service Advisors

. . . ar e t o meet and g reet Mer c e d e s B enz 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 lig ht of compla ints g iven them by these vehicle o wners. Upon evaluation of the service needs of the vehicle, the Service Advi s o rs

. . . then solicit a nd
sug g est[ ] that certain service[ s] be conducted

on the vehicle to r emedy the complaints of the vehicle owner by conducting certain repairs at [ D e f e n d a n t ’ s d e a l e r s h i p ] a n d t h r o u g h [ Defendant’s] o wn mechanics. The Service Advisors

. . . are also duty bound a nd oblig ated by [ Defendant] to solicit and

s u g g e s t t h a t s u p p l e m en t al s e r v i c e b e performed on the vehicle above and b e y o n d 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 a n d provide[ ] that to the vehicle owner. The v e h i cle is then taken to the mechanics at [ Defendant] for repair a nd maintenance.

As required b y [ D e f endant] a

nd oftent imes while the vehicle is with [ D e f e n d a n t ’ s ] m e c h a n i c s , t h e S e r v i c e Advisors .

. . will then call the vehicle ownerN A V A R R O V

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and solicit and sug g est that additional work be performed on the vehicle at additional cost.

Defendant pay s service advisors on a commission basis only ; Plaintiffs receive neither an hourly wag e nor a salary

.

I n 2012, Plaintiffs filed this action alleg ing
, among other thing s, that Defendant has violated the F L SA by fa i l i n g to pay overtime wag e s

. The district court dismissed the overtime claim because, the cour t concluded, Plaintiffs fall within the F L SA ’ s e x e mption for “any salesman, partsman,

or mechanic primarily eng ag e d in selling or s e rvicing automobiles.” 29 U.S.C. § 2 13(b)(10)(A). Plaintiffs timely appeal. 2

D I SCUSSI ON

Title 29 U.S.C. § 207(a)(1) requires that employ ers pay time-and-a- h al f for hours worked in ex cess of 40 per workweek. B ut § 213(b)(10)(A) provi d e s t hat “[ t] he provisions of section 207 of this tit l e s h a l l not apply with respect to

. . . any salesman, partsman, or mechanic p rimarily
eng ag ed in selling o r servicing automobiles, trucks, or farm implements, if he is employ ed by a no n m anufacturing establishment primarily eng ag ed i n t he business of selling such vehicles or implements to u ltim ate purchasers.” D efendant, as a car dealership, is a “nonmanufact u r i n g

2 T h e co u rt d ism issed

P lain tif f s’ o th er f ed eral claim s (claim s 3 , 5 , an d 7 ) on altern ativ e g ro u n ds n o t ch allen g ed o n ap p eal. Fo r th at reaso n , w e af f irm th e co u rt’ s d ism issal o f

th o se claim s. T h e co u rt also ex ercised its d iscretio n u n der 2 8 U.S.C. § 1 3 6 7 (c) to d i sm iss P lain tif f s’ state- law claim s f o r lack o f su

p p lem en tal j u risd ictio n

. B ecau se w e rev e r s e t h e d ism issal o f th e o v ertim e claim (claim 1 ), w e also rev erse th e d ism issal of th e state- law

claim s.N A V A R R O V

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establishment primarily e ng ag ed in the business of selling

. . . vehicles

. . . to ultimate purchasers.” I d. The q u e s t i o n is whether each Plaintiff is a “salesman, p artsman, or mechanic primarily eng ag ed in selling or servicing automobiles.” Id.

P l a i n t i ffs arg ue that we must defer to the United States Department of L abor’s 2011 reg ulatory definitions, set out at 29 C.F.R. § 779.372(c). 76 F e d. Reg

. 18,832-01 (Apr. 5, 2011). Those reg

ulations state, in relevant part:

Salesman, partsman, or mechanic.

(1) As used i n section 13(b)(10)(A), a salesman is an employ ee who is employ ed for the purpose of and i s primarily eng ag ed in making sales or obtaining orders or contracts for sale of t h e automobiles, trucks, or farm implements that the establishment is primarily
eng ag ed in selling

. . . . (2) As used in sectio n 13(b)(10)(A), a partsman is any employ e e employ ed for the
purpose of and primarily eng ag ed in requisitioning
, stocking
, a nd dispensing parts.

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

employ ee primarily

eng ag ed in doing mechanical w o rk (such as g et ready

m echanics, automotive, truck, or farm implement me c h a

n i c s , u s e d c a

r r e c o nditioning mechani cs, and wrecker mechanics) in the servicing of an automobile, truck or fa r m implement for its use and ope r a t ion a s such. . . .N A V A R R O V

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29 C.F .R. § 779.372(c). As the ag ency ex plained in 2011, the
reg ulatory definitions “limit[ ] the ex emption to sa l esmen w ho sell vehicles and partsmen and mechanics wh o s e r vice vehicles.” 76 F ed. Reg

. at 18,838. B ecause Plaintiffs do not fit within any o f those definitions, they are not ex e mpt from the F L SA’s o vertime wag e provisions. Defendant concedes that Plaintiffs do not meet the reg ulatory definitions, but counters that we should not defer to the reg ulation.

W e conduct the familiar tw o

- s t ep inquiry to determine whether to defer to the ag ency ’s interpretation. McMaster v

. United States
, 731 F

. 3d 881, 889 (9th Cir. 2013), cert. denied
, 1 3 5 S. Ct. 160 (2014). “At step one, we ask ‘whether Cong r ess has dire c tly spoken to the precise question at issue.’ ” Id. (quoting Chevron, U .S.A., Inc. v. Natural Res. Def. Council, Inc.
, 4 67 U.S. 837, 842 ( 1984)). I f so, then the in quiry is over, and we must g ive effect to the “unambig uously ex p r essed intent of Co ng ress.” Chevron
, 467 U.S. at 843. B ut if the statute is silent o r a m b i gu o us, then we must determine, before step two, what level o f deference applies. McMaster
, 731 F

. 3d at 889. “ I f we determine that Chevron deference applies, then we move to step two, where we w ill def er t o the a g ency ’s interpretation if it is ‘based on a p e r m i s sible construction of the statute.’” Id. (quoting Chevron
, 467 U.S. at 843).

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

W h en construing a cong ressional enactment, “our inquiry beg ins with the statutory tex t.” BedRoc Ltd. v. United States
, 541 U.S. 1 76, 183 (2004). I n addition, in the present c ontex t

we must apply the backg r ound r ule that “[ t] he F L SA is to be construed liberally in favor of employ ees; ex emption s a re narrowly construed ag ainst employ ers.” Haro v. City o f LosN A V A R R O V

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Angeles
, 745 F .3d 1249, 1256 (9th Cir.), cert. denied
, 135 S. Ct. 138 ( 2014). “F L SA ex emptions

. . . are to be withhe ld

e x c ept as to persons plainly and unmistakably within th ei r terms and spirit.” 3 Solis v. W ashington
, 656 F .3d 1079, 1083 (9th Cir. 2011) (internal q uotation marks omitted). “ A n employ e r who claims an ex emption f rom the F L SA bears the burden of d emonstrating that such a n e x emption a

pplies.” Id. (internal quotation marks omitted).

As noted, the statute ex e mpts “any sal e s m a n, partsman,

or mechanic primarily eng ag e d in se l l ing or servicing automobiles.” 29 U.S.C. § 213(b)(10)(A). The statute does
not define t h e terms “salesman, partsman, or mechanic.” Ex amining the statutory tex t and apply ing canons o f statutory interpretation, we c a

n not conclude that service advisors such

as Plaintiffs are “persons plainly and unm i s takably within [ the F L SA’s] terms and spirit,” Solis
, 656 F .3d at 1083 (internal quotation marks omitted).

I t is plausible to read the term “ salesman” broadly and to connect the term to “ servicing automobil e s ” ; t h at is, o ne could consider a service advisor to b e a “salesm a n

. . . primarily eng ag ed in

. . . ser v i c ing automobiles.” B u t, a s

ex p lained in more deta il below, in Part C, it is at least a s pl a u s i b l e to read the nouns in a more cabined way : a sale s m a n i s a

n employ ee who sells cars; a partsman is an employ e e who requi sitions, stocks, and dispenses parts; a nd

3 T h e ru le th at co u rts sh o u ld co n stru e th e F L SA ’ s ex em p tio n s n arro w ly

o rig in ated in Arn o ld v. Ben K a n o wsky, In c. , 3 6 1 U.S. 3 8 8
, 3 9 2 (1 9 6 0 ). In

recen t y ears, th e Su

prem e Co u rt h as clarif

ied th at th e p resu m

p tio n ap p lies

o n ly to th e ex em

p tio n s in § 2 1 3 an d n o t m o re g en erally

. S a n difer v. U

.S

. S teel Co rp

. , 1 3 4 S

. Ct. 8 7 0
, 8 7 9 n .7 (2 0 1 4); Ch risto p h er v. Smith Klin e Beech a m Co rp

. , 1 3 2 S. Ct. 2 1 5 6 , 2 1 7 2 n .2 1 (2 01 2 ).N A V A R R O V

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a mechanic is an employ ee who p e r forms mechanical work

on cars. Service advisors do none o f those thing s; t h ey sell service s f o r cars. They do n ot sell cars; they do n ot stock parts; and they

do not perform mechanical work on cars.

I t is not clear from the t e x t o f the statute whether Cong r ess intended broadly to ex empt any salesman who is involved in the servicing o f cars o r, more narrowly
, only those salesmen who are selling the cars themselves. Certainly Cong r ess did n ot ex e mpt all employ ees of a c ar d e a l e r s hip; for e x a m p le, a bookkeeper who tracks invoices for car sales and servicing is plainly not ex e m p t , nor is a secretarial employ e e who routes c a lls to the salesmen, p artsmen, a nd mechanics. Nor do c anons of stat u t o r y interpretation aid Defendant. To the contrary , the § 213 “ex emptions a re narrowly construed a g ainst employ er s

. ” Haro
, 745 F .3d at 1256.

I n sum, the statutory tex t a n d canons of statutory interpretation y ield no clear a n swer to wh e t h er Cong ress intended to include service advisors w i t h in the e x emption. B ecause Cong ress has not “directly spoken to the p r e c ise question at issue,” Chevron
, 4 6 7 U .S. at 842, the statute is ambig uous.

B

. ChevronProvides the Appropriate Lens.

W h en a s t atute is ambig uous, then we must determine, “prior to step two,” the appr o p r i a t e standard: either the Chevron test of r e a s onableness or a lower standard under United States v

. Mead Corp.
, 533 U.S. 218 (2001). McMaster
, 731 F .3d at 889. B e ca u s e w e consider here a reg ulation duly promulg ated after a notice-and-comment period, Chevron ’s “reaso n a b l eness” standard applies. See,N A V A R R O V

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e.g. , Renee v. Duncan
, 623 F .3d 787, 795 ( 9 t h Cir. 2 010) (“The c halleng ed federal r eg ulation interprets a federal
statute. The regu lation w as a dopted by the responsible federal ag ency throug h notice and comment r ulemaking

. W e therefore app l y the analy tical framework outlined in Chevron .”).

Nothin g i n t he h istory of the reg ulation undermines that conclusion. I ndeed, the orig inal version of the reg ulation, promulg a ted 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 L ab., W ag e & Hour Div., Opinion L etter No. 660, 66–69 L ab. Cas. (CCH) ¶ 30,652 (Aug

. 4, 1967) ( also providing the same narrow definitions). Those reg ulatory definitions have not chang ed in any relevant way since 1 9 7 0

. B ecause the ag e ncy ’s f o rmal, reg u latory position h as n ot c hang ed, the cases ci t e d by Defendant a

re not on point. I n Christopher v. S mithKline Beecham Corp.
, 132 S. Ct. 2 156, 2 165 (2 012), the Supreme Court addr e s s e d what level of deference to g ive to an ag ency ’s interpretation of its own reg ul at i o n s. I mportantly
, the parties ag r eed that “the reg ulations themselves

. . . [were] entitled to d eference under Ch e v r o n .” Id. Similarly
, U .S. Steel
, 6 78 F

. 3d at 598–99, involved only opinion letters; the
ag ency had not issued formal reg ulations.

I t is t r u e t h a t the Department of L abor occasionally has adopted the broader definitions, urg ed by Defendant h ere, in documents other than reg ulati o n s

. F or ex ample, the ag ency issued an opinion letter in 1978 that defined a “ salesman” to
encompass service advisors. Dep’t of L ab. Opinion L e t t er No. W H-467, 1 978 W L 51403 (J uly 2 8, 1 978). Similarly
, the
ag ency am e nded its F ield Operations Handbook in 1987 along the same lines. Field Operations Handbook, Dep’t o fN A V A R R O V

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L ab., W a g e & Hour Div., 2 4L 04-4, I nsert No. 1757 (Oct. 20, 1987).

The ag ency even propos e d amending the formal

r e g ulation to adopt the broader d efinitions. 73 F ed. R eg. 43,654-01, 43,658–59, 43,671 (J u ly 28, 2008 )

. B ut it ultimately decided against making that chang e after r eceiving
comments from the p u

blic and considering the relevant court decisions. 76 F ed. Re g

. at 1 8,838. The ag ency “acknowledg e[ d] that there are strong ly h eld views on several of the issues presented in this rulemaking
, and it has carefully considered a ll of the comments, analy ses, and arg uments made for and ag ainst the proposed c h ang es in d e veloping this final rule.” I

d. at 18,832. The reg

ulatory history shows that the Department of L abo r h a s g iven this p articular issue considerable thoug ht and h a s c o n cluded that the better reading of the statute is to “limit[ ] the ex emption to salesmen who sell vehicles and partsmen and m echanics who service vehicles.” Id. at 18,838.

Moreover, even if we were to consider the ag ency ’s 2011 final rule a chang e of position, we s t i l l would conclude that Chevron supplies the appropria te standard of deference. A s the Supreme Co u r t e x plained in FCC v. Fox Television Stations, Inc.
, 556 U.S. 502 (2009), an ag ency is permitted to chang e its p osition. Consistent w ith Fox
, the ag ency here

ex p ress ly acknowledg ed that its position was contrary to its earlier opinion l etter, and the a g ency rationally ex p lained why
, in its view, the c ourt d e c isions to the contrary were

erroneous. Under Fox , 556 U.S. at 515–18, nothing more is required. Cf. Perez v. Mor t g

. Bankers Ass’n
, No. 13-1041, 2015 W L 998535 (U.S. Mar. 9, 2015) (holding that an ag ency may chang e its position in a n interpretive rule without notice and comment).N A V A R R O V

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The Department of L abor’s reg ulations consistently —for 45 y ears—have interpreted the statutory ex emption to app l y narrowly

. The ag ency reaffirmed that interpretation most

r ecently in 2011, a fter thoroug h c onsideration of o ppo s i n g views and after a formal notice-and-comment process. Under these circumstances, Chevron provides the appropriate leg al standard.

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

“U n d er Chevron step two, if the ag e ncy ’s interpretation is a r e asonable one, this c o u rt may not substi t u t e its o wn construction of the s t a t u t o ry p rovision.” CHW W

. Bay v

. Thompson
, 246 F .3d 1218, 1223 (9th Cir. 2001) (brackets a nd i n ternal quotation marks omitted). Here, the Departme n t o f L abor has interpreted the stat u t ory ex emption to ex clude service advisors by choosing the narrower defini t i o n of the
term “salesman.” F or the r easons described b e l o w, we conclude that the ag ency h as made a permissible choice. The interpretation accords with the presum p t i o n that the § 213

ex e mptions should be construed narrowly

. Haro
, 745 F .3d at 1256. Moreover, we are mindful of o u r r o l e a s a reviewing
court: “The ag ency ’s interpretation need not be the best construction of the ambig uous statute.” Cervantes v. H older
, 772 F .3d 583, 591 (9th Cir. 2014).

W e recog niz e that our decision to uphold the ag e ncy ’s interpretation conflicts with d ecisions of the F ourth and F ifth Circuits, se veral district courts, and the Supreme Court o f Montana. W

alton v. Greenbrier F

o rd, Inc.
, 370 F .3d 446 (4th Cir. 2004); B rennan v. D eel Motors, Inc.
, 475 F .2d 1095 (5th Cir. 1973); Brennan v. N. Bros. F o rd, Inc.
, No. 40344, 1975 W L 1 0 7 4 (E.D. Mich. Apr. 17, 1975) (unpublished), aff’d

s ub. nom Dunlop v. N. Bros. Ford, Inc.
, 529 F .2d 5 24 ( 6 t hN A V A R R O V

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

- 4982, 1975 W L 1 248 (D. Kan. Oct. 21, 1 975) (unpublished); Y

enney v

. Ca s s Cnty. Motors Co.
, No. 76-0- 294, 1977 W L 1678 (D. Ne b

. F eb. 8, 1977) ( unpublished); Thompson v. J.C. B illion, Inc.
, 294 P.3d 397 (Mont. 2 0 1 3). W e respectfully

disag ree with those decisions.

I n D ee l Motors and the district court opinions following th a t case in the 1970s, courts held that service advisors a re

e x empt because their duties and pay structure a r e “functionally similar” to those o f the salesmen, partsmen, a nd mechanics whom the statute ex pressly ex empts. 4 75 F

. 2 d at 1097. B ut t h o s e cases p re-dated Chevron and the modern framework for deferring to a n ag e ncy ’s interpretation. See id. (asking not whether th e ag ency ’s interpretation was reasonable but, instead, determinin g for itself “the best interpr e t ation,” “the better reasoned interpretation,” and “a

common sen s e interpretation”); see also id. a t 1098 (concluding that “[ t] he intended scope of [ the ex emption] is
not entirely clear” b ut not considering de f erence to the
ag ency ’s position). I n that reg ard, we a gr ee with the F ourth Circuit that “[ the] ‘functionall y similar’ inquiry cannot be squared with F L SA’s p lain statutory and reg ulat o r y lang uag e.” W

alton
, 370 F .3d at 451. Nothing in the statutory te x t s ug g ests that Cong ress meant to ex empt salesmen, partsmen, mechanics, and a n y other employ e es with functionally simil a r job duties and pay structure; the tex t

ex e mpts only

certain salesmen, partsmen, and mechanics.

The closer question is whether the ag ency ’s interpretation is unreasonable because it is unduly restrictive, as the F ourth Circuit held in W

alton and the Montana Supreme Court h eldN A V A R R O V

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in Thompson

. 4 Those courts r ead § 213(b)(10)(A) as follows: “any salesman, partsm an, or mechanic p rimarily eng ag ed in [ t h e g e neral business of] selling or service automobile s

. ” Se rv i ce advisors are “salesmen” because their job is to sell services for cars. And service advisors are involved in the
g eneral business of “servicing automobiles,” because t h e ir role is to help customers receive mechanical work o n t h e ir

cars. According ly
, service advisors f al l w ithin the statutory definition. I n effect, those courts held that that is the only reasonable reading

of the statute.

The ag ency r eads the statute differently : “any salesman, partsman, or mechanic primarily [ a nd personally ] eng ag ed in selling or servicing automobiles.” Service advisors may be “salesmen” in a g eneric sense, but they d o not personally sell

cars and they do not personally service cars. Acco r ding ly
, service a dvisors fall outside the statutory definition. I n effect, the ag ency

reads the statute as ex empting salesmen who sell cars and partsmen and mechanics who service cars.

The F ourth Circui t rejected that interpretation a s unreasonable because, with respect to “sales m an , ” it purportedly reads out of the s t a t u te the second h alf of the d isjunctive clause “‘selling or servicing automobiles

. ’ ” W alton
, 370 F .3d at 452 (emphasis by W alton ) (quoting § 21 3 (b)(10)(A)); see a lso Thompson
, 294 P.3d at 402 (“A plain, gr a m m a tical r eading of [ the statute] makes c lear that the term ‘salesman’ e n c o mpass es a broader categ ory o f employ e es than those only e n g a g ed in selling vehicles” because of “[ t] he use of the disjunctive ‘or’ bet ween the

4 W alto n co n sid ered t

h e issu e at Ch evro n step tw o , w h ereas Th o mp so n

co n sid ered th e i s s u e at Ch evro n step o n e. Oth erw ise, th e reaso n in g of b o th co u rts is larg ely

th e sam e.N A V A R R O V

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words ‘selling or

servicing ’”). The F ourth Circuit’s point is that, when Cong ress uses a list of disjunctive subjects (here, “salesman, p artsman, o r mechanic”) followed by a list o f disjunctive v e r

bs (here, “ selling or servicing ”), the ordinary interpretation of that c o n struction is that each subject is linked with each verb. F or ex ample, if someone say s, “if my dog s o r c ats are ea t i ng or drinking
, then I know not to pet them,” we understand that p hrase to be all-encompassing : the speaker refrains from petting a dog that is eating or drinking and a cat that is ea t i n g o r d rinking

. I t would contravene the speaker’s intent to include, f or e x ample, only ca t s that were eating but to ex clude dog s that were eating

. Critically
, h o wever, that analy sis depends on contex t. Consider this slig htly modified hy pothetical: “if my d og s o r cats are barking or meowing
, then I know that they need to be let out

. ” The F ourth Circuit’s g r ammatical interpretation o f that phrase would include a meowing dog and a barking

cat. B ut most Eng lish speakers would interp r et the sentence to refer only to a barkin g d o g and a meowing cat. A t a minimum, that implicit limitation wou l d offer a reasonable interpretation of the speaker’s intent.

R e turning to the statute at hand, the ag ency ’s interpretation is r ea s o n able. A natural reading of the tex t strong ly sug g ests that Cong ress did not intend that both verb clauses would apply to all three subjects. F or ex amp l e , i t is hard to imag ine, in ordinary s p e ech, a “mechanic p rimarily
eng ag ed in selling

. . . automobile s

. ” T h at is, it seems that Cong r ess intended the subject “mechanic” to be connected to only one of the two verb clauses, “servicing .” The nature of the word “mechanic” strong ly implies the actions th a t the
p e r s o n would take—servicing

. See American Heritage College Dictionary 842 (3d ed. 2 000) (defining “mecha n i c ”N A V A R R O V

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as a “ worker skilled in making
, using
, or repairing machines, vehicles, and tools”). The same ca n be said of the subject “salesman.” I t is har d to imag ine, in ordinary speech, a “s a l e s m a n

. . . primarily eng ag ed in

. . . servicing automobiles.” Cong ress likely intended the s u b j e ct “salesman” to be connected to only one of the two verb clauses, “selling .” The nature of the word “salesman” strong ly implies the actions that the person would take—selling

. See id. at 1203 (defining “salesman” as a “man who sells merchandise”).

I t is important to note that the ag ency ’s reading does not rende r a ny term meaning less or superfluous. All three subjects (salesman, partsman, a n d mechanic) and both verbs (selling and servicing ) retain meaning ; it is just that some of the verbs do not apply to some o f the subjects. I f the ag ency read out a word altog ether, its interpretation likely would be unreasonable. See, e .g. , Chubb Cust o m I n s. Co. v

. Space S y s ./Loral, Inc.
, 710 F .3d 946, 9 66 (9th Cir. 2013) (“ I t i s a well-established rule o f statutory cons t ruction that courts should not interpret statutes in a way that renders a provision superfluous.”), cert. denied
, 134 S

. C t

. 906 (2014). B ut the
reg ulation does not run afoul of that doctrine.

Non-tex tual indicators of cong ressional intent, such a s leg islative history
, a re inconclusive. See Fournier v

. Sebelius , 718 F .3d 1110, 1123 ( 9th Cir. 2013) (holding that,
at Chevron step two, “leg islative history permissibly may be considered”), c ert. denied
, 134 S. Ct. 1 501 (2014). W e have found no mention, in the relevant r eports or hear ing s, o f service advisors, b y name or by role. All references to “salesman” appear to r e fe r t o a n employ ee who sells cars only

. See, e.g. , 112 Con g. R e c

. S20,504 (Aug

. 24, 1 966) (statement of Sen. Yarborough ) ( “ I t would not affect theN A V A R R O V

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salesman. He can g o out and sell an Ol d smobile, a Pontiac,

or a B uick a l l d ay long and all nig ht.”); id. (“The salesman tries to g et people mainly after their hours of work. I n some

cases a man will leave his job, g et his wife, and g o to look at automobiles. So the hours of a salesman are different.”).

I n 1961
, Cong ress ex e mpted “any employ ee” of a c ar dealership. 29 U.S.C. § 213(a)(19) (1961); Pub. L

. N o. 87- 30, § 9, 75 Stat. 65 (1961). A few y ears later, the Eig h ty

Ninth Cong ress considered three b ills on this topic. The first bill, introduced in 1965, would have r epealed altog ether the

ex e mption for employ e e s of dealerships. H.R. 8259, 89th Cong

. § 305 ( i n t r o duced in House on May 18, 1965). The

nex t bill, also introduced in 1965, w ould have ex empted from overtime requirements “any salesman or mechanic employ ed by ” a car dealership. H.R. 10 ,518, 89th Cong

. § 209 (introduced in House o n Aug

. 17, 196 5 ) ; 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 T h e first three v ersions, introduced in
t h e first half of 1966, e x empted e ither “any salesm a n o r

5 Def en d an t cites recen t actio n s b y th e Ho u se o f Rep r e se n t a t iv es’ Co m m i ttee o n A

p p ro p riatio n s in an ap p aren t attem p t to p rev en t

en f o rcem en t b y th e ag en cy o f th e 2 0 1 1 ru le. T h at ap p ro p riatio n s rid er is

n o t r elev an t. W h at o n e h o u se o f Co n g ress th i n k s, in th e 2 0 1 0 s, ab o u t

en f o rcem en t p rio rities f

o r t h e ag en cy is en tirely

u n in f o rm ativ e ab o u

t th e i n t e n t o f Co n g ress w

h en it en acted a statu te in 19 6 6

. Mo reo v e r , en f o rcem en t prio ritie s d o n o t ch an g e th e co n ten t o f th e statu te. If th e A p pro p riatio n s Co m

m i ttee w ere to in stru ct, fo r in stan ce, th at it d id n o t

w an t m o n ey sp en t o n en f

o rcin g th e statu tes f

o rb id d in g cu ltiv atio n of f

ew er th an f iv e m arij u a n a p l an ts o n f ed eral lan d s, su ch cu ltiv atio n w o u ld n o t b eco m e law f

u l.N A V A R R O V

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mechanic” o r “any salesman, mechanic, or partsman” employ e d by a car dealership. H.R. 13,712, 89th Cong

. § 209 (introduced in House on Mar. 16, 1965); id. (re p o r t e d in House on Mar. 29, 1966); id. (referred in Senate on May 27, 1 9 6 6 ). The final three v ersions all qualified the li s t o f employ e es with the phr a s e , “primarily eng ag ed in selling o r servicing automobiles.” Id. (reported in Senat e o n Aug

. 23, 1966); id. (ordered to be printed in Senate on Aug

. 25, 1 966); Pub. L

. No. 89-601 (Sept. 23
, 1966). We k now, then, that sometime in 1966 between May 27 and Aug ust 23, the Senate added that p hrase. Unfortunately
, the leg islativ e h i s t ory 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 p rovision reg arding partsmen, e x cept that such ex emption shall be a vailable only
to salesmen, partsmen, and mechanic s primarily eng ag ed in selling or servicing such v ehicles.”); 112 Cong

. Rec. S22,651 (Sept. 14, 1966) (“The resulting lang uag e follows the House

e xe m p t i o n

— i n c l u d i ng the Senate floor amend m e n t

— b u t w i t h a somewhat narrower scope.”); Sen. Comm. on L ab. & Pub. W e lf., Report No. 1487, p. 1 4, 89th Cong

. (Aug

. 23, 1 966) (“Committee Report”) (“Section 13(b) is amended to provide

an overtime ex emption for salesmen and mechanics who a re primarily eng ag ed in selling or servicing automobiles

. . . .”).

The only possible ex ception, n oted by Deel Motors
, 475 F .2d at 1097 n.2, is found in the Committe e Report on Aug ust 23, 1966:

I t is t h e intent of this ex emption to ex clude from the coverag e of section 7 a ll mechanics and salesmen (other than partsmen) employ ed by an automobile, trailer, tr u c k, farm implement or aircraft dealership even if theyN A V A R R O V

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work in phy sically separate building s or areas,

o r e v en if, thoug h working in the princip al b u i l ding of the dealership, their work relate s to the work of phy sically separate building s o r areas, so long as t hey are employ ed in a department which is func t i o nally operated a s part of the dealership.

Committee Report a t 32. The F ifth Circuit quoted selectively from that pa s s a g e for the proposition that the committee intended to ex empt all mech a n i c s a n d salesmen. Deel Motors
, 475 F .2d at 1 097 n.2. B ut the quoted passag e also is found in e arlier committee reports, which were written before the limiting phrase was added. E.g.
, Sen. Comm. on Educ. & L ab., Report No. 871, p. 38
, 89th Cong

. (Aug

. 2 5
, 1965). B ecause the p assag e appear e d b o t h before and after the additio n of the “primarily ” proviso, the best reading of that
passag e is that the committee was addressing what provisions apply to employ ees who work in separate building s, not what ty pes of salesmen are ex empt.

I n sum, there are g ood a rg uments s u pporting both interpretations of the e x emption. Bu t wh ere there are two reasonable w ay s to read the statutory tex t, and the ag ency has

c h o s en one interpretation, we must defer to that choice. Chevron
, 467 U.S. at 844. Accordingl y , w e hold that Plaintiffs are not ex empt under 29 U.S.C. § 213(b)(10)(A).

Dismissal of claims 3, 5, a nd 7 AF F IRMED ; dismissal o f claim 1 and the supplemental state-law claims REVERSED ;

case REMANDED . Costs on appeal awarded to Plaintiffs.