Dealer mechanic exempt from OT pay under FLSA, court says

Publish Date: 
Jan 6, 2014
By Holly J. Wagner

MIAMI, Fla. - A federal judge has sided with a dealership in a dispute with a mechanic who sought overtime pay under the Fair Labor Standards Act (FLSA).

Ducati-certified mechanic Jean Edouard Henriquez sued Total Bike LLC, in February, claiming he was eligible for overtime pay under the FLSA. His attorneys argued first that an exemption for employees of auto dealers did not apply because Total Bike, doing business as Ducati Miami, did not fit the definition of an auto dealer.

Judge Federico A. Moreno disagreed, finding that, “Interpreting ‘automobile’ to include ‘motorcycles’ does not render the statutory remedy of the FLSA ineffectual; both a car and a motorcycle—and the mechanics who repair and service these vehicles — are within a small industry and class of persons performing substantially the same tasks on similar vehicles… Here, interpretation of the word ‘automobile’ to include ‘motorcycle’ does not render the FLSA's protections useless or further the exploitation of mechanics that would otherwise not be exempt under the FLSA.” 

Henriquez’ attorneys also argued that his compensation was not by commission and so failed to meet a requirement for an exemption that more than 50 percent of his income come from commissions. The dealer’s attorney argued that the pay system met the reqirement of a commission, and in any case was more than one and a half times the hourly minimum wage in Florida.

Moreno ruled for the dealer, finding that Henriquez’ “commission was in the form of a flat rate ‘billed hour’ system, a system which operates as follows: defendants calculate the number of hours normally required to perform a given type of service or repair and multiply that number by a determined labor rate. The product of this multiplication is the labor price of the service or repair to the customer. A mechanic is then assigned to the job. Each mechanic works in tandem with a service manager to keep track of the hours he/she works on the job. When it is completed and the hours of the team members are added up, defendants determine each member's compensation by multiplying the total number of billed hours for the job by the member's commission rate, referred to in the industry as the mechanic's ‘flat rate,’ which is based on the skill of the individual mechanic. Here, plaintiff's flat rate was $45 an hour, which was the equivalent of paying plaintiff approximately 43 percent of the labor component of the price of the service or repair charged to the customer.”

These payments qualified as bona fide commissions because they were “based on a percentage of fees charged to the customers,” the judge ruled.

Moreno granted the dealer’s motion for summary judgment, which decided the case in the dealer’s favor without a trial.

Henriquez v. Total Bike, LLC, 2013 U.S. Dist. Court, 1:2013cv20417. Read the full decision here.