Belt v. EmCare, Inc.

444 F.3d 403, 2006 WL 758277
Court of Appeals for the Fifth Circuit·Decided April 6, 2006·No. 05-40370·Published·Cited by 53 cases

Opinion

JERRY E. SMITH, Circuit Judge:

This appeal presents the question whether physician assistants (“PA’s”) and nurse practitioners (“NP’s”) 1 qualify for the professional exemption to the overtime requirements of the Fair Labor Standards Act (“FLSA”). Plaintiffs, and the Department of Labor (“DOL”) as amicus curiae, contend that the regulation interpreting the professional exemption, 29 C.F.R. § 541.3 (1973), does not speak to the precise question before us and that the agency’s informal interpretive statements excluding plaintiffs from the exemption merit deference under Auer v. Robbins, 519 U.S. 452, 117 S.Ct. 905, 137 L.Ed.2d 79 (1997). We agree and affirm, and remand for further proceedings.

I.

Plaintiffs are 59 PA’s and 20 NP’s who provide health care services for EmCare, Inc., in hospital emergency rooms in twenty states. 2 Plaintiffs are paid hourly at a *406 flat rate for all hours worked, including overtime (i.e., all hours over forty in a workweek). The DOL’s Bureau of Labor Statistics’ Occupational Outlook Handbook provides an overview of the job descriptions of PA’s and NP’s:

Physician assistants (PAs) practice medicine under the supervision of physicians and surgeons ... PAs are formally trained to provide diagnostic, therapeutic, and preventive health care services, as delegated by a physician. Working as members of the health care team, they take medical histories, examine and treat patients, order and interpret laboratory tests and x rays, and make diagnoses. They also treat minor injuries, by suturing, splinting, and casting. PAs record progress notes, instruct and counsel patients, and order or carry out therapy. In 48 States and the District of Columbia, physician assistants may prescribe medications. PAs also may have managerial duties. Some order medical supplies or equipment and supervise technicians and assistants.[ 3 ]
Nurse practitioners provide basic preventive health care to patients, and increasingly serve as primary and specialty care providers in mainly medically underserved areas ... In most States, advanced practice nurses can prescribe medications.[ 4 ]

Plaintiffs sued EmCare for back wages and liquidated damages under the FLSA, alleging that EmCare was violating the FLSA by failing to pay time-and-a-half compensation for overtime. EmCare responded that it did not owe plaintiffs additional pay, because they qualify for an exemption as bona fide professionals under 29 C.F.R. § 541.3(e) (1973). The parties filed cross-motions for partial summary judgment on this issue, and the district court granted plaintiffs’ motion. See June Belt v. EmCare Inc., 351 F.Supp.2d 625 (E.D.Tex.2005).

The court reasoned that § 541.3(e) is ambiguous, so it deferred to the DOL’s informal pronouncements on § 541.3(e), including a DOL opinion letter and the Wage and Hours Field Operations Handbook, which tended to show that PA’s and NP’s must be paid on a salary basis to be exempt from the FLSA. The court based its decision on Auer, 519 U.S. at 461, 117 S.Ct. 905, which held that an agency’s interpretation of its own ambiguous regulation is controlling unless clearly erroneous or inconsistent with the regulation.

The court also considered the history of the FLSA’s professional exemption, which showed that the DOL had rejected earlier efforts to expand the exemption to include other professionals, such as engineers and architects, and that the NP and PA professions had not fully developed when the exemption was created. The court further considered the latest version of the applicable regulations, effective August 23, 2004, 5 which codified a previous informal interpretation of § 541.3(e) (i.e., provided notice and comment), requiring that certain analogous professions, such as nurses *407 and certified medical technologists, be salaried to be exempt from the overtime requirements. The court certified its order for interlocutory appeal under 28 U.S.C. § 1292(b), 6 and we granted leave to appeal.

II.

The FLSA provides that a covered employee shall receive compensation at one- and-one-half times the regular rate for every hour over forty worked during the week, 7 but not if he is “employed in a bona fide executive, administrative, or professional capacity ... as such terms are defined and delimited from time to time by regulations of the Secretary.” 29 U.S.C. § 213(a)(1). Pursuant to this authority, the DOL, after notice and comment, issued § 541.3, which defines a “bona fide ... professional” as an employee who satisfies certain duty requirements 8 and “is compensated for services on a salary or fee basis” (the “salary-basis test”). 9

Section 541.3(e) further provides that the salary-basis test does not apply to “an employee who is the holder of a valid license or certificate permitting the practice of law or medicine or any of their branches and who is actually engaged in the practice thereof’ (the “salary-basis exception”). Because the parties agree that plaintiffs satisfy the duty requirements of the professional exemption and are paid hourly, the sole interpretive issue in this appeal is whether NP’s and PA’s hold a license permitting, and actually engage in, “the practice of ... medicine or any of [its] branches.”

If NP’s and PA’s practice medicine within the meaning of § 541.3(e), plaintiffs do not need to satisfy the salary-basis test to qualify for the exemption, and EmCare can deny additional overtime pay. If, however, plaintiffs do not practice medicine under § 541.3(e), they are subject to the salary-basis test, they do not fall within the exemption, and they are eligible for time-and-a-half compensation. We are the first circuit to address the precise issue presented by this case.

III.

When confronted with a statute administered by an executive agency, we de *408 fer to the agency’s interpretation of the statute if (a) the statute is silent as to the precise question at issue and (b) the agency’s interpretation is reasonable. 10 'We employ a similar two-step test when interpreting an agency regulation.

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Belt v. EmCare, Inc., 444 F.3d 403, 2006 WL 758277 (5th Cir. 2006).

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