Home Care Association of America v. Weil

76 F. Supp. 3d 138, 24 Wage & Hour Cas.2d (BNA) 95, 2014 U.S. Dist. LEXIS 176307, 2014 WL 7272406
CourtDistrict Court, District of Columbia
DecidedDecember 22, 2014
DocketCivil Action No. 2014-0967
StatusPublished
Cited by17 cases

This text of 76 F. Supp. 3d 138 (Home Care Association of America v. Weil) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Home Care Association of America v. Weil, 76 F. Supp. 3d 138, 24 Wage & Hour Cas.2d (BNA) 95, 2014 U.S. Dist. LEXIS 176307, 2014 WL 7272406 (D.D.C. 2014).

Opinion

MEMORANDUM OPINION

[Dkt. # # 9, 13]

RICHARD J. LEON, United States District Judge

For over forty years, Congress has exempted third-party providers of home care services from having to pay either minimum or overtime wages to their employees who provide domestic companionship services to seniors and individuals with disabilities, or to pay overtime wages to live-in domestic service employees. On October 1, 2013, however, the Department of Labor issued a new regulation that takes these longstanding exemptions away from third-party employers.

Plaintiffs Home Care Association of America, the International Franchise Association, and National Association for Home Care & Hospice (together, “plaintiffs”) bring this action under the Administrative Procedure Act, 5 U.S.C. §§ 701-06, against defendants David Weil, in his official capacity as Administrator of the United States Department of Labor’s Wage and Hour Division; Thomas E. Perez, in his official capacity as the Secretary of the Department of Labor; and the Department of Labor itself (together, “defendants” or “the Department”). Compl. ¶ 1 [Dkt. # 1]. .Plaintiffs challenge this new Department of Labor regulation as an arbitrary and capricious exercise of authority inconsistent with Congress’s language and intent. See generally Compl. Indeed, plaintiffs contend, inter alia, that if this new rule, which goes into effect on January 1, 2015, is allowed to stand, it will have a destabilizing impact on the entire home care industry and will adversely affect ac *140 cess to home care services for millions of the elderly and infirm. See Compl. ¶ 4.

Before me now are plaintiffs’ motion for partial summary judgment on Counts I and II of their Complaint and defendants’ motion to dismiss, or, in the alternative, for summary judgment. Pis.’ Mot. for Expedited Partial Summ. J.. (“Pis.’ Mot.”) [Dkt. # 9]; Defs.’ Mot. to Dismiss or in the Alternative Cross-Mot. for Summ. J. (“Defs.’ Mot.”) [Dkt. # 13]. 1 After consideration of the parties’ pleadings, the arguments of counsel, the relevant law, and the entire record in this case, plaintiffs’ motion for partial summary judgment is GRANTED, defendants’ motion is DENIED, and the Department’s revised Third Party Employer regulation scheduled to go into effect on January 1, 2015, is VACATED.

BACKGROUND

The Fair Labor Standards Act’ (“FLSA”), 29 U.S.C. §§ 201-19, first passed in 1938, obligates employers to pay covered employees minimum wage for all hours worked and overtime wages for hours worked in excess of 40 in a week, id. §§ 206-07. Congress amended the FLSA in 1974 in part to extend certain labor protections, including the provision of minimum and overtime wages, to domestic service employees. 2 Fair Labor Standards Amendments of 1974, Pub.L. No. 93-259, § 7, 88 Stat. 55, 62; see 29 U.S.C. § 201 (finding that domestic service employment affects commerce); id. § 206(f) (extending minimum wage protection); id. § 207© (extending overtime protections).

At the same time that it expanded FLSA coverage to domestic service employees, Congress included exemptions tied to certain types of domestic service work. Fair Labor Standards Amendments of ■ 1974, Pub.L. No. 93-259, § 7(b)(3) — (4), 88 Stat. 55, 62. In particular, the statute explains that its overtime and minimum wage requirements shall not apply to “any employee employed in domestic service employment to provide companionship services for individuals who (because of age or infirmity) are unable to care for themselves (as such terms are defined and delimited by regulations of the Secretary).” 29 U.S.C. § 213(a)(15) (“companionship services exemption”). Nor shall its overtime requirements apply to “any employee who is employed in domestic service in a household and who resides in such household.” 29 U.S.C. § 213(b)(21) (“live-in domestic employee exemption”). The' exemptions at issue here have remained in place since the passage of the 1974 Amendments, though FLSA exemptions have been amended since that time. See, e.g., Act of Dee. 9, 1999, Pub.L. No. 106-151, § 1, 113 Stat. 1731 (defining “fire protection activities” to clarify an overtime exemption); Small Business Job Protection Act of 1996, Pub.L. No. 104-188, § 2105(a), 110 Stat. 1755, 1929 (adding an exemption under 29 U.S.C. § 213(a) for certain computer professionals); Act of Sept. 30, 1994, Pub.L. No. 103-329, § 633(d), 108 Stat. 2382, 2428 (adding an overtime and minimum wage *141 exemption for certain criminal investigators).

Following the passage of the 1974 Amendments, the Department of Labor promulgated implementing regulations in 1975. 40 Fed.Reg. 7404. Of interest here, the regulations focus on the employees and the nature of the employees’ services. 40 Fed.Reg. 7405. The “term ‘domestic service employment’ refers to services of a household nature performed by an employee in or about a private home (permanent or temporary) of the person by whom he or she is employed.” 3 40 Fed.Reg. 7405. Examples include cooks, housekeepers, caretakers, chauffeurs, and “babysitters employed on other than a casual basis.” Id.

“Companionship services” means “those services which provide fellowship, care, and protection for a person who, because of' advanced age or physical or mental infirmity, cannot care for his or her own needs.” Id. Services “which require and are performed by trained personnel,” such as by nurses, do not qualify as “companionship services.” Id. Finally, “live-in” workers are described as “[djomestic service employees who reside in the household where they are employed.” 40 Fed. Reg. 7406.

The regulations further specify that the exemptions cover companions and live-in domestic service workers who are “employed by an employer or agency other than the family or household using their services.” 40 Fed.Reg. 7407. Although the final 1975 regulations acknowledge that the Department contemplated the question of whether employees of third parties should be exempt under the statute, the Secretary “concluded that these exemptions can be available to such third party employers since they apply to ‘any employee’ engaged ‘in’ the enumerated services.” 40 Fed.Reg. 7405. The final regulation elaborated, “This interpretation is more consistent with the statutory language and prior practices concerning other similarly worded exemptions.” Id. These regulations remained substantially unchanged until the rulemaking at issue here.

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76 F. Supp. 3d 138, 24 Wage & Hour Cas.2d (BNA) 95, 2014 U.S. Dist. LEXIS 176307, 2014 WL 7272406, Counsel Stack Legal Research, https://law.counselstack.com/opinion/home-care-association-of-america-v-weil-dcd-2014.