Anderson v. S. Home Care Servs., Inc.

298 Ga. 175

780 S.E.2d 339

ANDERSON et al.

v.SOUTHERN HOME CARE SERVICES, INC. et al.

No. S15Q1127.

Supreme Court of Georgia.

Nov. 23, 2015.

J. Marcus Edward Howard, Geoffrey Edward Pope, Pope & Howard, P.C., Atlanta, Benjamin H. Terry, Law Offices of Benjamin H. Terry, Peachtree City, J. Derek Braziel, Dallas, Texas, for appellant.

Matthew A. Boyd, Ronald Glen Polly Jr., Hawkins Parnell Thackston & Young, LLP, Atlanta, for appellee.

NAHMIAS, Justice.

In 2013, former employees of two in-home personal care companies sued their former employers, asserting that they had not been paid the minimum wage to which they are entitled under the Georgia Minimum Wage Law (GMWL), OCGA §§ 34–4–1 to 34–4–6. The employers removed the case to a federal district court, which certified two questions to this Court:

1. Is an employee that falls under an FLSA [Fair Labor Standards Act] exemption effectively "covered" by the FLSA for purposes of OCGA § 34–4–3(c) analysis, thereby prohibiting said employee from receiving minimum wage compensation under the GMWL?

2. Is an individual whose employment consists of providing in-home personal support services prohibited from receiving minimum wage compensation under the GMWL pursuant to the "domestic employees" exception articulated in OCGA § 34–4–3(b)(3) ?

As explained below, we answer both of these questions no.

1. According to the pleadings, named plaintiffs Margaret Anderson, Mary Dixon, Latasha Williams, and Kyonnie Sutherland (collectively, "the Employees") are former employees of defendants Southern Home Care Services, Inc. and Res–Care, Inc. (collectively, "the Employers"). Res–Care is a multi-state home care company, and Southern Home Care Services is one of its subsidiaries.¹ The Employees provided in-home personal support services to the Employers' medically home-bound clients, such as bathing, grooming, toileting, transfers, ambulation, and dressing, as well as other services related to the care of the clients, such as washing sheets and dishes. The Employees also performed some general household work for their clients, but as required by the Employers, such work made up no more than 20% of the total services the Employees provided. The Employees often had to drive between different client homes during the workday. They were not permitted to report this time or compensated for the time at an hourly rate.²

On February 15, 2013, the Employees filed a lawsuit against the Employers in DeKalb County Superior Court, seeking to certify a class of similarly situated employees and alleging that the GMWL requires that the Employers pay at least $5.15 per hour for the Employees' unpaid workday travel time. The Employers removed the case to the federal district court for the Northern District of Georgia, invoking diversity jurisdiction.

See 28 USC § 1332.³ The Employers then filed a motion for judgment on the pleadings, arguing, among other things, that the Employers are subject to the federal Fair Labor Standards Act (FLSA), 29 USC §§ 201 to 219, and the Employees had not identified any FLSA exception, so the Employers were exempt from the GMWL under OCGA § 34–4–3(c). On March 21, 2014, the district court dismissed the Employees' complaint on this ground, but the court permitted the Employees to file an amended complaint, which they did on April 11, 2014.

The amended complaint includes the allegation that the Employees are exempt from the minimum wage set in the FLSA under the "companionship services" exception, see 29 USC § 213(a)(15), and therefore they are covered by the GMWL. The amended complaint seeks, among other things, recovery of unpaid minimum wages for any class member who worked for the Employers from November 21, 2004 onward, because, under an alleged tolling agreement, these employees have timely GMWL claims. See OCGA § 34–4–6 (requiring claims under the GMWL to be brought within three years of the GMWL violation). The Employers again moved for judgment on the pleadings, arguing first that because the Employers are subject to the FLSA, the Employees are not covered by the GMWL under OCGA § 34–4–3(a), and second that the GMWL does not apply to the Employees because they were "domestic employees" exempted under OCGA § 34–4–3(b)(3). On March 24, 2015, the district court certified the two questions set out above to this Court.⁴

2. The Georgia Minimum Wage Law says:

Except as otherwise provided in this Code section, every employer, whether a person, firm, or corporation, shall pay to all covered employees a minimum wage which shall be not less than $5.15 per hour for each hour worked in the employment of such employer.

OCGA § 34–4–3(a).⁵ The Employees assert that under this provision, they must be paid at least $5.15 per hour for the time they spent on the job traveling from one worksite to another. "Employer" is defined as "any person or entity that employs one or more employees," OCGA § 34–4–3.1(a)(2), so it is clear that the Employers here are subject to the Georgia statute.

The Employers contend, however, that the Employees come within the exception to the GMWL found in OCGA § 34–4–3(c), which says:

This chapter shall not apply to any employer who is subject to the minimum wage provisions of any act of Congress as to employees covered thereby if such act of Congress provides for a minimum wage which is greater than the minimum wage which is provided for in this Code section.

The Employers argue that this exception applies because the Employees are "covered" by the federal Fair Labor Standards Act, which since July 24, 2007 provided for a greater minimum wage than the GMWL. The FLSA says:

Every employer shall pay to each of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, wages at the following rates:

(1) except as otherwise provided in this section, not less than

(A) $5.85 an hour, beginning on [July 24, 2007];

(B) $6.55 an hour, beginning [July 24, 2008]; and

(C) $7.25 an hour, beginning [July 24, 2009.]

29 USC § 206(a).⁶

It is undisputed that the Employers, as companies with employees and clients in multiple states, are enterprises engaged in commerce, and thus they are "subject to" the FLSA's minimum wage provisions. See 29 USC § 203(b) (defining commerce to include "trade [or] commerce ... among the several States or between any State and any place outside thereof"). See also 29 USC § 202(a) ("Congress further finds that the employment of persons in domestic service in households affects commerce."). That is not, however, all that is required for the GMWL exception to apply. OCGA § 34–4–3(c) looks not only to whether the employer is "subject to the minimum wage provisions of any act of Congress" but also to whether the employees in question are "covered thereby"—thereby referring, like "subject to" does for employers, to "the minimum wage provisions of any act of Congress," not to any other part of a federal law.

The parties agree, and we assume for purposes of answering the certified questions, that from November 21, 2004 until at least January 1, 2015, the Employees fell under the "companionship services" exemption added to the FLSA in 1974, which exempts from the FLSA's minimum wage and maximum hour protections

any employee employed on a casual basis in domestic service employment to provide babysitting services or 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 [of Labor] )[.]

29 USC § 213(a)(15).⁷ During this time period, a federal regulation defined "companionship services" as including "meal preparation, bed making, washing of clothes, and other similar services." 29 CFR § 552.6 (effective until Jan. 1, 2015). These services could include "general household work" as long as that work did not exceed 20% of the total weekly hours worked. Id. Another regulation defined "domestic service employment" as "services of a household nature performed by an employee in or about a private home ... of the person by whom he or she is employed. The term includes employees such as ... nurses ... [and] caretakers." 29 CFR § 552.3 (effective until Jan. 1, 2015).

Notwithstanding this definition limiting domestic services to work done at the home of the employer, a third regulation promulgated at the same time expressly applied the statutory exemption for employees providing companionship services to workers employed by third-party agencies like the Employers here, see 29 CFR § 552.109(a)(effective until Jan. 1, 2015)—and in 2007, the U.S. Supreme Court upheld that specific regulation. See Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158, 168–171, 176, 127 S.Ct. 2339, 168 L.Ed.2d 54 (2007) (holding that the pre–2015 version of 29 CFR § 552.109 was a permissible exercise of agency discretion and applying the FLSA companionship services exemption to a third-party home care employer). Thus, under 29 USC § 213(a)(15) as interpreted in the pre–2015 version of 29 CFR § 552.109, the Employees concededly were not entitled to the minimum wage set by the FLSA during their time working for the Employers.⁸

The Employers argue that even though the Employees fell under this FLSA exemption, they were still "covered" by the FLSA because the Employees were exempt only from the minimum wage and maximum hour requirements of the FLSA, meaning that they were covered by other FLSA provisions. But again, the text of OCGA § 34–4–3(c) does not speak in terms of employees' coverage by the FLSA (or other acts of Congress) in general. Rather, it removes from the GMWL's protection employees who are "covered" by the minimum wage provisions of a federal statute like the FLSA if such act provides for a minimum wage greater than the GMWL's minimum wage. The Georgia exemption is squarely focused on...