Guerrero v. Moral Home Servs., Inc.

247 F.Supp.3d 1288

Paulina GUERRERO, Plaintiff,

v.MORAL HOME SERVICES, INC. and Armando Morales Rose, Defendants.

Case Number: 16–23051–CIV–MORENO

United States District Court, S.D. Florida, Miami Division.

Signed March 27, 2017

Yelina Angulo, Miami, FL, for Plaintiff.

Ena Teresa Diaz, Ena T. Diaz, P.A., Coral Gables, FL, for Defendants.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

FEDERICO A. MORENO, UNITED STATES DISTRICT JUDGE

This case is a one-count Fair Labor Standards Act claim by Paulina Guerrero against her former employer, Moral Home Services, Inc., and its owner, Armando Morales Rose (collectively, "Assisting Hands").¹ Assisting Hands is a home health care agency that places home health care aides in private homes to provide clients with personalized non-medical care in the clients' homes. Guerrero was employed by Assisting Hands as a home health care aide from September 2012 to April 2016. She claims that Assisting Hands willfully violated the Fair Labor Standards Act by failing to pay her $3,913.75 in overtime wages in 2015. She seeks monetary damages, liquidated damages, interest, fees and costs.

This cause comes before the Court upon Assisting Hands' Motion for Summary Judgment. The main issue is whether the Department of Labor's amended regulations related to the "third-party companionship" exemption became effective on January 1 or October 13, 2015.

I. BACKGROUND

The Fair Labor Standards Act requires covered employers to pay their employees overtime wages at one and one-half times an employee's normal hourly rate for hours worked over 40 in a week. 29 U.S.C. §§ 206, 207. For any violation, the Act authorizes an aggrieved employee to bring a collective action on behalf of herself and "other employees similarly situated." See id. § 216(b). But, the Act also contains numerous exemptions from its wage and hour requirements. The "companionship services" exemption exempts any employee who is "employed in domestic service employment to provide companionship services for individuals who (because of age or infirmity) are unable to care for themselves." See id. § 213(a)(15).

In October 2013, the Department of Labor issued a final rule amending its regulations, to be effective January 1, 2015. See Application of the Fair Labor Standards Act to Domestic Service, 78 Fed. Reg. 60,454 (Oct. 1, 2013) (codified at 29 C.F.R. pt. 552). The amended regulations preclude third-party employers—like Assisting Hands—from claiming the companionship services exemption. See 29 C.F.R. § 552.109(a) ("Third party employers of employees engaged in companionship services ... may not avail themselves of the ... overtime exemption.").

The proposed changes were challenged in the United States District Court for the District of Columbia. On December 22, 2014—before the planned January 1, 2015 effective date—the district court concluded that the Department of Labor exceeded its rule-making authority and vacated the rule as applied to third-party employers. See Home Care Ass'n of Am. v . Weil, 76 F.Supp.3d 138 (D.D.C. 2014).² On August 21, 2015, the Court of Appeals for the District of Columbia reversed the district court's vacatur. See Home Care Ass'n of Am. V . Weil, 799 F.3d 1084 (D.C. Cir. 2015). After the circuit court's decision, the Department of Labor issued guidance stating that it would not institute enforcement proceedings for violations of the amended regulations until 30 days after the Court of Appeals issued a mandate making its opinion effective, which the appellate court subsequently did on October 13, 2015. See Application of the Fair Labor Standards Act to Domestic Service: Announcement of 30–Day Period of Non–Enforcement, 80 Fed. Reg. 55,029 (Sept. 14, 2015). The Department of Labor began enforcing the amended regulations on November 12, 2015. See Application of the Fair Labor Standards Act to Domestic Service: Dates of Previously Announced 30–Day Period of Non–Enforcement, 80 Fed. Reg. 65,646 (Oct. 27, 2015).

Guerrero and Assisting Hands do not dispute that: (1) Assisting Hands is a "covered employer"³ ; (2) Guerrero provided companionship services;⁴ (3) Guerrero often worked more than 40 hours per week; and (4) under the amended regulations, Guerrero is no longer an exempt employee, and Assisting Hands must pay her overtime wages. The parties dispute only the effective date of the amended regulations. Assisting Hands argues that the effective date is October 13, 2015, the date that the Court of Appeals' mandate to overturn the district court's decision took effect. Guerrero argues that the effective date is January 1, 2015, the date set by the Department of Labor in its final rule. Assisting Hands did not pay Guerrero overtime wages until October 13, 2015, except for holiday hours per internal policy. The parties also dispute one pay period ending November 29, 2015, in which Guerrero was paid 34.75 hours of overtime at $12.075 per hour instead of $15 per hour.

II. LEGAL STANDARD

Summary judgment is authorized where there is no genuine issue of material fact. FED. R. CIV. P. 56(c). The party seeking summary judgment bears the initial burden of demonstrating the absence of a genuine issue of material fact. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). The party opposing summary judgment may not simply rest upon mere allegations or denials of the pleadings; the non-moving party must establish the essential elements of its case on which it will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322–23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ; Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). This requires more than a scintilla of evidence; a jury must be able to reasonably find for the non-movant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 254, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). An employee who brings suit under the Fair Labor Standards Act for unpaid overtime compensation has the burden of proving that she performed work for which she was not property compensated. Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687–88, 66 S.Ct. 1187, 90 L.Ed. 1515 (1946).

III. ANALYSIS

A. Guerrero Was an Exempt Employee Before 2015

It is unclear whether Guerrero asserts that she was a non-exempt employee before 2015, under the old regulations. However, the evidence supporting Guerrero's claim relates only to pay periods ending in 2015. Therefore, her exemption status before 2015 under the old regulations is irrelevant.⁵ Accordingly, the Court GRANTS Assisting Hands' motion for summary judgment to the extent that Guerrero's claim relates to the old regulations.

B. The Effective Date of the Amended Regulations is January 1, 2015

This is an issue of first impression in the Eleventh Circuit. District courts are split on whether the effective date of the amended regulations is January 1, October 13, or November 12, 2015. See, e.g., Dillow v. Home Care Network, Inc., No. 1:16-cv-612, 2017 WL 749196, 2017 U.S. Dist. LEXIS 27133 (S.D. Ohio Feb. 27, 2017) (effective January 1 ); Cummings v. Bost, Inc., 218 F.Supp.3d 978 (W.D. Ark. 2016) (effective January 1 ); Lewis–Ramsey v. Evangelical Lutheran Good Samaritan Soc'y, 215 F.Supp.3d 805 (S.D. Iowa 2016) (effective January 1 ); Kinkead v. Humana, Inc., 206 F.Supp.3d 751 (D. Conn. 2016) (effective January 1 ); Bangoy v. Total Homecare Solutions, LLC, No. 1:15-CV-573, 2015 WL 12672727, 2015 U.S. Dist. LEXIS 177859 (S.D. Ohio Dec. 21, 2015) (effective November 12 ).⁶

Assisting Hands argues that the effective date is no earlier than October 13, 2015, when Assisting Hands began paying overtime wages to its home health care aides. Guerrero argues that the effective date is January 1, 2015. The parties' arguments mirror the reasoning on either side of the district court split, with Assisting Hands relying on Bangoy and Guerrero relying on Kinkead, Lewis–Ramsey and Cummings .⁷ The Court agrees with the more recent well-reasoned opinions that conclude the effective date is January 1, 2015.

The Bangoy court was the first to address the issue and held that the effective date was November 12, 2015. The court reasoned that permitting a plaintiff to recover for a violation of the amended regulations while the vacatur was in effect would give the amended regulations an impermissible retroactive effect. See 2015 WL 12672727, at *3, 2015 U.S. Dist. LEXIS 177859, at *7. The court believed that the employer was entitled to rely on the district court's vacatur in not paying overtime because forcing employers to comply with the amended regulations while they were vacated and on appeal would put employers in "an untenable position." See id. The court also was persuaded by the Department of Labor's decision to delay enforcement actions until November 12, 2015 as a strong suggestion that the amended regulations should not be given retroactive effect in cases between private parties. See id. at *3, 2015 U.S. Dist. LEXIS 177859, at *7–8.

Since Bangoy, all four district judges to analyze the issue in depth—including one judge in the same district—have concluded that the effective date is January 1, 2015.⁸ Contrary to Bangoy, these courts follow "the well-established rule that judicial decisions are presumptively retroactive in their effect and operation." See, e.g., Kinkead, 206 F.Supp.3d at 754 (citing Harper v. Virginia Dep't of Taxation, 509 U.S. 86, 97, 113 S.Ct. 2510, 125 L.Ed.2d 74 (1993) (circuit court ruling "is the controlling interpretation of federal law and must be given full retroactive effect in all cases still open on direct review and as to all events, regardless of whether such events predate or postdate our announcement of the rule.")); see also Hawknet, Ltd. v. Overseas Shipping Agencies, 590 F.3d 87, 91, n.7 (2d Cir. 2009) (despite fact that "the parties relied on [prior overruled decisions] when structuring their transactions, the Supreme...