Home Care Ass'n of Am. v. Weil

799 F.3d 1084

HOME CARE ASSOCIATION OF AMERICA, et al., Appellees

v.David WEIL, sued in his official capacity, Administrator, Wage & Hour Division, et al., Appellants.

No. 15–5018.

United States Court of Appeals, District of Columbia Circuit.

Argued May 7, 2015.

Decided Aug. 21, 2015.

Alisa B. Klein, Attorney, U.S. Department of Justice, argued the cause for appellants. With her on the briefs were Vincent H. Cohen, Jr., Acting U.S. Attorney, Beth S. Brinkmann, Deputy Assistant Attorney General, and Michael S. Raab, Attorney.

Eric T. Schneiderman, Attorney General, Office of the Attorney General for the State of New York, Barbara Underwood, Solicitor General, Seth Kupferberg, Assistant Attorney General, George Jepson, Attorney General, Office of the Attorney General for the State of Connecticut, Lisa Madigan, Attorney General, Office of the Attorney General for the State of Illinois, Tom Miller, Attorney General, Office of the Attorney General for the State of Iowa, Brian E. Frosh, Attorney General, Office of the Attorney General for the State of Maryland, Maura Healey, Attorney General, Office of the Attorney General for the Commonwealth of Massachusetts, Lori Swanson, Attorney General, Office of the Attorney General for the State of Minnesota, and Hector H. Balderas, Attorney General, Office of the Attorney General for the State of New Mexico, were on the brief for amici curiae States of New York, et al. in support of appellants.

Kate Andrias was on the brief for amici curiae Paraprofessional Healthcare Institute and 26 Consumer and Policy Organizations in support of appellants.

Arthur B. Spitzer was on the brief for amici curiae Women's Rights, Civil Rights, and Human Rights organizations and scholars in support of appellants.

Judith A. Scott, Nicole G. Berner, Renee M. Gerni, Craig Becker, Lynn Rhinehart, William Lurye, and Claire Prestel were on the brief for amici curiae American Federation of Labor and Congress of Industrial Organizations, et al. in support of appellants.

Jonathan S. Massey was on the brief for amici curiae Members of Congress in support of appellants.

Daniel B. Kohrman was on the brief for amicus curiae AARP in support of appellants.

Samuel R. Bagenstos was on the brief for amicus curiae the American Association of People with Disabilities in support of appellants.

Maurice Baskin argued the cause for appellees. With him on the brief was William A. Dombi.

Derek Schmidt, Attorney General, Office of the Attorney General for the State of Kansas, Jeffrey A. Chanay, Chief Deputy Attorney General, Toby Crouse, Special Assistant Attorney General, Mark Brnovich, Attorney General, Office of the Attorney General for the State of Arizona, Samuel S. Olens, Attorney General, Office of the Attorney General for the State of Georgia, Bill Schuette, Attorney General, Office of the Attorney General for the State of Michigan, Adam Paul Laxalt, Attorney General, Office of the Attorney General for the State of Nevada, Wayne Stenehjem, Attorney General, Office of the Attorney General for the State of North Dakota, Herbert H. Slatery, III, Attorney General, Office of the Attorney General for the State of Tennessee, Ken Paxton, Attorney General, Office of the Attorney General for the State of Texas, and Brad D. Schimel, Attorney General, Office of the Attorney General for the State of Wisconsin were on the brief for amici curiae States of Kansas, et al.

Stephanie Woodward was on the brief for amici curiae ADAPT and the National Council On Independent Living in support of appellees.

Michael Billok was on the brief for amicus curiae the Consumer Directed Personal Assistance Association of New York in support of appellees.

Michaelle L. Baumert and Henry L. Wiedrich were on the brief for amici curiae Members of Congress in support of appellees.

Before: GRIFFITH, SRINIVASAN and PILLARD, Circuit Judges.

Opinion

Opinion for the Court filed by Circuit Judge SRINIVASAN.

SRINIVASAN, Circuit Judge:

The Fair Labor Standards Act's protections include the guarantees of a minimum wage and overtime pay. The statute, though, has long exempted certain categories of “domestic service” workers (workers providing services in a household) from one or both of those protections. The exemptions include one for persons who provide “companionship services” and another for persons who live in the home where they work. This case concerns the scope of the exemptions for domestic-service workers providing either companionship services or live-in care for the elderly, ill, or disabled. In particular, are those exemptions from the Act's protections limited to persons hired directly by home care recipients and their families? Or do they also encompass employees of third-party agencies who are assigned to provide care in a home?

Until recently, the Department of Labor interpreted the statutory exemptions for companionship services and live-in workers to include employees of third-party providers. The Department instituted that interpretation at a time when the provision of professional care primarily took place outside the home in institutions such as hospitals and nursing homes. Individuals who provided services within the home, on the other hand, largely played the role of an “elder sitter,” giving basic help with daily functions as an on-site attendant.

Since the time the Department initially adopted that approach, the provision of residential care has undergone a marked transformation. The growing demand for long-term home care services and the rising cost of traditional institutional care have fundamentally changed the nature of the home care industry. Individuals with significant care needs increasingly receive services in their homes rather than in institutional settings. And correspondingly, residential care increasingly is provided by professionals employed by third-party agencies rather than by workers hired directly by care recipients and their families.

In response to those developments, the Department recently adopted regulations reversing its position on whether the FLSA's companionship-services and live-in worker exemptions should reach employees of third-party agencies who are assigned to provide care in a home. The new regulations remove those employees from the exemptions and bring them within the Act's minimum-wage and overtime protections. The regulations thus give those employees the same FLSA protections afforded to their counterparts who provide largely the same services in an institutional setting.

Appellees, three associations of home care agencies, challenged the Department's extension of the FLSA's minimum-wage and overtime provisions to employees of third-party agencies who provide companionship services and live-in care within a home. The district court invalidated the Department's new regulations, concluding that they contravene the terms of the FLSA exemptions. We disagree. The Supreme Court's decision in Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158, 127 S.Ct. 2339, 168 L.Ed.2d 54 (2007), confirms that the Act vests the Department with discretion to apply (or not to apply) the companionship-services and live-in exemptions to employees of third-party agencies. The Department's decision to extend the FLSA's protections to those employees is grounded in a reasonable interpretation of the statute and is neither arbitrary nor capricious. We therefore reverse the district court and remand for the grant of summary judgment to the Department.

I.

The FLSA, 29 U.S.C. §§ 201 et seq., generally requires covered employers to pay a minimum wage, and also requires payment of overtime compensation at an hourly rate equaling 150% of normal pay for weekly work hours beyond forty. 29 U.S.C. §§ 206(a), 207(a)(1). The Fair Labor Standards Amendments of 1974, Pub. L. No. 93–259, 88 Stat. 55, extended the Act's minimum-wage and overtime protections to employees in “domestic service,” i.e., service in a household. 29 U.S.C. §§ 206(f), 207(l ). The congressional committee reports accompanying the 1974 Amendments explained that domestic service “includes services performed by persons employed as cooks, butlers, valets, maids, housekeepers, governesses, janitors, laundresses, caretakers, handymen, gardeners, footmen, grooms, and chauffeurs of automobiles for family use.” S.Rep. No. 93–690, at 20 (1974); H.R.Rep. No. 93–913, at 35–36 (1974).

The 1974 Amendments also exempted defined categories of domestic-service workers from certain FLSA protections. This case concerns two of those exemptions. First, 29 U.S.C. § 213(a)(15), pertaining to companionship services, provides that the FLSA's minimum-wage and overtime requirements shall not apply with respect 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).” Second, 29 U.S.C. § 213(b)(21), pertaining to live-in domestic-service workers, provides that the Act's overtime protections shall not apply with respect to “any employee who is employed in domestic service in a household and who resides in such household.” The 1974 Amendments included a broad grant of rulemaking authority empowering the Secretary of Labor to “prescribe necessary rules, regulations, and orders with regard to the amendments made by this Act.” 1974 Amendments, Pub. L. No. 93–259, § 29(b), 88 Stat. 76.

In 1975, the Department of Labor adopted implementing regulations. Those regulations addressed the treatment of companionship-services workers and live-in domestic-service workers who are employed by third-party agencies. The regulations provided that the § 213(a)(15) exemption for companionship services and the § 213(b)(21) exemption for live-in workers included individuals “who [were] employed by an employer other than the family or household using their services.” 29 C.F.R. § 552.109(a), (c) (2014). The regulations also defined the term ...