Home Care Association v. David Weil
799 F.3d 1084
D.C. Cir.2015Background
- The Fair Labor Standards Act (FLSA) generally mandates minimum wage and overtime but exempts certain domestic-service workers, including those providing "companionship services" and live-in domestic workers.
- From 1975, DOL regulations treated employees of third-party home-care agencies as within those exemptions; the Supreme Court upheld that interpretation in Long Island Care at Home, Ltd. v. Coke.
- The home-care industry evolved: more professionalized, agency-employed caregivers providing skilled in-home care rather than traditional "elder sitters."
- In 2013 DOL issued revised regulations excluding third-party employers from claiming the companionship and live-in exemptions and narrowing the definition of "companionship services."
- Trade associations representing home-care agencies challenged the 2013 rules under the APA; the district court vacated the third-party-employer rule and the narrowed companionship definition. The government appealed.
- The D.C. Circuit reversed, upholding DOL authority to change course, finding the regulations a permissible Chevron construction and not arbitrary or capricious; the court dismissed the agencies’ challenge to the narrowed definition for lack of standing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Congress unambiguously foreclosed agency authority to define whether third-party-employed home-care workers fall within the companionship and live-in exemptions | Home Care Ass'n: Statutory text limits exemptions to workers employed directly by households; no delegation to DOL for excluding employers | DOL: Congress granted broad rulemaking authority in the 1974 Amendments (§29(b)); Coke confirms agency discretion to resolve third-party question | Court: Chevron step one loses—Coke already held the statute does not answer the question and delegated the matter to DOL; agency authority affirmed |
| Whether DOL’s exclusion of third-party employers is a permissible interpretation of the statute (Chevron step two) | Agencies: Total exclusion of third-party employers is impermissible and inconsistent with exemptions’ text | DOL: Given statutory purpose to expand coverage and to construe exemptions narrowly, excluding third-party employers to extend protections is reasonable | Court: DOL’s interpretation is reasonable and upheld under Chevron step two |
| Whether DOL’s reversal of its longstanding regulatory position was arbitrary and capricious | Agencies: DOL failed to provide adequate justification for reversing four decades of policy; required a heightened showing | DOL: Provided reasoned explanation based on industry changes, workforce professionalization, and statutory purpose; considered comments and state experiences | Court: Change was accompanied by reasoned explanation; not arbitrary or capricious (no heightened standard required) |
| Whether appellees have standing to challenge the narrowed definition of "companionship services" once the third-party-employer rule stands | Agencies: Vacatur of third-party rule created standing to challenge §552.6; the narrowed definition harms their business | DOL: If third-party-employer exclusion remains, agencies cannot rely on the exemption and thus suffer no injury from §552.6 revision | Court: No Article III jurisdiction to review §552.6 because appellees lack standing absent vacatur of §552.109 |
Key Cases Cited
- Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158 (2007) (agency discretion to resolve whether third-party-employed companions fall within the exemption)
- Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) (two-step framework for reviewing agency statutory interpretations)
- National Cable & Telecommunications Ass'n v. Brand X Internet Services, 545 U.S. 967 (2005) (deference to reasonable agency constructions even where prior court interpretation existed)
- Gonzales v. Oregon, 546 U.S. 243 (2006) (agency authority interpreted in light of broad statutory delegations)
- FCC v. Fox Television Stations, Inc., 556 U.S. 502 (2009) (requirements for reasoned explanation when an agency changes position)
- A.H. Phillips, Inc. v. Walling, 324 U.S. 490 (1945) (FLSA exemptions construed narrowly in light of remedial purposes)
- Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A., 511 U.S. 164 (1994) (legislative inaction is a weak basis for statutory interpretation)
- BellSouth Telecommunications, Inc. v. FCC, 469 F.3d 1052 (D.C. Cir. 2006) (deferential review of agency predictive judgments)