66 F.4th 348
1st Cir.2023Background
- Plaintiffs (four named former au pairs) sued Cultural Care, a DOS‑designated au‑pair “sponsor,” asserting FLSA, multiple state wage‑and‑hour, and state deceptive‑trade‑practice claims based on Cultural Care’s role in placing and supervising au pairs and advising host families about a $195.75 weekly stipend.
- Cultural Care moved to dismiss arguing (1) derivative sovereign immunity under Yearsley, (2) federal preemption by DOS regulations of state claims, and (3) failure to plausibly plead that Cultural Care was the plaintiffs’ “employer.”
- The District Court denied dismissal in large part (granted only limited dismissal on standing for two state claims), concluding Yearsley did not shield Cultural Care and plaintiffs plausibly alleged employer status and non‑preemption.
- Cultural Care filed an interlocutory appeal, asserting appellate jurisdiction under the collateral order doctrine for the Yearsley claim and pendent appellate jurisdiction for the remaining issues; the District Court stayed proceedings pending appeal.
- The First Circuit examined (a) whether Cultural Care is entitled to Yearsley protection (and whether collateral‑order review is appropriate) and (b) whether pendent appellate jurisdiction should allow review of preemption and FLSA employer issues.
Issues
| Issue | Plaintiff's Argument (plaintiffs/appellees) | Defendant's Argument (Cultural Care) | Held |
|---|---|---|---|
| Whether Cultural Care is entitled to Yearsley derivative sovereign immunity | Yearsley is at most a defense to liability and Cultural Care did not show it acted as a government agent authorized to commit the alleged violations | Yearsley protects private entities that act as government agents pursuant to validly conferred authority; Cultural Care acted exactly as DOS directed | Cultural Care failed to show it was "authorized and directed" by the government to commit the conduct alleged; Yearsley protection denied at this stage |
| Whether denial of Yearsley protection is immediately appealable under the collateral order doctrine | Denial of Yearsley is not appealable here because Yearsley is only a defense to liability and thus reviewable after final judgment | Collateral order doctrine permits interlocutory appeal of immunity denials; Cultural Care urges immediate review | Court assumed jurisdictional questions arguable but decided the appeal on the merits (no Yearsley entitlement); it did not resolve across‑the‑board whether Yearsley is an immunity from suit |
| Whether DOS regulations preempt the state wage and deceptive‑practice claims | Plaintiffs: state claims are not preempted; DOS regs do not bar higher state protections | Cultural Care: DOS regulations and guidance preempt state claims and required the conduct at issue | First Circuit declined to exercise pendent appellate jurisdiction over the preemption issue and therefore did not decide preemption; that portion of the appeal was dismissed for lack of appellate jurisdiction |
| Whether plaintiffs plausibly alleged Cultural Care is an "employer" under the FLSA | Plaintiffs: allegations of monitoring, training, recordkeeping, wage instructions plausibly allege employer control | Cultural Care: it merely performed sponsor functions under DOS regulations and is not an employer under FLSA | District Court found plaintiffs alleged plausible employer status; First Circuit declined pendent appellate jurisdiction to review that issue and dismissed the appeal as to it |
Key Cases Cited
- Yearsley v. W.A. Ross Constr. Co., 309 U.S. 18 (recognizes contractor protection when acting under valid governmental authority)
- Mitchell v. Forsyth, 472 U.S. 511 (1985) (denial of a substantial claim of absolute immunity is appealable pre‑final judgment)
- Digital Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863 (1994) (orders denying immunity‑based dismissals are strong candidates for interlocutory appeal)
- Wyatt v. Cole, 504 U.S. 158 (1992) (immunities may be effectively lost if erroneously forced to trial)
- Campbell‑Ewald Co. v. Gomez, 577 U.S. 153 (2016) (Yearsley protection unavailable where contractor violated government’s explicit instructions)
- Filarsky v. Delia, 566 U.S. 377 (2012) (government‑agent immunity principles and analogies to private actors)
- In re World Trade Ctr. Disaster Site Litig., 521 F.3d 169 (2d Cir. 2008) (distinguishing Yearsley/Boyle protections where contractor retained design discretion)
- Cunningham v. Gen. Dynamics Info. Tech., Inc., 888 F.3d 640 (4th Cir. 2018) (Yearsley protects contractors who acted "exactly as directed")
- McMahon v. Presidential Airways, Inc., 502 F.3d 1331 (11th Cir. 2007) (exercised collateral‑order jurisdiction over Yearsley‑type claim)
- Capron v. Office of Attorney General of Massachusetts, 944 F.3d 9 (1st Cir. 2019) (interpretation of DOS au‑pair regulatory scheme relevant to scope of sponsor duties)