Paczkowski v. My Choice Family Care, Inc.
384 F. Supp. 3d 991
W.D. Wis.2019Background
- Plaintiff Katy Paczkowski, a former Care Manager, sued My Choice Family Care, Inc. under the FLSA and Wisconsin wage-and-hour law claiming unpaid overtime for Care Managers.
- My Choice is a 501(c)(3) nonprofit managed care organization providing case management services to adults and seniors with disabilities; the parties agree it is a nonprofit.
- The dispute centers on whether Wisconsin Admin. Code ch. DWD 274 (overtime rule) applies to My Choice; Chapter 274 applies to employees in certain establishments, including "mercantile establishment."
- DWD defines "mercantile" as "pertaining to merchants or trade" and states it is "synonymous with the word commercial," and then supplies a multi-clause definition of "commercial." The definition is unclear and dates from 1981.
- DWD website guidance states generally nonprofits are not covered by the overtime law, except where employees work in certain establishments (e.g., restaurants, hotels).
- The court considered statutory construction principles and deference to agency interpretation and concluded the regulation does not apply to My Choice; the state-law claim was dismissed (plaintiff given 30 days to amend).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether DWD ch. 274 covers nonprofit My Choice | "Synonymous" is broad; "commercial" can include organizations similar to commercial ones, so some nonprofits fall within "mercantile" | "Synonymous" means equivalent; "commercial" = designed for profit, so nonprofits are excluded | Court: Definition is ambiguous but agency interpretation and ordinary meaning support excluding nonprofits except in limited circumstances; My Choice not covered |
| Whether the semicolon-separated clause in "commercial" creates alternative meanings that capture nonprofits | The semicolon creates an independent meaning (e.g., "designed for mass appeal") that could include My Choice | Even if separate, the clause likely targets typical profit-oriented mass-market goods/services, not a nonprofit managed-care org | Court: Clause ambiguous but does not plausibly encompass My Choice; favors nonprofit exclusion |
| Whether DWD's online Q&A supports broader coverage of nonprofits | DWD acknowledges some nonprofits must pay overtime, implying broader coverage | Q&A indicates the exception is narrow: when nonprofit employees work in certain establishments (restaurants/hotels) | Court: Q&A supports defendant's narrow reading; agency guidance entitled to due weight |
| Whether certification by a state agency makes My Choice a state-created "other body" under the rule | Plaintiff argues certification means My Choice is an "other body in state or local government" subject to the rule | Defendant: Certification alone doesn't make it a government body | Court: Rejected plaintiff's fallback; mere certification insufficient |
Key Cases Cited
- Orion Flight Servs., Inc. v. Basler Flight Serv., 290 Wis. 2d 421, 714 N.W.2d 130 (Wis. 2006) (statutory construction principles)
- Fuchsgruber v. Custom Accessories, Inc., 244 Wis. 2d 758, 628 N.W.2d 833 (Wis. 2001) (ordinary meaning governs interpretation)
- State ex rel. Kalal v. Circuit Court for Dane Cty., 271 Wis. 2d 633, 681 N.W.2d 110 (Wis. 2004) (context and structure in statutory interpretation)
- Williams v. Integrated Community Services, Inc., 303 Wis. 2d 697, 736 N.W.2d 226 (Wis. Ct. App. 2007) (deference to agency interpretation of own regulation when not clearly erroneous)
- Tetra Tech EC, Inc. v. Wis. Dep't of Revenue, 382 Wis. 2d 496, 914 N.W.2d 21 (Wis. 2018) (limits and guidance on deference to agency interpretations)
- Weissman v. Tyson Prepared Foods, Inc., 350 Wis. 2d 380, 838 N.W.2d 502 (Wis. Ct. App. 2013) (DWD authority to fix hours and overtime rules)