Vance Anderson v. Hearts With Hope Foundation, 713 F. App'x 278

Hearts With Hope Foundation (HWHF) operates two licensed group homes providing 24-hour residential care for abused, neglected, or abandoned children placed by Child Protective Services (CPS).
HWHF staff are unlicensed for medical/psychiatric diagnosis or therapy; mental-health services are provided by outside licensed professionals on an as-needed basis. HWHF excludes high-risk children with intensive psychiatric needs.
After HR training raised FLSA concerns, HWHF sought DOL guidance in 2012–2013; DOL audits indicated HWHF likely was not covered, but HWHF nonetheless paid overtime for a period and later revised its overtime policy.
Anderson (a former Direct Care Personnel employee) filed a collective action alleging HWHF violated the FLSA by failing to pay overtime for hours over 40 per week. The district court granted summary judgment for HWHF.
The district court held HWHF was not an "institution primarily engaged in the care of the mentally ill or defective" for purposes of FLSA enterprise coverage; Anderson appealed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether HWHF is an "enterprise" covered by the FLSA under §§ 3(r)–(s) because it is "primarily engaged in the care of the mentally ill or defective"	Anderson: HWHF is covered because a majority of residents have mental/behavioral issues and staff implement therapeutic programs, so the homes are primarily engaged in caring for the mentally ill	HWHF: Primary purpose is to provide safe residential placement for abused/neglected children, not to diagnose or treat mental illness; psychiatric care is outsourced and HWHF excludes intensive psychiatric cases	Court: Affirmed summary judgment for HWHF — not primarily engaged in care of the mentally ill; FLSA enterprise coverage not met

Brennan v. Harrison County, Mississippi, 505 F.2d 901 (5th Cir.) (look to the institution's primary, essential purpose to determine whether it is "primarily engaged" in care of the mentally ill)
Tony & Susan Alamo Found. v. Sec’y of Labor, 471 U.S. 290 (U.S.) (nonprofit status does not automatically exempt commercial activity performed for a business purpose)
Feist v. Louisiana Dept. of Justice, 730 F.3d 450 (5th Cir.) (summary judgment review standard cited)
Anderson v. Liberty Lobby, 477 U.S. 242 (U.S.) (standard for genuine dispute of material fact at summary judgment)
Sobrinio v. Medical Center Visitor’s Lodge, Inc., 474 F.3d 828 (5th Cir.) (plaintiff bears burden to show FLSA coverage)