Home Care Ass'n of Am. v. Weil, Case No. 14–cv–967 RJL

• Citation: 78 F.Supp.3d 123
• Decision Date: 14 January 2015
• Docket Number: Case No. 14–cv–967 RJL
• Parties: Home Care Association of America, et al., Plaintiffs, v. David Weil, et al., Defendants.
• Court: United States District Courts. United States District Court (Columbia)

78 F.Supp.3d 123

Home Care Association of America, et al., Plaintiffs

v.David Weil, et al., Defendants.

Case No. 14–cv–967 RJL

United States District Court, District of Columbia.

Signed January 14, 2015

Maurice Baskin, Littler Mendelson, P.C., William Alexander Dombi, Washington, DC, for Plaintiffs.

Julie Shana Saltman, U.S. Department of Justice, Washington, DC, for Defendants.

MEMORANDUM OPINION

[Dkt. # 23]

RICHARD J. LEON, United States District Judge

On December 22, 2014, I issued an Opinion and Order vacating the Third Party Employment provision of the Department of Labor's October 2013 regulations implementing the 1974 Amendments to the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201 –19, because the rule conflicted with the statute itself. Dec. 22, 2014 Mem. Op. (“Dec. 22 Op.”) [Dkt. # 21]; Dec. 22, 2014 Order [Dkt. # 22]. Before me now is another challenge by the same plaintiffs¹ to a different part of the same Labor Department regulations. Specifically, plaintiffs seek to vacate the Department of Labor's narrowed definition of “companionship services,” Section 552.6 of the new rule, promulgated in 78 Fed.Reg. 60,557, and to be codified at 29 C.F.R. § 552.6.

On December 24, 2014, plaintiffs moved for emergency injunctive relief to keep Section 552.6 from coming into effect on January 1, 2015. Emergency Mot. for Temporary Stay of Agency Action and Req. for Expedited Consideration (“Pls.' Mot.”) [Dkt. # 23]. I granted a Temporary Restraining Order on December 31, 2014, staying the regulation from going into effect for fourteen days. Dec. 31, 2014 Order [Dkt. # 26]. On January 8, 2015, having reviewed the parties' extensive briefing, I consolidated plaintiffs' motion for a preliminary injunction with consideration of the merits pursuant to Federal Rule of Civil Procedure 65(a)(2). Jan. 8, 2015 Order [Dkt. # 30]. The following day, I heard oral arguments from the parties on the merits of plaintiffs' case, construing plaintiffs' emergency motion as a motion for summary judgment on the merits. See Morris v. District of Columbia, No. 14–cv–0338, 38 F.Supp.3d 57, 61–63, 2014 WL 1648293, at *2 (D.D.C.2014). After consideration of the parties' pleadings, the arguments of counsel, the relevant law, and the entire record in this case, plaintiffs' motion is GRANTED and the Department's revised companionship services regulation currently scheduled to go into effect on January 15, 2015, is VACATED.

BACKGROUND

This matter arises out of the same statutory and regulatory background described more fully in my December 22, 2014 Opinion. See Dec. 22 Op. at 2–7. It concerns the second prong of a two-prong attack on an exemption from paying overtime and minimum wages: the companionship services exemption of the FLSA, codified at 29 U.S.C. § 213(a)(15). I vacated the first prong, the third-party employer exemption, two weeks ago. See Dec. 22 Op. The second prong, of course, is the rewritten “companionship services” definition. The companionship services exemption prevents employers, whether third-party or not, from being required to pay minimum and overtime wages 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).” 29 U.S.C. § 213(a)(15).

The Department of Labor's implementing regulations promulgated in the aftermath of the 1974 Amendments defined companionship services as follows:

As used in section 13(a)(15) of the Act, the term “companionship services” shall mean those services which provide fellowship, care, and protection for a person who, because of advanced age or physical or mental infirmity, cannot care for his or her own needs. Such services may include household work related to the care of the aged or infirm person such as meal preparation, bed making, washing of clothes, and other similar services.

40 Fed.Reg. 7405. The definition further specified that companionship services could include limited general household work, not to exceed 20 percent of total weekly work hours, but that it did not include services “which require and are performed by trained personnel, such as a registered or practical nurse.” Id. This definition remained unchanged for the past 40 years.

In October 2013, however, after engaging in a full notice-and-comment rulemaking process, the Department issued a Final Rule revising its domestic service employment regulations at 29 C.F.R. Part 552. 78 Fed.Reg. 60,454 (“new rule” or “new regulation”). The new rule, with the exception of those provisions challenged by plaintiffs, went into effect on January 1, 2015.² Id.

Together with the eradication of the exemption for third-party employers, the Department issued a new, significantly-narrowed, definition of companionship services, Section 552.6 of the regulation. “As used in section 13(a)(15) of the Act, the term companionship services means the provision of fellowship and protection for an elderly person or person with an illness, injury, or disability who requires assistance in caring for himself or herself.” 78 Fed.Reg. 60,557 (§ 552.6(a) ). Although the new definition included the provision of care, the care provided had to be attendant to, and in conjunction with, the provision of fellowship and protection and it could not exceed 20 percent of the total hours worked per person and per workweek. Id. (§ 552.6(b) ). “Care,” as defined by the new regulation, is assistance with “activities of daily living” like dressing

, feeding, and bathing, as well as assistance with “instrumental activities of daily living” that allow the client to live independently at home, like driving and meal preparation.³

Id.

Plaintiffs are trade associations that represent third-party home care providers that employ millions of workers and provide approximately 90 percent of the services within the scope of the Department's long-standing definition of “companionship services.” Compl. ¶¶ 9–11; Dec. 22 O. at 16. However, the majority of their services would fall outside of the confines of the new, narrower definition. Pls.' Mem. in Supp. of Emergency Mot. for Temp. Stay of Agency Action at 5 (“Pls.' Mem.”) [Dkt. # 23–1].

In their Complaint, filed in June 2014, plaintiffs challenged both the new companionship services definition, Compl. ¶¶ 34–39 (Counts III and IV), and the Department's third-party employment regulation addressed in my previous opinion, id. ¶¶ 26–33 (Counts I and II). Plaintiffs have requested that I vacate both of the challenged provisions of the Department's new rule and enjoin the Department from enforcing them. Compl. at 15 (Prayer for Relief).

Until I vacated the third-party employment regulation on December 22, 2014, however, the third-party employers that comprise plaintiffs' associations were not permitted to “avail themselves” of the companionship services exemption, so changes to its definition would have no direct impact on plaintiffs' members. This new regulatory scheme, as envisioned by the Department, would require third-party employers to pay overtime and minimum wages to those providing services to the elderly and disabled regardless of whether or not those services were encompassed within the new definition. Plaintiffs contend that because they were concerned about their standing to challenge this narrowed definition, they did not move in August for summary judgment on the companionship services challenge when they sought relief on the third-party employment regulation. Pls.' Mem. at 9. But now that third-party employers maintain their ability to utilize the statutory exemption, the regulatory definition of “companionship services” will have a huge impact on plaintiffs' member organizations—as well as other employers and the clients the home care workers serve.

Thus, two days after my December 22, 2014, Opinion and Order vacating the new third-party employment regulation, plaintiffs filed an emergency motion seeking a temporary stay of the effective date of the revised companionship services definition. Pls.' Mot. They now argue that this new, narrower, regulation defining companionship services violates the language and legislative intent of FLSA Section 13(a)(15) because it “remov[es] ‘care,’ for all practical purposes, from the regulatory definition.” Pls.' Mem. at 3–4. They further contend, in essence, that this new definition would have the very same impact on the industry as the third-party employment regulation I just vacated, by effectively repealing the statutory exemption. Pls.' Mem. at 3.

Notwithstanding their public pronouncement of non-enforcement of this regulation for six months, 79 Fed.Reg. 60,974 –75, the defendants declined to agree to a voluntary stay of the new definition's effective date. Pls.' Mot. at 1. Thus, with the January 1, 2015, effective date looming, I heard oral argument on December 31, 2014, granted a two-week temporary restraining order, Dec. 31, 2014 Order, and set an expedited briefing schedule for a preliminary injunction, Dec. 31, 2014 Docket Entry. After reviewing the Department's opposition and the plaintiffs' reply, I decided to consolidate the preliminary injunction hearing with consideration of the merits of plaintiffs' challenge to the definition. Jan. 8, 2015 Order. The parties were provided an opportunity to supplement their briefs should they deem it necessary, id., which the Department did, Defs.' Supplemental Brief [Dkt. # 31], and I heard oral argument on January 9, 2015. Jan. 9, 2015 Docket Entry.

LEGAL STANDARD

On the merits, plaintiffs' motion is one for summary judgment on the administrative record. “Summary judgment is an appropriate mechanism for resolving cases involving administrative rulemaking on the record, particularly where, as here, the case turns chiefly on issues of statutory construction.” Indiv. Reference Servs. Grp., Inc. v. FTC, 145 F.Supp.2d 6, 22 (D.D.C.2001)aff'd sub nom. Trans Union LLC v....