Dillow v. Home Care Network, Inc.

• Decision Date: 27 February 2017
• Docket Number: Case No. 1:16-cv-612
• Parties: RHONDA DILLOW, Plaintiff, v. HOME CARE NETWORK, INC., Defendant.
• Court: U.S. District Court — Southern District of Ohio

RHONDA DILLOW, Plaintiff, v. HOME CARE NETWORK, INC., Defendant.

Case No. 1:16-cv-612

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF OHIO WESTERN DIVISION

February 27, 2017

Judge Timothy S. Black

ORDER DENYING DEFENDANT'S MOTION FOR PARTIAL SUMMARY JUDGMENT (Doc. 15)

I. INTRODUCTION

This case is before the Court regarding Defendant's motion for partial summary judgment filed December 16, 2016 (Doc. 15) and the parties' responsive memoranda (Docs. 16, 20). For the reasons set forth below, Defendant's motion for partial summary judgment (Doc. 15) is DENIED.

II. BACKGROUND

Plaintiff Rhonda Dillow has brought this civil action against Defendant Home Care Network, Inc., seeking remuneration for unpaid overtime on behalf of the following proposed class:

All domestic-service employees who (1) worked for Defendants at any time during the Relevant Time Period and (2) worked more than 40 hours in one or more workweeks during the Relevant Time Period.

(Doc. 20, at 1).

The impetus for this action was a recent change in the overtime pay requirements imposed by the Fair Labor Standards Act of 1938 (FLSA), 29 U.S.C. § 201 et seq. The FLSA generally requires employers to pay their employees 150% of their regular pay rate for all hours worked in excess of 40 hours per week. There are enumerated exceptions to this rule, however, and, in 1974, the FLSA was amended to state that "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 is exempt from the FLSA's overtime requirement." 29 U.S.C. § 213(a)(15).

The following year, the DOL issued regulations implementing the 1975 FLSA amendments, including the companionship exemption. Two of the 1975 regulations, in particular, are relevant to this case.

First, the "Third Party Employment" regulation explained that the statutory companionship exemption applied to caregivers "who are employed by an employer or agency other than the family or household using their services." 29 C.P.R. § 552.109. Second, the "Companionship Services" regulation defined the companionship services referenced by the statutory companionship exemption to mean "those services which provide fellowship, care, and protection" for elderly or infirm persons unable to care for themselves, excluding services performed by "trained personnel" including nurses. 29 C.P.R. § 552.6. The Companionship Services regulation also allowed employees who were exempt under the companionship exemption to perform "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." Id.

In October 2013, the DOL created a Final Rule amending the regulations as they relate to "companionship services" with an effective date of January 1, 2015. See Application of the Fair Labor Standards Act to Domestic Service, 78 Fed. Reg. 60454, 60455 (Oct. 1, 2013). These new regulations held that domestic-service workers such as the named Plaintiff in this case who were employed by third-party agencies were no longer exempt from the mandatory overtime rules. Several third-party employers of domestic workers brought suit against the DOL in the United States District Court for the District of Columbia; that court concluded that the DOL exceeded its rule-making authority in eliminating the FLSA exemption for home health workers and vacated the rule. See Home Care Assoc. of Am. v. Weil, 78 F.Supp.3d 123 (D.D.C. 2015).

On August 21, 2015, the Court of Appeals for the District of Columbia reversed the district court's vacatur. See Home Care Assoc. of Am. v. Weil, 799 F.3d 1084, 1097 (D.C. Cir. 2015). Following that decision, the DOL issued guidance stating that it would not institute enforcement proceedings for violations of the amended Final Rule until 30 days after the Court of Appeals issued a mandate making its opinion effective, which the appellate court subsequently did on October 13, 2015. See 80 Fed. Reg. 55029 (Sept. 14, 2015). The DOL then indicated that it would not bring enforcement actions for violations of the rule prior to November 12, 2015. See Application of the Fair Labor Standards Act to Domestic Service: Dates of Previously Announced 30-Day Period of Non-Enforcement, 80 Fed. Reg. 65646 (Oct. 27, 2015).

The validity and enforceability of the DOL's new regulations regarding overtime for companionship services moving forward is not in dispute. The issue before this Courtis when exactly those regulations became enforceable, otherwise known as the regulations' "effective date." Plaintiff contends that the regulations' listed effective date of January 1, 2015, is when they became enforceable, meaning that employers of affected individuals could be liable for all unpaid overtime worked since that date. Defendant contends that, because the regulations were invalidated by the D.C. District Court's ruling in Weil and were not reinstated before the October 13, 2015 mandate issued by the overturning appellate court, the effective date could not be before the issuance of the mandate.

III. ANALYSIS

Generally, judicial decisions are applied retroactively. This principle was affirmed by the United States Supreme Court in Harper v. Virginia Dep't of Taxation, 509 U.S. 86 (1993). The Court in Harper stated:

When this Court applies a rule of federal law to the parties before it, that rule is the controlling interpretation of federal law and must be given full retroactive effect in all cases still open on direct review and as to all events, regardless of whether such events predate or postdate our announcement of the rule. This rule extends Griffith's ban against "selective application of new rules." 479 U.S., at 323, 107 S.Ct., at 713.Mindful of the "basic norms of constitutional adjudication" that animated our view of retroactivity in the criminal context, id., at 322, 107 S.Ct., at 712, we now prohibit the erection of selective temporal barriers to the application of federal law in noncriminal cases. In both civil and criminal cases, we can scarcely permit "the substantive law [to] shift and spring" according to "the particular equities of [individual parties'] claims" of actual reliance on an old rule and of harm from a retroactive application of the new rule. Beam, supra, 501 U.S., at 543, 111 S.Ct., at 2447 (opinion of SOUTER, J.). Our approach to retroactivity heeds the admonition that "[t]he Court has no more constitutional authority in civil cases than in criminal cases to disregard current law or to treat similarly situated litigants differently." **2518 American Trucking, supra, 496 U.S., at 214, 110 S.Ct., at 2350 (STEVENS, J., dissenting).

Harper, 509 U.S., at 97. Plaintiff argues that Harper requires this Court to find that the D.C. Circuit Court of Appeals's decision in Weil was retroactive, and that the DOL's new regulations concerning companionship services were effective and enforceable as of January 1, 2015, the regulations' listed effective date.

Defendant argues that Harper did not announce an absolute rule of retroactivity. "[W]hen a court announces a new rule of law but does not apply the new rule to the parties before it, a Chevron Oil analysis¹ is used to determine retroactivity so long as the retroactivity is not applied selectively." (Doc. 18, at 2 (quoting Nunez-Reyes v. Eric Holder, Jr., 646 F.3d 684, 698 (9th Cir. 2011)). Defendant suggests that the D.C. Circuit Court of Appeals did not apply its ruling in Weil to the parties before the court at the time, and that a Chevron analysis of the DOL's new regulations is necessary to determine whether the law should apply retroactively or prospectively.

Defendant mischaracterizes the Weil ruling. The question before the D.C. Circuit Court in Weil was whether the DOL's new regulations were a reasonable interpretation of the FLSA or whether they were arbitrary and capricious in violation of the standard set forth by Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984). The D.C. Circuit Court of Appeals held that the regulations were a reasonable interpretation of the FLSA under Chevron and that they were neither arbitrary nor capricious. Weil, 799 F.3d, at 59-61. This Court fails to see how the Weil court did not apply its ruling to the parties before it at the time. Weil held that the regulations in question that had alreadybeen issued were valid and enforceable; it did not find any new interpretation of the law that would only apply towards future DOL regulations. In light of the Weil ruling's retroactive application, this Court finds that the enforceability of the DOL regulations at issue in this case is applied retroactively as well, and that their effective date is January 1, 2015.

This exact issue has been considered by several district courts, and a split has developed. A court in this district was the first district court to decide the effective date of the DOL's new rule regarding overtime regulations for companionship services, holding that the defendant employers in that case were not liable for unpaid overtime for affected employees prior to the D.C. Circuit Court of Appeals's mandate in Weil in October 2015. Bangoy v .Total Homecare Solutions, LLC, 2015 WL 12672727 (S.D. Ohio Dec. 21, 2015). The Bangoy opinion found that forcing employers to comply with the DOL's overtime rule while it was vacated and on appeal would put them "in an untenable position." Id. at *3. The court in Bangoy was further persuaded by the DOL's decision not to bring enforcement actions for unpaid overtime that occurred during the appeal process. Finally, the Bangoy court noted that the plaintiffs in that case "cite[d] no authority" for their argument.²

Since the Bangoy decision, several district court cases examining the exact same issue have ruled that employers are liable for unpaid overtime wages to employees affected by the new regulations from the January 1, 2015 implementation...