Ray v. L. A. Cnty. Dep't of Pub. Soc. Servs.

• Docket Number: 20-56245
• Decision Date: 04 November 2022
• Citation: 52 F.4th 843
• Parties: Trina RAY; Sasha Walker, individually, and on behalf of all others similarly situated, Plaintiffs-Appellants, v. LOS ANGELES COUNTY DEPARTMENT OF PUBLIC SOCIAL SERVICES, Defendant-Appellee, and California Department of Social Services, Defendant.
• Court: U.S. Court of Appeals — Ninth Circuit

52 F.4th 843

Trina RAY; Sasha Walker, individually, and on behalf of all others similarly situated, Plaintiffs-Appellants,

v.LOS ANGELES COUNTY DEPARTMENT OF PUBLIC SOCIAL SERVICES, Defendant-Appellee,andCalifornia Department of Social Services, Defendant.

No. 20-56245

United States Court of Appeals, Ninth Circuit.

FILED NOVEMBER 04, 2022

Argued and Submitted November 18, 2021 Pasadena, California

Matthew C. Helland (argued) and Daniel S. Brome, Nichols Kaster LLP, San Francisco, California; Philip Bohrer, Bohrer Brady LLC, Baton Rouge, Louisiana; for Plaintiffs-Appellants.

Jennifer M. Hashmall (argued), Jason H. Tokoro, Jeffery B. White, and Emily A. Rodriguez-Sanchirico, Miller Barondess LLP, Los Angeles, California; Lester J. Tolnai, Office of the County Counsel, Los Angeles, California; for Defendant-Appellee.

Jennifer Bacon Henning, California State Association of Counties, Sacramento, California, for Amicus Curiae California State Association of Counties.

Before: Marsha S. Berzon and Johnnie B. Rawlinson, Circuit Judges, and Matthew F. Kennelly,^* District Judge.

Per Curiam Opinion;

Partial Concurrence and Partial Dissent by Judge Berzon

OPINION

Per Curiam The State of California and the County of Los Angeles administer an In-Home Supportive Services program ("IHSS program"), which allows low-income elderly, blind, or disabled residents of the County to hire a provider to help them with daily living activities. In 2013, the U.S. Department of Labor ("DOL") issued a new rule entitling IHSS providers and other homecare workers to overtime pay under the Fair Labor Standards Act ("FLSA"). 78 Fed. Reg. 60,454 (Oct. 1, 2013) (codified at 29 C.F.R. pt. 552). A district court vacated the rule before January 1, 2015, the rule's scheduled effective date. Home Care Ass'n of Am. v. Weil ("Weil "), 76 F. Supp. 3d 138, 148 (D.D.C. 2014). The D.C. Circuit reversed, upholding the rule in a decision that mandated on October 13, 2015. Home Care Ass'n of Am. v. Weil ("Weil II "), 799 F.3d 1084, 1087 (D.C. Cir. 2015). The State began paying overtime wages to IHSS providers on February 1, 2016.

In June 2017, Trina Ray, an IHSS provider in Los Angeles County, filed a putative collective action against the County seeking relief for unpaid overtime wages for the period between January 1, 2015, and February 1, 2016.¹ This is our second published opinion in this case. Our previous opinion, Ray v. County of Los Angeles ("Ray I "), 935 F.3d 703 (9th Cir. 2019), held, first, that the County was not an "arm of the state" with respect to the implementation of the IHSS program and therefore was not entitled to Eleventh Amendment immunity from suit, and, second, that the effect of Weil II was to reinstate the overtime rule's original effective date of January 1, 2015. Id. at 705, 713–14.

Three summary judgment rulings by the district court are at issue in this appeal: The court granted summary judgment to the County on the ground that the County does not employ IHSS providers for purposes of the FLSA, granted partial summary judgment to the County on the issue of willfulness, and denied partial summary judgment to Ray on the issue of liquidated damages. We unanimously hold that the County is a joint employer of IHSS providers under the FLSA, and we reverse the district court's ruling to the contrary. In this per curiam opinion, Judges Rawlinson and Kennelly also affirm the district court's rulings on willfulness and liquidated damages. Judge Berzon dissents with regard to those rulings.

I.

A.

California's IHSS program "serves hundreds of thousands of recipients."

Ray I , 935 F.3d at 705. Providers help qualified individuals in their homes with "daily activities like housework, meal preparation, and personal care." Id. "California implements the program through regulations promulgated by the California Department of Social Services (CDSS), and the program is administered in part by California counties." Id. The federal government, the State, and the counties all contribute funding to the program.

"In the County of Los Angeles alone there are about 170,000 homecare providers and more than 200,000 recipients." Id. County residents seeking IHSS services apply through the County. County social workers review applications and conduct in-home visits to assess recipients' needs. Social workers determine the services recipients are entitled to receive, the time allotted for each service, and the total number of hours a provider may work for the recipient each month.

"Recipients ... retain the right to hire, fire, and supervise the work of any in-home supportive services personnel providing services for them." Cal. Welf. & Inst. Code § 12301.6(c)(2)(B). Prospective providers must attend an in-person orientation in a County field office, where they view state-provided training materials and sign state-issued forms. Cal. Welf. & Inst. Code § 12301.24.

The County has established a public authority, the Personal Assistance Services Council, that serves as providers' employer of record for collective bargaining purposes. The Personal Assistance Services Council maintains a registry of providers, coordinates provider background checks, and provides training for providers and recipients.

Recipients are responsible for setting their provider's work schedule. See id. § 12300.4(d)(1)(A). Recipients also review and approve their provider's timesheets. Providers submit their timesheets directly to the State, which issues their paychecks.²

B.

As mentioned, DOL issued a new rule in 2013 entitling IHSS providers to overtime pay under the FLSA. 78 Fed. Reg. 60,454. "Before the Weil I decision, California (through the CDSS) began taking steps to meet the January 1, 2015, implementation date, including modifying its systems to process and calculate overtime compensation." Ray I , 935 F.3d at 707 (internal quotation marks omitted). The County participated in state-organized meetings and trainings on the new overtime rule beginning in 2014.

After Weil I vacated the new rule, "the CDSS decided that it would not implement overtime payments ‘until further notice.’ " Id. Once Weil II upheld the rule, DOL announced that it would "not bring enforcement actions against any employer for violations of FLSA obligations resulting from the amended domestic service regulations for 30 days after the date the mandate [in Weil II ] issues," 80 Fed. Reg. 55,029, 55,029 (Sept. 14, 2015), which occurred on October 13, 2015. DOL later confirmed that it would not begin enforcing the rule until November 12, 2015, and also stated that through December 31, 2015, it would "exercise prosecutorial discretion in determining whether to bring enforcement actions, with particular consideration given to the extent to which States and other entities have made good faith efforts to bring their home care programs into compliance with the FLSA." 80 Fed. Reg. 65,646, 65,646 (Oct. 27, 2015).

On December 1, 2015, the State notified all counties that it would begin implementing the rule on February 1, 2016. The County supported the State's implementation plan by training County staff on the new overtime requirements, conducting information sessions for providers and recipients, and developing informational materials. California began paying overtime wages to providers on February 1, 2016.

Ray filed suit in June 2017, seeking relief for unpaid overtime wages between January 1, 2015, and February 1, 2016. After we decided Ray I , the district court conditionally certified a putative collective consisting of IHSS providers in Los Angeles County who worked overtime between January 1, 2015, and January 31, 2016. More than 10,000 providers opted in as plaintiffs.

The parties filed several motions for partial summary judgment. First, Ray sought partial summary judgment on the issue of whether the County was liable for liquidated damages for the time period after October 13, 2015—the date that Weil II mandated. The district court denied the motion, ruling that there was a "factual dispute as to whether the County [was] Plaintiffs' employer," and that the County had "presented evidence of its efforts to comply with the FLSA, sufficient to avoid summary judgment as to its good faith defense to liquidated damages at this stage."

Second, the County asked the district court to find that the statute of limitations for Ray's FLSA claims was two years, rather than three years for "willful" violations. The district court granted partial summary judgment to the County on this issue, ruling that "the County's inability to implement overtime payment to IHSS providers demonstrates as a matter of law that the County's alleged violation of the FLSA was not ‘willful,’ " and that "the undisputed facts in the record show that the County did not act with knowing or reckless disregard of whether its conduct was prohibited by the FLSA."

Finally, both sides moved for partial summary judgment on the issue of whether the County was an employer of IHSS providers. Only an employer covered by the statute can be liable under the FLSA for failing to pay overtime compensation. After weighing several factors, the district court held that "as a matter of law ... the ‘economic reality’ is that the County is not an employer of IHSS providers." The court therefore granted summary judgment in favor of the County.

Ray timely appealed all three orders. Because the district court's determination that the County does not employ IHSS providers could be dispositive of the entire action, we address the last order first.

II.

The district court erred in granting summary judgment to the County on the ground that the County does not employ IHSS providers.

"The FLSA broadly defines the ‘employer-employee relationship[s]’ subject to its reach." Torres-Lopez v. May , 111 F.3d 633, 638 (9th Cir. 1997) (alteration in original) (citation omitted). " ‘Employ’ includes to suffer or permit to work." 29 U.S.C. § 203(g). " ‘Employer’ includes any person acting directly or indirectly in the...