Welding v. Bios Corp.

• Decision Date: 06 January 2004
• Docket Number: No. 02-5068.,02-5068.
• Citation: 353 F.3d 1214
• Parties: T. Maria Welding; Mark A. Cooper; Vicki (Morrow) Allsbrooks; Kathleen M. Smith; Andrea J. Williams; Robin Lewis; Annette Cubit; Valerie R. Titsworth; Hazel Ervin; Lashawnda Jones; Erma Morrow; Sheila Powell; Cordell Ricks; Elnita Taylor, Plaintiffs-Appellees, v. Bios Corporation, a corporation, Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

353 F.3d 1214

T. Maria Welding; Mark A. Cooper; Vicki (Morrow) Allsbrooks; Kathleen M. Smith; Andrea J. Williams; Robin Lewis; Annette Cubit; Valerie R. Titsworth; Hazel Ervin; Lashawnda Jones; Erma Morrow; Sheila Powell; Cordell Ricks; Elnita Taylor, Plaintiffs-Appellees, v. Bios Corporation, a corporation, Defendant-Appellant.

No. 02-5068.

United States Court of Appeals, Tenth Circuit.

January 6, 2004.

COPYRIGHT MATERIAL OMITTED

Submitted on the briefs: J. Daniel Morgan and Kristin L. Oliver of Gable & Gotwals, Tulsa, OK, for Defendant-Appellant.

Steven R. Hickman of Frasier, Frasier & Hickman, LLP, Tulsa, OK, for Plaintiffs-Appellees.

Before EBEL, HENRY, and MURPHY, Circuit Judges.

EBEL, Circuit Judge.

An employer is not required to pay overtime to an employee who provides companionship services to the aged or infirm in a private home. The plaintiff employees here provided services to developmentally disabled persons in a variety of living arrangements. In determining whether these living arrangements qualified as private homes, the district court analyzed the various living arrangements as a group rather than one-by-one. We conclude that this was error and, therefore, we reverse the district court's ruling that, as a matter of law, the defendant employer is not entitled to the so-called "companionship services" exemption to the overtime requirement of the Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 201-219.¹

Bios Corporation is in the business of providing services to developmentally disabled individuals in Oklahoma pursuant to contracts with the State. A number of Bios employees brought suit under the FLSA claiming they were entitled to be paid overtime, i.e., time and a-half, for the hours in excess of forty that they worked each week. Bios moved for summary judgment, arguing that the companionship services exemption excused it from paying overtime wages.² See id. § 213(a)(15). The district court analyzed the living arrangements of the employees' clients as a group and concluded that they did not qualify as private homes. Accordingly, the court held that Bios was not entitled to the companionship services exemption as a matter of law. The court therefore denied summary judgment for Bios and effectively granted summary judgment for the employees. In light of this holding, the parties stipulated to the amount of damages, costs, and fees, and the district court entered final judgment for the employees. Bios now appeals.

The Statutory and Regulatory Scheme

The FLSA provides an exemption to its overtime pay requirements for "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 delimited by regulations of the Secretary)." Id. "Congress created the `companionship services' exemption to enable guardians of the elderly and disabled to financially afford to have their wards cared for in their own private homes as opposed to institutionalizing them." Lott v. Rigby, 746 F.Supp. 1084, 1087 (N.D.Ga.1990) (citing Wage and Hour Opinion WH 368, 91 W.H.M. 1031 (Nov. 25, 1975)).

The regulations define "domestic service employment" as "services of a household nature performed by an employee in or about a private home (permanent or temporary) of the person by whom he or she is employed."³ 29 C.F.R. § 552.3.

... The domestic service must be performed in or about the private home of the employer whether that home is a fixed place of abode or a temporary dwelling as in the case of an individual or family traveling on vacation. A separate and distinct dwelling maintained by an individual or a family in an apartment house, condominium or hotel may constitute a private home.

Employees employed in dwelling places which are primarily rooming or boarding houses are not considered domestic service employees. The places where they work are not private homes but commercial or business establishments....

Id. § 552.101(a), (b).

Review Standards

We review the grant or denial of a motion for summary judgment de novo, applying the same legal standard as the district court. Spradling v. City of Tulsa, 198 F.3d 1219, 1221 (10th Cir.2000). Under that standard, summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). When applying this standard, we "constru[e] all facts and reasonable inferences in a light most favorable to the nonmoving party." Pub. Serv. Co. of Colo. v. Cont'l Cas. Co., 26 F.3d 1508, 1513 (10th Cir.1994).

"[S]ummary judgment should be granted where the evidence is such that it would require a directed verdict for the moving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (quotation omitted). The inquiry for summary judgment and a directed verdict are essentially the same: "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Id. at 251-52, 106 S.Ct. 2505. "[T]he inquiry involved in a ruling on a motion for summary judgment or for a directed verdict necessarily implicates the substantive evidentiary standard of proof that would apply at the trial on the merits." Id. at 252, 106 S.Ct. 2505.

As the employer asserting that it is exempt from the FLSA's overtime requirements, Bios "has the burden of establishing the [companionship services] exemption affirmatively and clearly," Schoenhals v. Cockrum, 647 F.2d 1080, 1081 (10th Cir.1981) (quotation omitted). "The [FLSA] constitutes humanitarian and remedial legislation. Exemptions must be narrowly construed and are limited to those establishments plainly and unmistakably within the terms and the spirit of the exemption invoked." Id.

Accordingly, Bios is not entitled to summary judgment unless it can establish that the undisputed facts (or plaintiffs' version of any disputed facts) plainly and unmistakably fit within the companionship services exemption. If there are genuine and material factual disputes such that Bios could meet its burden of proof only if the jury resolved the factual disputes in its favor, then the matter is not appropriate for summary judgment and it should proceed to trial. If, however, the summary judgment record, when construed most favorably to Bios, does not clearly and unmistakably establish the companionship services exemption, then summary judgment may be entered for the appropriate plaintiffs. See Anderson, 477 U.S. at 250-51, 106 S.Ct. 2505.

Analysis

Whether Bios is exempt from paying overtime to any of the plaintiffs here depends on whether any of the residences in which plaintiffs provided services to developmentally disabled individuals should be considered "private homes" as that term is used in the regulations. "[T]he definition of a `private home' exists along a continuum." Bowler v. Deseret Village Ass'n, Inc., 922 P.2d 8, 13 (Utah 1996). At one end of the continuum is "[a] traditional family home in which a single family resides," which clearly constitutes a private home. Id. At the other end of the continuum is "an institution primarily engaged in the care of the sick, the aged, the mentally ill or a boarding house used for business or commercial purposes," which clearly do not constitute private homes. Id. (quotation omitted). In between lie a variety of living arrangements, many of which may constitute "private homes" for purposes of the companionship services exemption.

"[A] determination whether domestic/companionship services are provided in a private home is fact-specific and to be made on a case-by-case basis[;] ... no [single] factor is dispositive." Johnston v. Volunteers of Am., Inc., 213 F.3d 559, 565 (10th Cir.2000) (quotation omitted). The object of this case-by-case evaluation is not the particular provider, such as Bios, or even the particular employee or group of employees, such as plaintiffs. Rather, because the question is whether the services are provided in a private home, the object of evaluation is the living unit of the person receiving the services, i.e., the client. The client's living unit consists of the client's bedroom and the common areas to which the client has access. The court must evaluate each living unit separately to determine where on the continuum it lies.

The district court here found that, due to the differences in the living units of the plaintiffs' clients, analysis of the relevant factors on an individual basis was "unwieldy." Aplt's App., Vol. II, Tab 13 at 603. The court acknowledged that an individualized analysis would show that "some plaintiffs might be entitled to overtime for care of some clients, but some might not be entitled to overtime at all. Further, one plaintiff might be entitled to overtime for care of one client, while he or she might not be entitled to overtime for care of another client." Id. But the court preferred to evaluate the living units as a whole, rather than individually. In this, the district court erred. We, therefore, must reverse and remand the action for further proceedings.

In evaluating where each living unit lies on the continuum, we conclude that the key inquiries are who has ultimate management control of the living unit and whether the living unit is maintained primarily to facilitate the provision of assistive services. To answer these inquiries, a court must look at many factors. Although no single factor is dispositive, some may be more important than others. What some courts have referred to as factors are, in reality, just historical facts that evidence the presence or absence of a factor. As a result, the so-called factors that courts have considered have grown like weeds. We have reviewed the...