Companionship Service Overtime Lawsuit Progresses
September 3, 2014 09:44 AM
The lawsuit challenging the US Department of Labor (DoL) rule that effectively eliminates the application of the overtime pay exemptions for companionship and live-in domestic services is rapidly progressing in federal court in Washington, D.C. The National Association for Home Care & Hospice (NAHC), along with its co-plaintiffs, filed a reply this week to the US Department of Labor’s efforts to dismiss the lawsuit that followed the plaintiff’s Motion for Summary Judgment.
In its filing, the DoL argues that it has the power to reinterpret the Fair Labor Standards Act exemptions - even if those new interpretations are in complete conflict with the nearly 40 year-old standards. Those standards have been consistently applied by the DoL since 1975 - and have been defended intensely at the U.S. Supreme Court by the Department.
The DoL has attempted to convince the court that it is only interpreting an ambiguous law and that its interpretation should be accepted unless it is irrational, arbitrary, or capricious. In that regard, DoL explains that the home care industry has changed greatly since 1975 and that workers are now engaged in caregiving as a vocation, not simply helping family and friends.
NAHC and its co-plaintiffs responded with full force. Amplifying the positions taken in their original brief, NAHC and co-plaintiffs argue that the plain language of the law is very clear: Congress intended the exemptions to apply to “any employee” in the respective positions regardless of the identity of the employer. Further, NAHC argues that the law focuses on employees who provide care to persons with disabilities and infirmities, not on their employers. The consumers of care and the nature of the work by the caregivers have not changed since 1975. Its use has grown significantly since 1975, but the work itself is very much the same. Given that the DoL itself estimates that 98 percent of companionship services workers will be outside of the overtime exemption if the new rule is allowed to stand, NAHC and its co-plaintiffs argue that DoL’s changes are irrational, arbitrary and capricious as Congress’s intended beneficiaries of the original exemption, the vulnerable and needy consumers of care, will be deprived of the intended benefit of affordable care. As such, DoL’s “changes in the industry” explanation does not fit.
In previous litigation on the overtime exemption, DoL took the opposite view, arguing to the US Supreme Court that the exemption needed to apply to any and all employees to honor both the language of the law and the congressionally-expressed purpose behind it. In that case, litigated by NAHC and state home care associations on behalf of the home care agency, the Supreme Court found the more expansive interpretation to be valid. In the present litigation, DoL argues that it has the discretion to reinterpret the law in a manner that is 180 degrees opposite its longstanding position because the Supreme Court indicated that it has “gap-filling” power. NAHC responds that the gap-filling power does not include exclusion of an entire class of employers from use of the exemption unless it explicitly authorizes such in the law. The law provides no such expression.
The next phase of the lawsuit gives DoL another briefing opportunity. Then it goes to the federal judge for oral argument and a decision hopefully before the new rule takes effect on January 1, 2015. If NAHC is successful with this part of the case, litigation will proceed to a second part concerning the definition of “companionship services.” The DoL rule totally changes that definition, essentially limited personal care related work functions to no more than 20 percent in a work week. That limitation also would effectively eliminate the application of the exemption in home care.
For further information about this lawsuit, please contact Bill Dombi, NAHC’s Vice President for Law and co-counsel on the lawsuit.