|
|
|
 |
www.dol.gov/sol
|
 |
 |
 |
| November 5, 2008 DOL Home > SOL |  |
|
Buckner Amicus Brief No.
06-11032-EE IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT _______________________________________________________
TAMMY BUCKNER,
v.
FLORIDA HABILITATION NETWORK, INC.,
___________________________________________ On Appeal from the United States District Court for the Middle District of Florida, Fort Myers Division _______________________________________________________ IN SUPPORT OF DEFENDANT-APPELLANT
HOWARD M. RADZELY Solicitor of Labor
GREGORY F. JACOB Deputy Solicitor of Labor
STEVEN J. MANDEL Associate Solicitor
PAUL L. FRIEDEN Counsel for Appellate Litigation
JOANNA HULL Attorney
U.S. Department of Labor Office of the Solicitor 200 Constitution Ave., N.W. Suite N-2716 Washington, D.C. 20210
(202) 693-5555 CERTIFICATE OF INTERESTED PERSONS AND CORPORATE DISCLOSURE STATEMENT Pursuant to Eleventh Circuit Rules 26.1-1 through 26.1-3, I hereby certify that the following is a complete list of all persons and entities currently known to the Secretary of Labor that have an interest in the outcome of this appeal: 1. Buckner, Tammy 2. Celler, Richard B., Esq. 3. Celler Legal Group 4. Chao, Elaine L., Secretary of Labor 5. Elder Care Option, Inc. 6. Fernandez, Ricardo 7. Florida Habilitation Network, Inc. 8. Fowler White Boggs Banker, P.A. 9. Frazier, Douglas N., U.S. Magistrate Judge 10. Frieden, Paul L., Esq. 11. Hull, Joanna, Esq. 12. Mandel, Steven J., Esq. 13. McAuliffe, Michael F., Esq. 14. McDowell, Lawrence S., Esq. 15. Morgan & Morgan 16. Neil Rose, P.A. 17. Radzely, Howard M., Solicitor of Labor 18. Rose, Neil, Esq. 19. Rosenberg, Robin L., Esq. 20. Rosenberg & McAuliffe, PL 21. Sandridge, Hala A., Esq. 22. Silva, Carlos 23. Steele, John E., U.S. District Judge for the Middle District of Florida 24. Wheeler, Denise L., Esq.
________________________________ Joanna Hull Attorney CERTIFICATE OF INTERESTED PERSONS AND CORPORATE DISCLOSURE STATEMENT INTEREST OF THE SECRETARY OF LABOR
A. Nature of the Case, Course of Proceedings, and Disposition
Below
B. Statement of Facts C. The District Court's Decision SECTION 552.109(a) OF THE DEPARTMENT'S REGULATIONS, WHICH EXEMPTS COMPANIONSHIP SERVICES EMPLOYEES EMPLOYED BY THIRD PARTIES FROM THE FLSA'S MINIMUM WAGE AND OVERTIME REQUIREMENTS, IS ENTITLED TO CONTROLLING CHEVRON DEFERENCE BECAUSE IT IS A LEGISLATIVE RULE THAT PERMISSIBLY INTERPRETS THE FLSA'S "COMPANIONSHIP SERVICES" EXEMPTION AT SECTION 13(a)(15)
A. Statutory and Regulatory Provisions
B. The Department's Regulation at 29 C.F.R. 552.109(a) Qualifies for Chevron Deference C. Section 552.109(a) is a Permissible Construction of the FLSA's Companionship Services Exemption TABLE OF AUTHORITIES Cases: Acs v. Detroit Edison Co., No. 05-1042, 2006 WL 954180 (6th Cir. Apr. 14, 2006)
APWU v. Potter, 343 F.3d 619 (2d Cir. 2003)
*Auer v. Robbins, 519 U.S. 452, 117 S. Ct. 905 (1997)
Belt v. EmCare, Inc., No. 05-40370, 2006 WL 758277 (5th Cir. Mar. 24, 2006)
Bonner v. City of Prichard, Ala., 661 F.2d 1206 (11th Cir. Nov. 3, 1981)
Brown Express, Inc. v. United States, 607 F.2d 695 (5th Cir. 1979)
Buckner v. Florida Habilitation Network, Inc., No.2:05-cv-422-FtM-29DNF (M.D. Fla. Jan. 10, 2006)
Cadet v. Bulger, 377 F.3d 1173 (11th Cir. 2004)
Chamber of Commerce v. Occupational Safety & Health Admin., 636 F.2d 464 (D.C. Cir. 1980)
*Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 104 S. Ct. 2778 (1984)
Chrysler Corp. v. Brown, 441 U.S. 281, 99 S. Ct. 1705 (1979)
Coke v. Long Island Care at Home, Ltd., 376 F.3d 118 (2d Cir. 2004), vacated and remanded by 126 S. Ct. 1189 (Jan. 23, 2006)
Commodity Futures Trading Comm'n v. Schor, 478 U.S. 833, 106 S. Ct. 3245 (1986)
Fernandez v. Elder Care Option, Inc., Case No. 03-21998 (S.D. Fla. July 29, 2005), appeal docketed, No. 05-16806 (11th Cir. Dec. 5, 2005)
Florida Habilitation Network v. Buckner, No. 06-90003-I (11th Cir. Feb. 10, 2006)
Heimmermann v. First Union Mortgage Corp., 305 F.3d 1257 (11th Cir. 2002)
Jay v. Boyd, 351 U.S. 345, 76 S. Ct. 919 (1956)
Johnston v. Volunteers of Am., Inc., 213 F.3d 559 (10th Cir. 2000)
Lott v. Rigby, 746 F. Supp. 1084 (N.D. Ga. 1990)
Madison v. Res. for Human Dev., Inc., 233 F.3d 175 (3d Cir. 2000)
Nat'l Cable & Telecomms. Ass'n v. Brand X Internet Servs., 125 S. Ct. 2688 (2005)
McCune v. Oregon Senior Servs. Div., 894 F.2d 1107 (9th Cir. 1990)
Penzoil Co. v. Fed. Energy Regulatory Comm'n, 645 F.2d 360 (5th Cir. Aug. 21, 1981)
Shotz v. City of Plantation, Fla., 344 F.3d 1161 (11th Cir. 2003)
Skidmore v. Swift & Co., 323 U.S. 134, 65 S. Ct. 161 (1944)
Terwilliger v. Home of Hope, Inc., 21 F. Supp. 2d 1294 (N.D. Okla. 1998)
United States v. Gonzales, 520 U.S. 1, 117 S. Ct. 1032 (1997)
*United States v. Mead Corp., 533 U.S. 218, 121 S. Ct. 2164 (2001)
Welding v. Bios Corp., 353 F.3d 1214 (10th Cir. 2004) Statutes and Regulations: 28 U.S.C. 1292(b) Administrative Procedure Act, 5 U.S.C. 551 et seq. 5 U.S.C. 553(b)(3) Fair Labor Standards Act of 1938, 29 U.S.C. 201 et seq. 29 U.S.C. 203(s) (1970) 29 U.S.C. 204 29 U.S.C. 207(a)(1) 29 U.S.C. 207(l) 29 U.S.C. 213(a)(1) *29 U.S.C. 213(a)(15) 29 U.S.C. 216 29 U.S.C. 217 Fair Labor Standards Amendments of 1974, Pub. L. No. 93-259, §29(b), 88 Stat. 55 (1974) Social Security Act, 42 U.S.C. 401 et seq. Code of Federal Regulations 20 C.F.R. 404.1057 26 C.F.R. 31.3121(a)(7)-1(a)(2) 29 C.F.R. 541.118(a) (2003) 29 C.F.R. Part 552 29 C.F.R. 552.3 29 C.F.R. 552.6 29 C.F.R. 552.101 29 C.F.R. 552.101(a) 29 C.F.R. 552.106 29 C.F.R. 552.109 *29 C.F.R. 552.109(a) Miscellaneous: Federal Rules of Appellate Procedure Rule 29 Federal Register: 39 Fed. Reg. 35,382 (Oct. 1, 1974) *Department of Labor, Wage and Hour Advisory Memorandum No. 2005-1, Application of Section 13(a)(15) to Third Party Employers (Dec. 1, 2005) 119 Cong. Rec. 24,794 (1973) H.R. Conf. Rep. No. 93-413 (1973) H.R. Rep. No. 93-913 (1974), reprinted in 1974 U.S.C.C.A.N. 2811, 2845 S. Rep. No. 93-300 (1973) S. Rep. No. 93-690 (1974) No. 06-11032-EE IN THE UNITED STATES COURT OF APPEALS TAMMY BUCKNER, Plaintiff-Appellee, v. FLORIDA HABILITATION NETWORK, INC., Defendant-Appellant. _______________________________________________________ On Appeal from the United States District Court for the Middle District of Florida, Fort Myers Division _______________________________________________________ IN SUPPORT OF DEFENDANT-APPELLANT INTEREST OF THE SECRETARY OF LABOR Pursuant to Federal Rule of Appellate Procedure 29, the Secretary of Labor ("Secretary") submits this Brief as amicus curiae in support of Defendant-Appellant. The Secretary supports Defendant-Appellant's argument that the Department of Labor's ("Department") regulation at 29 C.F.R. 552.109(a), which exempts companionship services employees employed by third parties from the Fair Labor Standards Act's ("FLSA" or "Act") minimum wage and overtime requirements, is entitled to controlling deference under Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 104 S. Ct. 2778 (1984), because it is a legislative rule that permissibly interprets the Act's companionship services exemption at section 13(a)(15), 29 U.S.C. 213(a)(15). The Secretary has a substantial interest in defending the regulation at issue because she administers and enforces the FLSA. See 29 U.S.C. 204, 216, 217. The Department promulgated this regulation pursuant to the Secretary's expressly delegated authority to "define[] and delimit[] by regulation[]" the terms in section 13(a)(15), which exempts companionship services employees from the FLSA's minimum wage and overtime requirements. See 29 U.S.C. 213(a)(15). The Department authoritatively interpreted this regulation in Wage and Hour Advisory Memorandum No. 2005-1, Application of Section 13(a)(15) to Third Party Employers (Dec. 1, 2005).[1] Whether the Department's regulation at 29 C.F.R. 552.109(a), which exempts companionship services employees employed by third party employers from the FLSA's minimum wage and overtime requirements, is entitled to controlling Chevron deference because it is a legislative rule that permissibly interprets the Act's companionship services exemption at section 13(a)(15). A. Nature of the Case, Course of Proceedings, and Disposition Below Plaintiff Tammy Buckner ("Buckner") alleges that she and other similarly situated individuals were not paid overtime compensation as required by the FLSA. Buckner v. Florida Habilitation Network, Inc., No. 2:05-cv-422-FtM-29DNF, slip op. at 2 (M.D. Fla. Jan. 10, 2006). Buckner's employer, Florida Habilitation Network, Inc. ("FHN"), argues that these employees are exempt from the FLSA's overtime requirements under the Act's "companionship services" exemption, 29 U.S.C. 213(a)(15). Id. FHN moved for judgment on the pleadings, which the parties agreed to convert to a motion for summary judgment. Id. at 1. FHN also moved, in the alternative, to certify a controlling question of law. Id. at 1-2. The district court denied FHN's Motion for Judgment on the Pleadings. Buckner, No. 2:05-cv-422-FtM-29DNF, slip op. at 12. The court concluded that the FLSA's companionship services exemption "does not include employees such as plaintiff, who are or were employed by third parties and performed companionship services in the homes of someone other than the employer." Id. at 7. Pursuant to FHN's alternative Motion to Certify Controlling Question of Law, the district court certified, under 28 U.S.C. 1292(b), two questions for review: (1) "What level of deference is due to 29 C.F.R. § 552.3 and 29 C.F.R. § 552.109(a)?"; and (2) "Is a domestic service employee who is employed by a third party employer rather than directly by the family of the person receiving care . . . exempt from the overtime requirements of the FLSA pursuant to the companion services exemption?" Id. at 12. This Court granted FHN's Petition for Permission to Appeal under 28 U.S.C. 1292(b) on February 10, 2006. See Florida Habilitation Network v. Buckner, No. 06-90003-I (11th Cir. Feb. 10, 2006). B. Statement of Facts FHN is a Florida corporation that employs caregivers to provide services in customers' homes, and is an enterprise covered by the FLSA. Buckner, No. 2:05-cv-422-FtM-29DNF, slip op. at 2. Buckner and other similarly-situated individuals worked for FHN, providing caregiver services to mentally disabled patients outside of FHN's premises. Id. at 2-3. FHN paid these employees on an hourly basis for their services. Id. at 3. Buckner and the other caregivers regularly worked in excess of 40 hours per work week, but were paid "straight time" for all hours worked in excess of 40 hours in a work week. Id. C. The District Court's Decision The parties agree that Buckner and the other caregivers were employees of FHN and not of the persons receiving their services, and that they performed "companionship services" for qualified individuals. Buckner, No. 2:05-cv-422-FtM-29DNF, slip op. at 4. Thus, the only issue presented to the district court was whether these employees were employed in "domestic service employment" and therefore exempt from the Act's overtime requirements pursuant to section 13(a)(15). Id.at 5. The court noted that the meaning of "domestic service employment" is not found in the Act, but accorded controlling deference to the Secretary's regulation at 29 C.F.R. 552.3 defining the term. Buckner, No. 2:05-cv-422-FtM-29DNF, slip op. at 5-6. The court concluded that this regulation "clearly requires that the services be performed by an employee of the person who receives the services, and not by an employee of a third party." Id. at 6. Thus, the district court determined that Buckner was not included within the term "domestic service employment" because she was "employed by [a] third part[y] and performed companionship services in the homes of someone other than the employer." Id. at 7. The district court discounted the Department's regulation at 29 C.F.R. 552.109(a), which applies the companionship services exemption to employees employed by third parties, because it determined that this regulation was an "interpretive regulation" entitled to little weight. Buckner, No. 2:05-cv-422-FtM-29DNF, slip op. at 7, 10-11. In making this determination, the court relied on the Second Circuit's decision in Coke v. Long Island Care at Home, Ltd., 376 F.3d 118 (2d Cir. 2004), vacated and remanded by 126 S. Ct. 1189 (Jan. 23, 2006), which held that 29 C.F.R. 552.109(a) is not entitled to Chevron deference because the Department "did not intend to use the legislative power delegated in § 213(a)(15) when it promulgated § 552.109(a)." 376 F.3d at 131.[2] The district court, like the Second Circuit in Coke, applied the less deferential standard of Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S. Ct. 161, 164 (1944), and concluded that "§ 552.109(a) is entitled to little weight and does not control to the extent that it is inconsistent with § 552.3." Buckner, No. 2:05-cv-422-FtM-29DNF, slip op. at 11. The Department's regulation at 29 C.F.R. 552.109(a), which exempts companionship services employees employed by third parties from the Act's minimum wage and overtime requirements, qualifies for Chevron deference because it was promulgated pursuant to an express congressional delegation of authority and after notice and comment. See United States v. Mead Corp., 533 U.S. 218, 226-27, 229-30, 121 S. Ct. 2164, 2171, 2172-73 (2001); Auer v. Robbins, 519 U.S. 452, 457-58, 117 S. Ct. 905, 909-10 (1997). The district court's conclusion to the contrary, based on the Second Circuit's decision in Coke, is erroneous. The Supreme Court has vacated the Second Circuit's decision in Coke and remanded the case for further consideration in light of the Department's Wage and Hour Advisory Memorandum No. 2005-1. See 126 S. Ct. 1189. The Advisory Memorandum, in turn, states that the Department has always considered 29 C.F.R. 552.109(a) to be an "authoritative and legally binding" legislative rule. See Dep't of Labor Wage and Hour Advisory Memorandum No. 2005-1, at 7 (Dec. 1, 2005). Because this regulation satisfies the prerequisites for Chevron deference -- it was promulgated pursuant to Congress's express delegation of rulemaking authority and after notice and comment -- it must be upheld unless it is arbitrary, capricious, or manifestly contrary to the statute. See Shotz v. City of Plantation, Fla., 344 F.3d 1161, 1179 (11th Cir. 2003). Section 552.109(a) clearly passes this test; it is a reasonable interpretation of the statutory exemption. The exemption in section 13(a)(15) applies to "any employee employed in domestic service employment to provide companionship services." 29 U.S.C. 213(a)(15). This language is naturally read to exempt any employee who provides companionship services to an aged or infirm individual in a private home. The statute does not draw any distinction between companions who are employed by the owners of the homes in which they are working and companions who are instead employed by third party employers. Furthermore, Congress enacted section 13(a)(15) to ensure that working people would be able to afford companion services, a rationale that applies equally to all companions, irrespective of the identity of their employer. Further, the Department's statement that third party employment is addressed only in section 552.109(a), and not in section 552.3,[3] see Wage and Hour Advisory Memorandum No. 2005-1, at 7, is entitled to controlling deference because it is the agency's interpretation of its own regulations. See Auer, 519 U.S. at 461, 117 S. Ct. at 911. Thus, there is no conflict between sections 552.3 (addressing the kind of work that qualifies as domestic service and where it must be performed) and 552.109(a) (specifically addressing third party employment). In sum, the district court should have accorded Chevron deference to section 552.109(a) because it reasonably interprets the FLSA's companionship services exemption as applying to employees employed by third parties. SECTION 552.109(a) OF THE DEPARTMENT'S REGULATIONS, WHICH EXEMPTS COMPANIONSHIP SERVICES EMPLOYEES EMPLOYED BY THIRD PARTIES FROM THE FLSA'S MINIMUM WAGE AND OVERTIME REQUIREMENTS, IS ENTITLED TO CONTROLLING CHEVRON DEFERENCE BECAUSE IT IS A LEGISLATIVE RULE THAT PERMISSIBLY INTERPRETS THE FLSA'S "COMPANIONSHIP SERVICES" EXEMPTION AT SECTION 13(a)(15) A. Statutory and Regulatory Provisions The FLSA generally requires covered employers to pay overtime compensation at a rate of one and one-half times an employee's regular rate of pay for hours of work exceeding 40 hours in a work week. See 29 U.S.C. 207(a)(1). This requirement applies to employees employed in domestic service in a household. See 29 U.S.C. 207(l). However, section 13(a)(15) of the FLSA exempts from coverage "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 Secretary promulgated regulations, contained in 29 C.F.R. Part 552, pursuant to her expressly delegated authority to "define[] and delimit[]" the terms in section 13(a)(15)'s companionship services exemption. 29 U.S.C. 213(a)(15). These regulations define "companionship services" as "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." 29 C.F.R. 552.6. The regulations also specifically state that section 13(a)(15)'s "companionship services" exemption applies to employees employed by third-parties: Employees who are engaged in providing companionship services, as defined in § 552.6, and who are employed by an employer or agency other than the family or household using their services, are exempt from the Act's minimum wage and overtime pay requirements by virtue of section 13(a)(15). 29 C.F.R. 552.109(a).[4] A separate regulation states that "domestic service employment," as used in section 13(a)(15) of the Act, "refers to 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." 29 C.F.R. 552.3. B. The Department's Regulation at 29 C.F.R. 552.109(a) Qualifies for Chevron Deference. 1. Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 104 S. Ct. 2778 (1984), establishes that a reviewing court must defer to an implementing agency's reasonable interpretation of an ambiguous statute under certain conditions. See, e.g., Nat'l Cable & Telecomms. Ass'n v. Brand X Internet Servs., 125 S. Ct. 2688, 2699 (2005). The Chevron framework applies where: (1) Congress expressly delegated authority to the agency to make rules carrying the force of law; and (2) the agency promulgated such rules pursuant to that authority. See United States v. Mead Corp., 533 U.S. 218, 226-27, 121 S. Ct. 2164, 2171 (2001); Shotz v. City of Plantation, Fla., 344 F.3d 1161, 1178 (11th Cir. 2003). "[A] very good indicator of delegation meriting Chevron treatment [can be found] in express congressional authorizations to engage in the process of rulemaking . . . that produces the regulations . . . for which deference is claimed." Mead, 533 U.S. at 229, 121 S. Ct. at 2172. Thus, regulations promulgated pursuant to express congressional authorization and after notice and comment qualify for Chevron deference and must be upheld if reasonable. Id. The Department's regulation at 29 C.F.R. 552.109(a) satisfies these criteria for Chevron deference.[5] Congress expressly delegated to the Secretary the authority to "define[] and delimit[] by regulation" the terms of section 13(a)(15)'s "companionship services" exemption. 29 U.S.C. 213(a)(15). The Supreme Court has held that regulations issued pursuant to such authority are entitled to Chevron deference. In Auer, 519 U.S. at 456-58, 117 S. Ct. at 909-10, for example, the Supreme Court accorded Chevron deference to regulations promulgated under the Secretary's authority to "define[] and delimit[]" the FLSA's exemption in 29 U.S.C. 213(a)(1) for employees employed in an executive, administrative, or professional capacity. More generally, Congress delegated to the Secretary the authority "to prescribe necessary rules, regulations, and orders" regarding the 1974 amendments to the Fair Labor Standards Act, which extended the statute's coverage to domestic service workers and included the companionship services exemption. Fair Labor Standards Amendments of 1974, Pub. L. No. 93-259, § 29(b), 88 Stat. 55, 76 (1974). That provision also gives the Secretary authority to promulgate binding legal rules. See, e.g., Brand X, 125 S. Ct. at 2699; Shotz, 344 F.3d at 1179 n.25. The Department expressly stated that it was exercising its legislative rulemaking authority under section 13(a)(15) and the 1974 amendments when it promulgated section 552.109(a). See 29 C.F.R. Part 552 (citing section 13(a)(15) and section 29(b) of the 1974 FLSA amendments as authority for all the regulations in Part 552, including section 552.109(a)); 39 Fed. Reg. 35,382 (Oct. 1, 1974) (proposing regulations pursuant to this authority). Section 552.109(a) also satisfies the second criterion for Chevron deference because the Secretary promulgated this regulation after notice and comment. See 39 Fed. Reg. at 35,382 (proposed rule); 40 Fed. Reg. 7404 (Feb. 20, 1975) (final rule). Such rules are clearly entitled to controlling deference from courts. See Mead, 533 U.S. at 229-31, 121 S. Ct. at 2172-73; Chevron, 467 U.S. at 858-59, 865-66, 104 S. Ct. at 2789-90, 2792-93.[6] Moreover, the Department recently clarified that it has always considered, and continues to treat, 29 C.F.R. 552.109(a) as an "authoritative and legally binding" legislative rule. Dep't of Labor Wage and Hour Advisory Memorandum No. 2005-1, at 7 (Dec. 1, 2005). Specifically, the Advisory Memorandum states that "at the time the final rule [enacting 29 C.F.R. 552.109(a)] was promulgated, the Department believed that the availability of the companionship exemption to third party employers turned decisively on its pronouncement in the regulations -- something that could be true only of a legislative rule." Id. Thus, the district court's conclusion that section 552.109(a) "is not a formal regulation promulgated pursuant to express Congressional authority" is clearly in error. Buckner, No. 2:05-cv-422-FtM-29DNF, slip op. at 9. 2. The district court reasoned that section 552.109(a) is an interpretive rule entitled only to Skidmore deference because it is contained in Part 552's "Interpretations" subpart. As an initial matter, the district court relied on the Second Circuit's decision in Coke, which has been vacated and remanded by the Supreme Court for further consideration in light of the Department's Advisory Memorandum, which clearly states that the Department intended for section 552.109(a) to be a legally binding legislative rule. Moreover, an agency's label for a rule is not dispositive. Chamber of Commerce v. Occupational Safety & Health Admin., 636 F.2d 464, 468 (D.C. Cir. 1980) ("The administrative agency's own label is indicative but not dispositive; we do not classify a rule as interpretive just because the agency says it is."); Brown Express, Inc. v. United States, 607 F.2d 695, 700 (5th Cir. 1979) (agency's label is not conclusive). Indeed, the Supreme Court has under similar circumstances accorded Chevron deference to another Department FLSA regulation that was issued pursuant to notice-and-comment rulemaking, despite the fact that it was set out in an "Interpretations" subpart. See Auer, 519 U.S. at 457-58, 117 S. Ct. at 909 (deference to 29 C.F.R. 541.118(a) (2003)).[7] The Third and Ninth Circuits similarly have accorded Chevron deference to a regulation contained in Part 552's "Interpretations" subpart. See Madison, 233 F.3d at 181 (according Chevron deference to 29 C.F.R. 552.101 because, like section 552.3, it is a formal regulation resulting from notice and comment rulemaking); McCune v. Oregon Senior Servs. Div., 894 F.2d 1107, 1110 (9th Cir. 1990) (upholding 29 C.F.R. 552.106 because it is a reasonable interpretation of a statute the Secretary is charged with administering). Thus, the mere fact that section 552.109(a) is contained in a subpart entitled "Interpretations" does not change the level of deference that should be accorded to it as a legislative rule. Indeed, a far more relevant consideration, in addition to the source of the agency's authority and the procedure used to issue the rule, is whether the regulation is "one affecting individual rights and obligations." Chrysler Corp. v. Brown, 441 U.S. 281, 302, 99 S. Ct. 1705, 1718 (1979) (internal quotation marks omitted). Section 552.109(a) unquestionably falls into this category. 3. Every other court that has considered this issue, with the exception of the Second Circuit's vacated decision in Coke, has applied Chevron deference to 29 C.F.R. 552.109(a) and concluded that the companionship services exemption applies to domestic service employees employed by third party employers. See, e.g., Johnston v. Volunteers of Am., Inc., 213 F.3d 559, 562 (10th Cir. 2000) (deferring to 29 C.F.R. 552.109(a)); Welding v. Bios Corp., 353 F.3d 1214, 1217 n.3 (10th Cir. 2004) (following Johnston); Terwilliger v. Home of Hope, Inc., 21 F. Supp. 2d 1294, 1299 n.2 (N.D. Okla. 1998) (deferring to section 552.109(a)). And most recently, a district court in this Circuit, after a comprehensive analysis of the issue, concluded that section 552.109(a) should be reviewed under the Chevron standard, and upheld the regulation as a permissible construction of the FLSA's companionship services exemption. See Fernandez v. Elder Care Option, Inc., Case No. 03-21998, slip op. at 35-36, 46 (S.D. Fla. July 29, 2005), appeal docketed, No. 05-16806 (11th Cir. Dec. 5, 2005), stayed pending outcome in Buckner, No. 06-11032 (March 20, 2006).[8] This Court should similarly accord Chevron deference to section 552.109(a). C. Section 552.109(a) is a Permissible Construction of the FLSA's Companionship Services Exemption. 1. The FLSA's companionship services exemption is silent regarding third party employment. See 29 U.S.C. 213(a)(15). "Because Congress has not 'directly spoken to the precise question at issue,' [a reviewing court] must sustain the Secretary's approach so long as it is 'based on a permissible construction of the statute.'" Auer, 519 U.S. at 457, 117 S. Ct. at 909 (quoting Chevron, 467 U.S. at 842-43, 104 S. Ct. at 2781-82); see also Cadet v. Bulger, 377 F.3d 1173, 1185 (11th Cir. 2004) (where statute is silent or ambiguous, court must defer to agency's reasonable interpretation). "That [the court] may prefer a different interpretation is not enough to deny deference to the agency interpretation." Heimmermann v. First Union Mortgage Corp., 305 F.3d 1257, 1263 (11th Cir. 2002). "An agency's interpretation is reasonable and controlling unless it is arbitrary, capricious, or manifestly contrary to the statute.” Cadet, 377 F.3d at 1185 (internal quotation marks omitted); see also Shotz, 344 F.3d at 1179 (rules issued pursuant to express congressional delegation of authority and after notice and comment are "entitled to controlling weight unless they are procedurally flawed, substantively arbitrary and capricious, or plainly contradict the statute"). Section 552.109(a) clearly satisfies this standard. 2. Section 13(a)(15), on its face, does not limit the companionship services exemption to employees employed by the individuals receiving their services. See 29 U.S.C. 213(a)(15). Rather, the exemption applies to "any employee employed in domestic service employment to provide companionship services." Id. Congress's use of the term "any" is naturally read to include all employees providing such services, regardless of who employs them. See, e.g., United States v. Gonzales, 520 U.S. 1, 5, 117 S. Ct. 1032, 1035 (1997) ("Read naturally, the word 'any' has an expansive meaning, that is, one or some indiscriminately of whatever kind. . . . Congress did not add any language limiting the breadth of that word, and so we must read [a statute prohibiting certain convictions to run concurrently with 'any' other term of imprisonment] as referring to all term[s] of imprisonment") (internal quotation marks omitted). The statutory exemption, by its terms, is not limited based on the identity of the employer. Like the plain language of the statute, the legislative history does not suggest that the companionship services exemption is limited to companions employed by the individual receiving care. In fact, in enacting section 13(a)(15), Congress was concerned that working people would not be able to pay for companionship services if they were required to pay FLSA wages. See 119 Cong. Rec. 24,794, 24,797 (1973) (statement of Sen. Dominick, discussing letter from Hilda R. Poppell); id. at 24,798 (statement of Sen. Johnston); id. at 24,801 (statement of Sen. Burdick); see also Welding, 353 F.3d at 1217 ("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.") (quoting Lott v. Rigby, 746 F. Supp. 1084, 1087 (N.D. Ga. 1990)). This affordability concern applies regardless whether the companionship services are provided by the direct hiring of an employee or through the use of an agency. Thus, applying the exemption to employees employed by third parties furthers the congressional purpose behind the Act. Cf. McCune, 894 F.2d at 1110 (rationale that "many private individuals . . . may . . . be forced to forego the option of receiving [companionship] services in their homes if the cost of the services increases" provides a "sound policy reason[] for applying the exemption to companions as defined by the Secretary [in 29 C.F.R. 552.6]"). This is especially true when one considers the changes that have occurred during the approximately 25 years since section 13(a)(15) was enacted. For example, "[t]he number of for-profit agencies [providing such services] . . . increased from approximately 47 in 1975 to 3,129 in 1999." Fernandez, No. 03-21998, slip op. at 15 (citing 66 Fed. Reg. 5481, 5483 (Jan. 19, 2001)). Given the number of agencies now providing these services, "[i]f the companionship services exemption to the FLSA was narrowed to only those employees hired directly by a family member or head of household, then the exemption would encompass only 2% of employees providing companionship services in private homes." Id. at 45-46 (citing 66 Fed. Reg. at 5483). This cannot be what Congress intended when it exempted these employees from the FLSA's minimum wage and overtime requirements.[9] Congress never directly addressed the issue of employer identity during its consideration of the companionship services exemption but, rather, focused on the employee's activities and where those activities are performed. Both the congressional committee reports and the congressional debates on the provision repeatedly emphasize that the key factors in determining whether an employee qualifies for the companionship services exemption are the nature of the employee's activities and the place where the activities are performed. See, e.g., H.R. Rep. No. 93-913, at 33 (1974) ("The bill exempts . . . employees employed in the capacity of companion to an individual who, by reason of older age or infirmity, necessitates a companion.") (emphasis added); 119 Cong. Rec. 24,801 (describing tasks performed by companions) (statements of Sens. Burdick and Williams); S. Rep. No. 93-300, at 22 (1973) ("The domestic service must be performed in a private home which is a fixed place of abode of an individual or family.") (emphasis added); S. Rep. No. 93-690, at 20 (1974) (same). While the legislative history refers to the Social Security Act regulations defining "domestic service" (a term used in 29 U.S.C. 213(a)(15)) and a "generally accepted meaning" of the term that "relates to services of a household nature performed by an employee in or about a private home of the person by whom he or she is employed," S. Rep. No. 93-300, at 22 (emphasis added); see also H.R. Rep. No. 93-913, at 35-36; S. Rep. No. 93-690, at 20; 119 Cong. Rec. at 24,799 (statement of Sen. Williams), these isolated references do not reveal an intent to impose a limitation based on the identity of the employer. As the Department has clearly explained in its Advisory Memorandum No. 2005-1, this language was "not intended to address the issue of third party employment, but rather [is] an extraneous vestige of the language's origin in the Social Security regulations" that is meant to address the kind of work that generally qualifies as domestic service under the FLSA. Wage and Hour Advisory Memorandum No. 2005-1, at 4 (citing social security regulation 20 C.F.R. 404.1057 (describing "[d]omestic service in the employer's home") and social security tax regulation 26 C.F.R. 31.3121(a)(7)-1(a)(2) (describing "[d]omestic service in a private home of the employer")). Thus, there was no clear congressional intent to impose a limitation on the exemption based on the identity of the employer. See Fernandez, No. 03-21998, slip op. at 44-45 ("Most of the statements of the Congressmen focus on the nature of companionship services (e.g., 'elder-sitting' or providing companionship to an elderly person through conversation and shared activities) and the location of such services (ensuring affordable care for the elderly within their own homes), rather than the employer."). In light of section 13(a)(15)'s text, which applies to "any" employee employed in domestic service employment to provide companionship services, and the clear legislative intent to keep companionship services affordable, the Department made a permissible policy choice when it applied the companionship services exemption to third party care providers in 29 C.F.R. 552.109(a). Indeed, the district court in Fernandez reached exactly this conclusion. It determined that section 552.109(a) is a permissible construction of the Act's companionship services exemption because it is consistent with section 13(a)(15)'s language and the legislative intent behind this provision. See Fernandez, No. 03-21998, slip op. at 39-43. Specifically, that court concluded that the Department's regulation promotes Congress's purpose to keep companionship services affordable to those who need them. See id. at 43-46. For these reasons, the Fernandez court upheld section 552.109(a). 3. The district court determined that section 552.109(a) conflicts with the Department's regulation at 29 C.F.R. 552.3, which, according to the court, limits the companionship services exemption to employees employed by the person receiving such services. Contrary to the court's conclusion, however, section 552.3 contains no such "clear" meaning. The language in section 552.3 was borrowed, essentially verbatim, from the Act's legislative history. See Wage and Hour Advisory Memorandum No. 2005-1 at 4-5. In turn, the legislative history, as discussed above, drew on the definition of domestic service found in regulations issued under the Social Security Act, 42 U.S.C. 401 et seq. See supra pp. 21-22. Congress's references to the Social Security regulations were intended to emphasize the nature of the employee's activities and where those activities are performed, not to limit the exemption to certain employers. See supra pp. 21-22; see also Wage and Hour Advisory Memorandum No. 2005-1, at 4 (citing legislative history focusing on requirement that work be performed in a private home to qualify as domestic service employment). When the Department incorporated this language from the legislative history into section 552.3, it intended to incorporate these two limitations, but gave no thought to imposing any others. For example, the Department "signaled its understanding that the sentence [referring to the private home of the employer] should be read as addressing place of performance but as not speaking to third party employment" by inserting "a parenthetical explaining that . . . a private home can either be fixed or temporary," thereby clearly emphasizing the importance of place of performance, rather than the employer's identity. Wage and Hour Advisory Memorandum No. 2005-1 at 5. There is no indication that the Department ever considered the potential impact of section 552.3 on the coverage of third party employees, much less that it actually intended the provision to entirely exclude them. To the contrary, at the time the regulation was promulgated the Department demonstrated its belief that section 552.3 did not resolve the issue of third party employment by including a separate section expressly addressing the subject, section 552.109. See 40 Fed. Reg. at 7407. This would have been entirely unnecessary if the definition of domestic service employment in section 552.3 had already excluded employees of third parties.[10] In sum, all sources indicate that neither Congress nor the Department intended the sentence that was incorporated into section 552.3 to be construed as excluding employees who are employed by third party employers from the definition of domestic service employment. In fact, if section 552.3 were construed as excluding all employees of third party employers from the definition of domestic service employment, it would have the perverse effect of excluding many domestic service workers from FLSA coverage in the first place, despite Congress's express intent "to include within the coverage of the Act all employees whose vocation is domestic service," with the exception only of casual babysitters and companions for the aged and infirm. S. Rep. No. 93-690, at 20 (emphasis added); see also H.R. Conf. Rep. No 93-413, at 27 (1973) (same).[11] Prior to the 1974 amendments that extended the FLSA's protections to domestic service workers, only workers employed by "covered enterprises," which at that time meant businesses with annual gross sales of at least $250,000 that employed at least two employees in interstate commerce, were covered under the Act. See 29 U.S.C. 203(s) (1970). Two categories of domestic workers generally were not covered prior to the amendments: those employed by homeowners because there usually was no basis for individual coverage and those employed by third parties that did not meet the test for enterprise coverage. Congress clearly intended the 1974 amendments generally to cover both these categories of workers, with only a few expressly enumerated exceptions. See S. Rep. No. 93-690, at 20 (expressing Congress's intent to extend coverage to all employees whose vocation is domestic service, subject to enumerated exceptions); H.R. Conf. Rep. No 93-413, at 27 (same). But if section 552.3 is construed as excluding third party employers from the definition of domestic service employment, then those domestic workers who are employed by third party employers that are not covered enterprises would to this very day not be covered by the FLSA. That result is contrary to clear congressional intent, and cannot be correct. See Wage and Hour Advisory Memorandum No. 2005-1, at 5. The Department's reading of its regulations is consistent with well-settled principles of regulatory construction. Courts must read regulations "so as to give effect, if possible, to all of its provisions." Jay v. Boyd, 351 U.S. 345, 360, 76 S. Ct. 919, 928 (1956); see also APWU v. Potter, 343 F.3d 619, 626 (2d Cir. 2003) ("A basic tenet of statutory construction, equally applicable to regulatory construction, is that a text should be construed so that effect is given to all its provisions, so that no part will be inoperative or superfluous, void or insignificant, and so that one section will not destroy another unless the provision is the result of obvious mistake or error.") (internal quotation marks omitted). The Department's interpretation that sections 552.3 and 552.109(a) are complementary, and not contradictory, harmonizes the two provisions and gives effect to each of them.[12] The Department has stated that "[t]he regulations address the issue of third party employment in only one place -- section 552.109(a), which clearly and explicitly provides that companions employed by third parties can qualify for the exemption." Wage and Hour Advisory Memorandum No. 2005-1, at 2. The Department's interpretation of its own regulations in the Advisory Memorandum -- that only section 552.109(a), and not section 552.3, addresses the issue of third party employment -- is entitled to controlling deference. See Auer, 519 U.S. at 461-63, 117 S. Ct. at 911-12 (agency's interpretation of its own regulations entitled to controlling deference); Cadet, 377 F.3d at 1186 (same). Indeed, two recent appellate decisions in FLSA cases reiterate the principle that controlling deference should be accorded to the Department's interpretation of its own ambiguous legislative rules. See Acs v. Detroit Edison Co., No. 05-1042, 2006 WL 954180, at *6 (6th Cir. Apr. 14, 2006) (controlling deference to Wage-Hour Division opinion letter); Belt v. EmCare, Inc., No. 05-40370, 2006 WL 758277, at *9 (5th Cir. Mar. 24, 2006) (controlling deference to Department's interpretation contained in amicus brief, Wage-Hour opinion letter, and Wage-Hour Field Operations Handbook). Thus, this Court should accord controlling Auer deference to the Department's position, as expressed in the Advisory Memorandum and this amicus brief, that there is no conflict between the regulations, and that 29 C.F.R. 552.109(a) alone addresses the question of third party employment.[13] Thus, since section 552.109(a) is entitled to controlling deference, and in the Department's considered view is the only regulation that deals directly with the exempt status of companions employed by third parties, it is dispositive. For the foregoing reasons, this Court should reverse the district court's decision and uphold 29 C.F.R. 552.109(a) as a permissible interpretation of the FLSA's companionship services exemption. Respectfully submitted, HOWARD M. RADZELY Solicitor of Labor
GREGORY F. JACOB Deputy Solicitor of Labor
STEVEN J. MANDEL Associate Solicitor
PAUL L. FRIEDEN Counsel for Appellate Litigation
U.S. Department of Labor Office of the Solicitor 200 Constitution Ave., N.W. Suite N-2716 Washington, D.C. 20210 (202) 693-5555 Pursuant to Federal Rules of Appellate Procedure 29(c)(5) and (d), and 32(a)(7)(C), I certify the following with respect to the foregoing Brief for the Secretary of Labor as Amicus Curiae: 1. This brief complies with the type-volume limitation of Fed. R. App. P. 32(a)(7)(B) because this brief contains 6,723 words, excluding the parts of the brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii). 2. This brief complies with the typeface requirements of Fed. R. App. P. 32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) because this brief has been prepared in a monospaced typeface with 10.5 characters per inch, using Microsoft Office Word 2003, Courier New font, 12 point type. ________________ _____________________________ I hereby certify that on this 28th day of April, 2006, I sent by Federal Express overnight delivery the original and six copies of the foregoing Brief for the Secretary of Labor as Amicus Curiae to the Clerk of the United States Court of Appeals for the Eleventh Circuit, 56 Forsyth Street, N.W., Atlanta, GA 30303. In addition, on this same date I uploaded an electronic version of this brief to this Court's website. I also certify that one copy of this brief has been served on each of the following counsel of record by Federal Express overnight delivery this 28th day of April, 2006: Richard B. Celler Morgan & Morgan 284 S. University Drive Fort Lauderdale, FL 33324
Hala A. Sandridge Fowler White Boggs Banker, P.A. 501 E. Kennedy Blvd., Suite 1700 Tampa, FL 33602-5239
Lawerence S. McDowell Denise L. Wheeler Fowler, White, Boggs, Banker, P.A. 2201 2nd Street, Floor 5 Fort Myers, FL 33901-3086
_____________________________ Joanna Hull Attorney Addendum not available.
Footnotes: [1] A copy of the Department's Advisory Memorandum is included in the addendum to this brief. [2] The Supreme Court vacated the Second Circuit's decision in Coke and remanded for further consideration in light of the Department's Wage and Hour Advisory Memorandum No. 2005-1 (Dec. 1, 2005). The Second Circuit recently ordered supplemental briefing in Coke, requesting the parties to address how the Department's Advisory Memorandum affects the issues presented in that case. Coke, No. 03-7666 (2d Cir. Apr. 7, 2006) (order for supplemental briefing). [3] Section 552.3, incorporating relevant portions of the legislative history, states that "[a]s used in section 13(a)(15) of the Act, the term domestic service employment refers to services of a household nature performed by an employee in or about a private home . . . of the person by whom he or she is employed." 29 C.F.R. 552.3 (emphasis in original). [4] Part 552 is subdivided into Subpart A, entitled "General Regulations," and Subpart B, entitled "Interpretations." 29 C.F.R. 552.3 and 552.6 are in Subpart A, while 29 C.F.R. 552.109 is in Subpart B. The stated authority for all these provisions is section 13(a)(15). [5] The district court's first certified question relates to the appropriate level of deference for both 29 C.F.R. 552.3 and 552.109(a). But every court that has addressed these regulations, including the Second Circuit in Coke, has determined that section 552.3 is entitled to controlling deference. See, e.g., Coke, 376 F.3d at 124 (noting, in dictum, that section 552.3 was "promulgated in clear exercise of the authority delegated by § 213(a)(15)"); Welding v. Bios Corp., 353 F.3d 1214, 1217-18 (10th Cir. 2004) (section 552.3's requirement that work be performed in a private home controls question of whether employer must pay overtime); Madison v. Res. for Human Dev., Inc., 233 F.3d 175, 181 (3d Cir. 2000) (according Chevron deference to 29 C.F.R. 552.3 because it is a formal regulation issued after notice and comment that reasonably interprets FLSA section 13(a)(15)). Thus, there is no dispute about the appropriate level of deference to be accorded section 552.3, and this brief focuses on the level of deference due section 552.109(a). [6] Although Buckner does not appear to have raised the argument, the district court suggested, following the Second Circuit's decision in Coke, that 29 C.F.R. 552.109(a) is procedurally defective under the Administrative Procedure Act ("APA"), 5 U.S.C. 551 et seq., because the originally proposed rule took a position opposite that taken in the final rule. See Buckner, No. 2:05-cv-422-FtM-29DNF, slip op. at 8. This contention is without merit. The Department published the proposed text of the rule, giving notice of the subject matter at issue in the rulemaking, and therefore satisfied the APA's notice requirements. Because the Department had a duty to consider comments it received, and modification of proposed rules in light of such comments is at the very "heart of the rulemaking process," the Department did not violate the APA when it promulgated section 552.109(a). See Penzoil v. Fed. Energy Regulatory Comm'n, 645 F.2d 360, 371-72 (5th Cir. Aug. 21, 1981) ("Simply because a different rule is adopted does not require a new notice and comment procedure if, as required by [APA section] 553(b)(3), the notice of proposed rulemaking includes the terms or substance of the proposed rule or a description of the subjects and issues involved."). Fifth Circuit decisions issued before October 1, 1981 are binding precedent in the Eleventh Circuit. See Bonner v. City of Prichard, Ala., 661 F.2d 1206, 1207 (11th Cir. Nov. 3, 1981). [7] Section 541.118(a) established a salary basis test for determining when an employee was employed in an executive, administrative, or professional capacity and thereby exempt from the FLSA's minimum wage and overtime requirements. The Department has since amended the Part 541 regulations, and the current regulations are no longer divided into "General" and "Interpretations" subparts. See 69 Fed. Reg. 22,122 (Apr. 23, 2004). [8] A copy of the Fernandez decision is included in the addendum to this brief. [9] The rule that FLSA exemptions must be narrowly construed and should be withheld unless a person fits plainly and unmistakably within their terms and spirit is a rule of judicial construction that does not "limit[] . . . the Secretary's power to resolve ambiguities in h[er] own regulations." Auer, 519 U.S. at 462-63, 117 S. Ct. at 912. Indeed, "[a] rule requiring the Secretary to construe h[er] own regulations narrowly would make little sense, since [s]he is free to write the regulations as broadly as [s]he wishes, subject only to the limits imposed by the statute." Id., 519 U.S. at 463, 117 S. Ct. at 912. [10] The Department deliberately chose to include third party employees within the companionship services exemption when it promulgated section 552.109(a) after careful consideration of comments it received during the notice-and-comment process. See Wage and Hour Advisory Memorandum No. 2005-1, at 2-3; n. 5, supra. [11] As the Department explained in its Advisory Memorandum, although section 552.3 states that it defines domestic service employment "[a]s used in section 13(a)(15) of the Act," "the Department in fact intended the provision to supply a general definition of the term as used throughout the Act." Wage and Hour Advisory Memorandum No. 2005-1, at 5 n.1. Thus, section 552.3's definition applies equally to the general coverage of domestic service workers and the companionship services exemption. [12] See also Wage and Hour Advisory Memorandum No. 2005-1, at 6 (Department's interpretation avoids an internal inconsistency with 29 C.F.R. 552.101(a)'s inclusion in domestic service employment of "private household workers," a phrase understood by the Department and Congress to include employees of third party employers). Because section 552.101(a) clearly states that at least some domestic workers employed by third parties are included within the definition of domestic service employees, it makes no sense to construe section 552.3's language that domestic service be performed "in or about a private home . . . of the [employer]" as excluding them. Id. [13] Any ambiguity created by the Department's previous statements in its notices of proposed rulemaking that sections 552.3 and 552.109(a) were inconsistent, see, e.g., 66 Fed. Reg. at 5485, has been resolved by the Department's Advisory Memorandum, which expressly repudiates and withdraws those statements. See Wage and Hour Advisory Memorandum No. 2005-1, at 7. Even if the Department had not expressly withdrawn these statements, this Court should give them little weight because they were expressed in proposing amendments to section 552.109 that were never promulgated. See Commodity Futures Trading Comm'n v. Schor, 478 U.S. 833, 845, 106 S. Ct. 3245, 3253 (1986) ("It goes without saying that a proposed regulation does not represent an agency's considered interpretation of its statute and that an agency is entitled to consider alternative interpretations before settling on the view it considers most sound."); see also Fernandez, No. 03-21998, slip op. at 46 n.27 (finding, based on Chevron, that the proposed changes to section 552.109(a) do not undermine its authority). In addition, the perception that the Department has changed its position regarding whether sections 552.3 and 552.109(a) conflict does not lessen the deference that these regulations receive. See Brand X, 125 S. Ct. at 2699 ("Agency inconsistency [with past practice] is not a basis for declining to analyze the agency's interpretation under the Chevron framework.").
|
|
|||||||
| ||||||||
