Dillow v. Home Care Network, Inc.
ORDER DENYING DEFENDANT'S MOTION FOR PARTIAL SUMMARY JUDGMENT (Doc. 15 ). Signed by Judge Timothy S. Black on 2/27/2017. (mr)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
HOME CARE NETWORK, INC.,
Case No. 1:16-cv-612
Judge Timothy S. Black
ORDER DENYING DEFENDANT’S MOTION
FOR PARTIAL SUMMARY JUDGMENT (Doc. 15)
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.
Plaintiff Rhonda Dillow has brought this civil action against Defendant Home
Care Network, Inc., seeking remuneration for unpaid overtime on behalf of the following
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 Court
is 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
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 analysis 1 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 already
In Chevron Oil, a decision predating Harper, the Supreme Court found that prospective application of a law
required: (1) a new principle of law; 2) support for prospective application in the history of the law; and 3) that
retroactive application be inequitable. Chevron Oil v. Huson, 404 U.S. 97 (1971).
been 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,
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 date, even
The Court has examined the briefings submitted by the parties related to the summary judgment granted by the
Bangoy court. The Plaintiff’s response brief was very sparse, citing only to the Weil decision. As a result, the
opinion in Bangoy contained no discussion of several relevant cases, including Harper, which every court to
subsequently rule on this issue has found to be a critical case (an assessment with which this Court agrees).
though the regulations were vacated by the D.C. District Court for much of that year. In
Kinkead v. Humana, a district court in Connecticut considered this very issue and held
that January 1, 2015 was the regulations’ effective date, despite the fact that defendants
had relied upon the D.C. district court opinion that was subsequently reversed. Kinkead at
*3; see also Hawknet, Ltd. v. Overseas Shipping Agencies, 590 F.3d 87, 91 & n. 7 (2d
Cir.2009) (despite fact that “the parties relied on [prior overruled decision] when
structuring their transactions, the Supreme Court has held that a reliance interest is
insufficient to overcome the presumption of retroactivity set forth in Harper”). The
Kinkead court noted that:
The DOL allowed more than a year from its promulgation of the new rule
in 2013 until its effective date in 2015; defendants had ample notice of the
obligations to be imposed by the new rule. Although defendants might have
hoped that the district court's decision would spare them from having to pay
overtime, they were doubtlessly aware of a likelihood that the D.C. Circuit
would do just what appellate courts often do—reverse the decision of a
Kinkead at *3. In Lewis–Ramsey v. The Evangelical Lutheran Good Samaritan Society,
an Iowa district court also held that January 1, 2015 is the regulations’ effective date,
even though the defendants argued it would be unfair to ignore the district court’s vacatur
of the Final Rule and “create liability where none previously existed.” Lewis–Ramsey v.
The Evangelical Lutheran Good Samaritan Soc'y, Case No. 3:16–cv–26–RP–CFB, at 8
(S.D. Iowa September 21, 2016). In rejecting this “unfairness” argument, the Lewis—
Ramsey court stated:
This case presents nothing out of the ordinary when it comes to the
authority of a Court of Appeals to render null and void decisions of the
district court with which it disagrees. Indeed, it strikes the Court as far
more “unfair” to allow Defendant to escape liability for nearly a year’s
worth of overtime wages based on a district court decision that was
ultimately deemed to be error.
Id. Similarly, in Cummings v. Bost, Inc., an Arkansas district court rejected a defendant’s
argument that it would be unfair to use January 1, 2015 as the regulations’ effective date.
Cummings v. Bost, Inc., No. 2:14-CV-02090, 2016 WL 6514103, at *6 (W.D. Ark. Nov.
1, 2016). In Cummings, the court noted that it would be “contrary to general principles of
fairness” to allow the defendant to duck liability for overtime wages based on an
erroneous decision that was reversed. Id. The fairness principle at issue should be
obvious—a party who relies upon the wrong interpretation of the law should not be
rewarded over a party who relies upon the correct interpretation.
The Court notes as an initial matter that Defendant’s assertion that this Court is
foreclosed from ruling in Plaintiff’s favor because “[t]he Bangoy case is controlling” is
incorrect. (Doc. 15, at 7). “A decision of a federal district court judge is not binding
precedent in either a different judicial district, the same judicial district, or even upon the
same judge in a different case.” Camreta v. Greene, 563 U.S. 692, 709 (2011).
Defendant argues that the cases cited by Plaintiff should not persuade this Court
over the Bangoy decision because the cases cited by Plaintiff “failed to adequately
consider the effect of [the] DOL pronouncement” that it would begin enforcement of the
new regulations November 12, 2015. (Doc. 18, at 5). Defendant’s position is that the
DOL’s decision not to enforce the new regulations until November 12, 2015 should
persuade the Court to find that the regulations only apply prospectively from the date of
the D.C. Circuit Court’s mandate in Weil. The Southern District of Ohio court that issued
the Bangoy opinion agreed with this assertion, holding that “[g]ood administration of the
Act and good judicial administration alike require that the standards of public
enforcement and those for determining private rights shall be at variance only where
justified by very good reasons.” Bangoy, 2015 WL 12672727, at *3 (quoting Skidmore v.
Swift & Co., 323 U.S. 134, 139-40 (1944)). However, Plaintiff cites no authority stating
that the DOL’s enforcement decisions are binding on the Court, and the Court is
persuaded by the totality of the circumstances to side with the growing majority of
district courts that have found that the effective date of the regulations at issue is the
effective date for purposes of a private suit. The DOL has more discretion in choosing
when and how to enforce its regulations than a reviewing court does; in this
circumstance, it is clear that the retroactive effect of the D.C. Circuit Court’s decision in
Weil requires this Court to find that the new overtime regulations for companionship
services were in effect as of January 1, 2015.
Defendant’s reply to its motion for summary judgment states that “[r]etroactive
application is inequitable in that it requires Defendant to go back in time to comply with
regulations that had technically not gone into effect.” (Doc. 18, at 4). The Court is
unpersuaded by this argument. It is disingenuous to suggest that Defendant, or any other
similarly situated party, could not anticipate that there was a significant possibility the
D.C. District Court’s decision in Weil would be overturned on appeal. That is a natural
and foreseeable consequence of the appellate process. The Court sees greater inequity in
suggesting that an early victory in court could shield a defendant from any obligation for
the length of the appellate process, even if that victory was based on a flawed
understanding of the law at issue. That holding would in fact create a perverse incentive
for a party that has won such an early victory to drag out the appeals process as long as
possible, perhaps through repeatedly requested extensions or through other means. Even
were a defendant to ultimately lose its appeal, it could save a considerable amount of
money based on how many total hours of overtime it avoided paying through its delay
tactics. The more equitable holding is that any party involved in ongoing litigation
should be prepared to be responsible for the implications of a retroactive ruling not in its
favor at the appellate level.
Accordingly, for the reasons stated above, the Court finds that the effective date of
the regulations at issue in this case is January 1, 2015. Defendant’s motion for summary
judgment (Doc. 15) is therefore DENIED.
IT IS SO ORDERED.
Timothy S. Black
United States District Judge
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