Lee v. Caregivers for Independence, LLC et al
ORDER granting 29 Motion for Leave to File; granting 33 Motion for Leave to File; denying 16 Motion to Certify Class; granting 21 Motion for Judgment on the Pleadings. Signed by Judge Michael R. Barrett on 6/21/17. (ba)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
BOBBI LEE, individually and on
behalf of all others similarly situated
Case No. 1:16cv946
Judge Michael R. Barrett
INDEPENDENCE, LLC, et. al.
OPINION AND ORDER
This matter is before the Court on: Plaintiff’s Motion to Conditionally Certify a FLSA
Collective Action, Approve Notice and Expedited Consideration (Doc. 16) and the responsive
memoranda thereto (Doc. 24); and Defendants’ Motion for Judgment on the Pleadings (Doc. 21),
Plaintiff’s memorandum in opposition (Doc. 23), and Defendants’ reply (Doc. 28). Plaintiff also
filed a Motion for Leave to File Supplemental Authority in Opposition to Defendants’ Motion
for Judgment on the Pleadings (Doc. 29). Defendants responded (Doc. 30), and Plaintiff filed a
Notice of Supplemental Authority (Doc. 32).
Most recently, Plaintiff filed an Unopposed
Motion for Leave to File Supplemental Authority in Opposition to Defendants’ Motion for
Judgment on the Pleadings and in Support of Plaintiff’s Motion for Conditional Certification
(Doc. 33). This matter is now fully briefed and ripe for review.
As an initial matter, the Court GRANTS Plaintiff’s motions for leave to file
supplemental authority (Docs. 29, 33).
Plaintiff Bobbi Lee filed a complaint on behalf of herself and others similarly situated
against Defendants Caregivers for Independence, LLC, James Couch, Phyllis Couch, and James
Couch, II, (“Defendants’) 1 seeking unpaid overtime wages under the Fair Labor Standards Act
(“FLSA”) 29 U.S.C. § 201 et seq., Ohio Minimum Fair Wage Standards O.R.C. § 4111 et. seq.,
and the Ohio Prompt Pay Act O.R.C. § 41135.15. Plaintiff filed this lawsuit as a collective
action under Section 216(b) of the FLSA on behalf of herself and other similarly-situated
workers employed by Defendants who were paid hourly. (Doc. 26).
Plaintiff is a former employee of Caregivers for Independence, LLC (“Caregivers”) – an
entity that provides in-home personal healthcare in Hamilton, Ohio.
Plaintiff worked for
Caregivers from approximately 2010 to September 29, 2015. (Doc. 26 at ¶ 3). Specifically, she
provided companionship services to elderly persons and other persons who, because of illness,
injury, or disability, required assistance for themselves. (Id. at ¶ 1). While Plaintiff’s hours
varied from week to week, it is undisputed that during some work weeks, she worked more than
40 hours. (Docs. 21, 23). As explained more fully herein, Plaintiff brings this action pursuant to
the recent changes in the overtime pay requirements imposed by the FLSA specific to
companionship employees. 29 U.S.C. § 201 et seq.
Generally, the FLSA requires employers to pay their employees time and one-half their
regular rates of pay for any hours worked in excess of 40 each week. In 1974, however,
Congress amended the FLSA to exempt employers from paying domestic service employees
29 U.S.C. § 213(a).
The exemption included “any employee employed in
domestic service employment to provide companionship services for individuals who (because
Defendant James Couch is a manager of Caregivers and is its registered agent. (Doc. 13, PAGEID 543, ¶¶ 4, 8).
Defendant James Couch, II is an owner and manager of Caregivers. (Doc. 13, PAGEID 543, ¶ 6). Defendant
Phyllis Couch is also an owner and manager of Caregivers. (Doc. 13, PAGEID 544, ¶ 16).
of age or infirmity) are unable to care for themselves . . . .” 29 U.S.C. § 213(a)(15). The
following year, the Department of Labor (“DOL”) published regulations which provided
guidance in defining “companionship services” 2 and “third party employment.” 3 29 C.F.R. §
552.6; 29 C.F.R. § 552.109. Thus, under the rules, employers like Caregivers were exempt from
paying employees like Plaintiff overtime.
In October 2013, The DOL issued a Final Rule amending the companionship services
exemption regulations. See Application of the Fair Labor Standards Act to Domestic Service, 78
Fed. Reg. 60454, 60455 (Oct. 1, 2013). The new regulations modernized the definition of
companionship services, and significant to the instant action, removed the exemption applying to
caregivers who were employed by third-party employers. Id. This change effectively precluded
third-party employers, such as Caregivers, from claiming the exemption under the FLSA’s
overtime provisions for companionship service employees.
See 29 C.F.R. § 552.109(a)
(hereinafter referred to as “Regulation”) ("Third party employers of employees engaged in
companionship services within the meaning of § 552.6 may not avail themselves of the minimum
wage and overtime exemption."). In other words, under the Regulation, employees like Plaintiff
are entitled to overtime pay. The DOL chose January 1, 2015 as the effective date of the
Regulation, recognizing the rule would impact a diverse group of interested parties.
Application of the Fair Labor Standards Act to Domestic Service, 78 Fed. Reg. at 60494-95.
Before the Regulation went into effect, the United States District Court for the District of
Columbia issued an order finding the DOL exceeded its rule-making authority in eliminating the
FLSA exemption for home healthcare workers and vacated the Regulation nationwide. Home
The term “companionship services” means “the provision of fellowship and protection for an elderly person or
person with an illness, injury, or disability who requires assistance in caring for himself or herself.” 29 C.F.R. §
The statutory companionship exemption applied to caregivers “employed by an employer or agency other than the
family or household using their services.” 29 C.F.R. § 552.6.
Care Ass’n of Am. v. Weil, 76 F. Supp.3d. 138 (D.D.C. 2014); Home Care Ass’n of Am. v. Weil,
76 F.Supp.3d 123 (D.D.C. 2015). In August 2015, the Court of Appeals for the District of
Columbia reversed the district court’s decision, and found the Regulation valid. Home Care
Ass’n of Am. v. Weil, 799 F.3d 1084 (D.C. Cir. 2015). Subsequently, the DOL issued guidance
stating that it would not institute enforcement proceedings for violations of the Regulation until
30 days after the Court of Appeals issued its mandate. See 80 Fed. Reg. 55029 (Sept. 14, 2015).
The Court issued its mandate on October 13, 2015. The DOL then indicated that it would not
bring enforcement actions for violations of the Regulation 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).
Plaintiff alleges she and other similarly situated employees are entitled to overtime pay
beginning on January 1, 2015 – the initial effective date of the Regulation. She moves for
conditional class certification. In response, Defendants filed a motion for judgment on the
pleadings. The issue before the Court is when the Regulation became enforceable, or put another
way, what the “effective date” of the Regulation is. Because it is dispositive of the case, the
Court addresses Defendants’ motion for judgment on the pleadings first.
A. Motion for Judgment on the Pleadings
A motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c) is
analyzed using the same standards applicable to a motion to dismiss under Federal Rule of Civil
Procedure 12(b)(6). Tucker v. Middleburg-Legacy Place, LLC, 539 F.3d 545, 549 (6th Cir.
2008) (citing Sensations, Inc. v. City of Grand Rapids, 526 F.3d 291, 295 (6th Cir. 2008)). “[T]o
survive a motion to dismiss[,] a complaint must contain (1) ‘enough facts to state a claim to relief
that is plausible,’ (2) more than ‘a formulaic recitation of a cause of action’s elements,’ and (3)
allegations that suggest a ‘right to relief above a speculative level.’” Tackett v. M&G Polymers,
USA, LLC, 561 F.3d 478, 488 (6th Cir. 2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S.
544 (2007)). A claim has facial plausibility when the pleaded factual content allows the court to
draw the reasonable inference that the defendant is liable for the misconduct alleged. Ashcroft v.
Iqbal, 556 U.S. 662, 663 (2009). Although the plausibility standard is not equivalent to a
“‘probability requirement,’ . . . it asks for more than a sheer possibility that a defendant has acted
unlawfully.” Id. at 678 (quoting Twombly, 550 U.S. at 556).
In reviewing a motion to dismiss, the Court must “construe the complaint in the light
most favorable to the plaintiff, accept its allegations as true, and draw all reasonable inferences
in favor of the plaintiff.” Bassett v. Nat’l Collegiate Athletic Ass’n, 528 F.3d 426, 430 (6th Cir.
2008) (quoting Directv, Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007)). Federal Rule of Civil
Procedure 8(a)(2) requires only “a short and plain statement of the claim showing the pleader is
entitled to relief.” “Specific facts are not necessary; the statement need only ‘give the defendant
fair notice of what the . . . claim is and the grounds upon which it rests.’” Sensations, Inc. v. City
of Grand Rapids, 526 F.3d 291, 295 (6th Cir. 2008) (quoting Erickson v. Pardus, 551 U.S. 89, 93
Plaintiff contends the Regulation’s effective date has always been January 1, 2015, the
original intended date of enforcement. (Doc. 23, PageID 445). She argues that judicial decisions
apply retroactively. Thus, following Plaintiff’s reasoning, when the D.C. Circuit reversed the
district court in Weil, the Regulation’s intended effective date was reinstated. Defendants, on the
other hand, contend the earliest the Regulation could have taken effect is October 13, 2015, the
date the D.C. Circuit issued its mandate reversing the district court’s vacatur in Weil. (Doc. 28,
PageID 569). Defendants argue Caregivers complied with a valid nationwide vacatur, and
should be entitled to rely on a federal district court’s decision, even if later overturned on appeal.
The Sixth Circuit has not yet addressed this issue. District courts, including several
courts in this district, however, have decided the issue, and a split has formed. The first court to
decide the issue was Bangoy v. Total Homecare Sols., LLC, No. 1:15-CV-573, 2015 WL
12672727, (S.D. Ohio Dec. 21, 2015) wherein the court found the employer was entitled to rely
on the district court’s vacatur in Weil. The court explained:
[a]ny other conclusion would put . . . employers, in an untenable position.
[Employers] could have complied with the vacated rule at the risk of paying
Plaintiff overtime wages to which [she was] not entitled if the Court of Appeals
affirmed the district court's judgment. Or, [employers] could have done what it
did here, rely on the vacatur of the rule but then, according to [the] Plaintiff, be
liable to [her] for FLSA damages if the Court of Appeals reversed the district
Bangoy, 2015 WL 12672727 at*3.
Other courts in this district have also recognized the effective date of the Regulation to be
a date later than January 1, 2015 despite not analyzing the issue in depth. See Wengerd v. SelfReliance, Inc., No. 3:15-cv-293, 2016 U.S. Dist. LEXIS 136885, at *5 n.2 (S.D. Ohio Oct. 3,
2016); see also Jasper v. Home Health Connection, Inc., No. 2:16-cv-125, 2016 U.S. Dist.
LEXIS 71616, 2016 WL 3102226 (S.D. Ohio June 1, 2016). Although the precise issue in
Wengerd was not the effective date of the Regulation, in discussing the sequence of Weil cases,
the court stated that due to the reversal on appeal, “the effective date was pushed back to
November 12, 2015.” Id.
More recently, courts have found the Regulation’s effective date was after the D.C.
Circuit reversed the district court. See Sanchez v. Caregivers Staffing Servs., No. 1:15-cv-01579,
2017 U.S. Dist. LEXIS 11259, at *7 (E.D. Va. Jan. 26, 2017) (finding “the DOL rule did not
become effective until the D.C. Circuit reversed and issued a mandate, making the reversal
effective.”); see also Alves v. Affiliated Home Care of Putnam, Inc., No. 16-CV-1593, 2017 U.S.
Dist. LEXIS 17893, at *8 (S.D.N.Y. Feb. 7, 2017) (indicating the Regulation became effective
on October 13, 2015). 4
Other courts analyzing the issue, however, have reached the opposite conclusion. For
example, after the decision in Bangoy, another court in this district held “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.” Dillow v. Home Care Network, Inc., No. 1:16-cv612, 2017 WL 749196 (S.D. Ohio Feb. 27, 2017). In recognizing judicial decisions are generally
applied retroactively, the court surmised, as with any case in litigation, there was a significant
possibility the district court’s decision in Weil would be overturned on appeal; thus, an effective
date of January 1, 2015 was a foreseeable consequence of the appellate process. Id. at 4.
The two most recent courts to decide this issue also concluded the effective date is
January 1, 2015, relying heavily on the court’s reasoning in Dillow. See Evans v. Caregivers,
Inc., No. 3:17-cv-402, 2017 WL 2212977 (M.D. Tenn. May 19, 2017); see also Guerrero v.
Moral Home Services, Inc., No. 16-23051-CIV-MORENO, 2017 WL 1155885 (S.D. Fl. March
27, 2017). 5
The Court in Alves did not analyze the issue in depth.
The court in Guerrero asserted that “[s]ince Bangoy, all four district judges to analyze the issue in depth—
including one judge in the same district—have concluded that the effective date is January 1, 2015.” Guerrero,
2017 WL 115885 at *3. The court in Evans relies on this statement. Evans, 2017 WL 2212977 at *3. This Court’s
research, however, revealed at least one district court case finding the effective date is October 13, 2015 because
“the DOL rule was a legal nullity during the time-frame for which Plaintiff seeks overtime pay.” Sanchez, 2017 WL
380912 at *2-3.
Having found no binding authority, the Court finds the reasoning in Bangoy remains
persuasive, finding the effective date to be after the D.C. Circuit issued its mandate. 6 While the
Court recognizes it appears to be joining the minority of district courts to decide the issue, the
undersigned cannot ignore that during the time for which Plaintiff now seeks overtime pay,
employers were not technically required to pay overtime pursuant to the vacatur. Accordingly,
the Court is empowered to conclude the Regulation was a legal nullity until the D.C. Circuit
issued its mandate.
As for retroactive application, the Court is cognizant that judicial opinions are generally
applied retroactively. Harper v. Va. Dep't of Taxation, 509 U.S. 86, 97 (1993). However, as the
court in Bangoy explained:
[T]he fact that the DOL has indicated that it will not bring enforcement for
violations that occurred before the Court of Appeals’ reinstated the rule strongly
supports that the rule should not be given retroactive effect in cases between
private parties. Indeed, good 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
Bangoy, 2015 WL 12672707 at *3 (quoting Skidmore v. Swift & Co., 323 U.S. 134, 139-40,
(1944)). While not binding, this Court likewise finds persuasive the DOL’s pronouncement
following the mandate that it would not enforce the Regulation until November 12, 2015 as
evidence the rule should not be given retroactive effect in cases between private parties.
Plaintiff relies heavily on the retroactive rule established in Harper. Reliance on Harper,
however, presents a critical flaw when applied to this case: it presupposes the interpretation of an
existing and valid law. The D.C. Circuit in Weil, however, was not applying a new interpretation
Following the mandate, the DOL issued a pronouncement that it would not enforce the Regulation until November
12, 2015. This presents the question of whether the effective date is October 13, 2015, when the mandate was
issued, or November 12, 2015, when the DOL indicated enforcement would begin. While the undersigned is
inclined to find that an enforcement date determined by the DOL does not alter the effective date determined by
mandate, the Court need not decide this issue to resolve the matter herein.
of a law already in effect; rather, it implemented a substantive regulation which had never before
been in effect. Accordingly, when analyzing the facts presented herein, the Court finds reversal
should be applied prospectively, as was found to be the proper application of a similar vacatur.
MCI Telcoms. Corp. v. GTE Northwest. Inc., 41 F. Supp. 2d 1157 (D. Or. 1999). In MCI, FCC
regulations were vacated and stayed by the Eighth Circuit. Id. at 1162. The Supreme Court
subsequently reversed the Eighth Circuit, finding the regulations in question were valid. Id. On
remand, the Court declined to apply the judicial opinion retroactively, explaining “[t]he court
perceives a crucial distinction between applying a new interpretation of a law that admittedly
was in effect during the relevant time period, versus applying a substantive regulation that never
was in effect to begin with. Cf. Rivers, 511 U.S. at 311 (declining to apply new legislative
enactment retroactively and reiterating general principle that statutes operate only prospectively);
Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208-09, (1988) (refusing to apply substantive
regulations retroactively).” Id. at 1163.
The undersigned is not persuaded by the court’s explanation in Dillow finding “[i]t 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.” Dillow, 1:16-cv-612, 2017 U.S. Dist. LEXIS 27133, at *13. This
reasoning, in essence, requires third-party observers such as Defendants, who were neither
involved nor in control of the arguments set forth in Weil, to nevertheless anticipate retroactive
application on appeal and act accordingly.
Finally, although the district court’s decision was later reversed on appeal, “[r]eversal of
the orders on the merits does not negate the fact that they were valid, effective orders.” MCI., 41
F. Supp. 2d at 1163. The Court agrees with Defendants in this regard that “[b]oth employers and
employees should be able to rely upon judicial vacatur of regulations without fear that on appeal
they may be retroactively liable for such reliance.” (Doc. 30, PageID 592).
otherwise would effectively render a court’s ability to issue future vacaturs meaningless.
Here, the sequence of events created a legal nullity which prevented the Regulation from
ever taking effect until the D.C. Circuit issued its mandate on October 13, 2015. Accordingly,
the Court concludes the regulation should be applied prospectively, and Defendants were entitled
to rely on the decision of the D.C. district court, which vacated the rule before it went into effect.
Upon review, the Court finds that Defendants are entitled to judgment as a matter of law.
Plaintiff’s last day of employment with Defendants was on September 29, 2015. She resigned
prior to the effective date of the new Regulation. As such, Plaintiff was an exempt employee not
entitled to overtime compensation. Accordingly, Plaintiff’s claims under the FLSA and
corresponding state law claims under O.R.C. § 4111 et. seq., and O.R.C. § 41135.15 fail as a
matter of law.
Consistent with the foregoing, Defendants’ Motion for Judgment on the Pleadings (Doc.
21) is GRANTED.
The Ohio Minimum Fair Wage Standards Act is to be construed in
accordance with the FLSA. Douglas v. Argo-Tech Corp., 113 F.3d 67, 69 n.2 (6th Cir. 1997);
Ohio Rev. Code § 4111.03(A). Additionally, Plaintiff’s claim based upon the Ohio Prompt Pay
Act depends entirely on the resolution of Plaintiff’s claims for unpaid overtime. Therefore,
dismissal of Plaintiff’s FLSA claim requires dismissal of her parallel state law claims as well.
Plaintiff’s claims are DISMISSED WITH PREJUDICE.
Accordingly, Plaintiff’s Motion To Conditionally Certify a FLSA Collective Action,
Approve Notice and Expedited Consideration (Doc. 16) is DENIED.
IT IS SO ORDERED.
s/Michael R. Barrett
Michael R. Barrett, Judge
United States District Court
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