JACKSON et al v. SWEET HOME HEALTHCARE LLC et al
MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE GENE E.K. PRATTER ON 4/4/2017. 4/5/2017 ENTERED AND COPIES E-MAILED.(kp, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
NAKIA JACKSON, et al.,
SWEET HOME HEALTHCARE, et al.,
APRIL 4, 2017
Plaintiffs are employees of Sweet Home Healthcare and Sweet Home Primary Care.
These employees have filed suit for alleged violations of the Fair Labor Standards Act (FLSA)
and the Pennsylvania Minimum Wage Act (PMWA). The employers ask the Court to dismiss
the Complaint, arguing that Plaintiffs were exempt employees, and that certain changes to
Department of Labor regulations that purported to remove the claimed exemption are invalid.
The Court heard oral argument on the matter, and denies the motion.
Plaintiffs are home health aides and direct care workers who claim that they were
unlawfully not paid overtime wages, in violation of the FLSA and PMWA. The Plaintiffs assert
that while some of them are classified as employees by the Defendants, others are erroneously
classified as “independent contractors.” Plaintiffs claim to bring this action as both a collective
action and a class action in order to accommodate all employees in the same situation. They
allege that the relevant time period is May 2012 through the present. The employees claim that
they provide “home care support and services to elderly and disabled clients such as medical
assistance, companionship services, homemaking services and other home care services inside
the clients’ household.” They also contend that they are not subject to any FLSA exemption.
Defendants move to dismiss on the ground that there is an exemption.
A Rule 12(b)(6) motion to dismiss tests the sufficiency of a complaint. Although Rule 8
of the Federal Rules of Civil Procedure requires only “a short and plain statement of the claim
showing that the pleader is entitled to relief,” Fed.R.Civ.P. 8(a)(2), in order to “give the
defendant fair notice of what the . . . claim is and the grounds upon which it rests,” Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citations and quotations omitted) (alteration in
original), the plaintiff must provide “more than labels and conclusions, and a formulaic recitation
of the elements of a cause of action will not do.” Id. (citation omitted).
To survive a motion to dismiss, the plaintiff must plead “factual content that allows the
court to draw the reasonable inference that the defendant is liable for the misconduct
alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Specifically, “[f]actual allegations must
be enough to raise a right to relief above the speculative level. . . .” Twombly, 550 U.S. at 555
(citations omitted). The question is not whether the claimant will ultimately prevail but whether
the complaint is “sufficient to cross the federal court’s threshold.” Skinner v. Switzer, 562 U.S.
521, 530 (2011) (citation omitted). An assessment of the sufficiency of a complaint is thus “a
context-dependent exercise” because “[s]ome claims require more factual explication than others
to state a plausible claim for relief.” W. Penn Allegheny Health Sys., Inc. v. UPMC, 627 F.3d 85,
98 (3d Cir. 2010) (citations omitted).
In evaluating the sufficiency of a complaint, the Court adheres to certain well-recognized
parameters. For one, the Court “must only consider those facts alleged in the complaint and
accept all of the allegations as true.” ALA, Inc. v. CCAIR, Inc., 29 F.3d 855, 859 (3d Cir. 1994)
(citing Hishon v. King & Spalding, 467 U.S. 69, 73 (1984)); see also Twombly, 550 U.S. at 555
(stating that courts must assume that “all the allegations in the complaint are true (even if
doubtful in fact)”); Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir. 2010) (“[A] court must
consider only the complaint, exhibits attached to the complaint, matters of public record, as well
as undisputedly authentic documents if the complainant's claims are based upon these
documents.”). The Court also must accept as true all reasonable inferences that may be drawn
from the allegations, and view those facts and inferences in the light most favorable to the
nonmoving party. SeeRocks v. City of Phila., 868 F.2d 644, 645 (3d Cir. 1989); see also Revell
v. Port Auth. of N.Y. & N.J., 598 F.3d 128, 134 (3d Cir. 2010). Nonetheless, the Court need not
accept as true “unsupported conclusions and unwarranted inferences,” Doug Grant, Inc. v.
Greate Bay Casino Corp., 232 F.3d 173, 183–84 (3d Cir. 2000) (citations and quotations
omitted), or the plaintiff's “bald assertions” or “legal conclusions,” Morse v. Lower Merion Sch.
Dist., 132 F.3d 902, 906 (3d Cir. 1997) (citations and quotations omitted).
The two employers have moved to dismiss the FLSA claim for two reasons. First, they
argue that under Department of Labor regulations, these Plaintiffs were exempt from FLSA
protection prior to January 1, 2015. Second, they argue that regulations that went into effect on
January 1, 2015, and that would potentially nullify the prior exemption, are invalid and should be
With respect to their first argument, Defendants point to 29 U.S.C. 213(a)(15), which
excludes from the FLSA overtime protections “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.” Until new regulations took effect on January 1, 2015, the
Department of Labor interpreted the quoted exclusion to include home care workers employed
by third-party care providers. 1 Defendants argue that Plaintiffs clearly fall under the scope of
this exemption and that the Court should therefore dismiss all of the FLSA claims to the extent
they seek overtime compensation prior to January 1, 2015.
Plaintiffs counter that FLSA exemptions are affirmative defenses and they have no
obligation to plead around an affirmative defense. They argue that, even so, they pleaded that
the exemptions do not apply and that their duties included “household services.” Given that
workers performing at least 20% of their domestic services in the category of homemaking are
not exempt, even prior to January 1, 2015, Plaintiffs claim that it is not clear from the face of
their Complaint that the exemptions Defendants invoke exclude them.
In reply, Defendants cite Davis v. Abington Memorial Hosp., 765 F.3d 236 (3d Cir.
2014), for the proposition that the Third Circuit Court of Appeals requires more than bare bones
pleading in the FLSA context. However, what Defendants fail to acknowledge is that Davis
addressed pleading standards for making out the prima facie case for a plausible FLSA claim –
specifically what a plaintiff must plead to show that he or she was uncompensated for overtime
work – not pleading standards relating to avoiding affirmative defenses. Thus, Davis is
As used in section 13(a)(15) of the Act, the term companionship services shall mean 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. Such services may
include 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. They may also include the
performance of general household work: Provided, however, That such work is incidental, i.e.,
does not exceed 20 percent of the total weekly hours worked. The term ‘‘companionship
services’’ does not include services relating to the care and protection of the aged or infirm which
require and are performed by trained personnel, such as a registered or practical nurse. . .
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. §§ 552.6, 552.109(a) (1975).
inapplicable here. Courts have uniformly held that unless it is apparent from the face of the
complaint that an FLSA exemption applies, granting a motion to dismiss based on an exemption
affirmative defense is inappropriate. See Anzaldua v. WHYY, Inc., 160 F. Supp. 3d 823, 826
(E.D. Pa. 2016) (refusing to dismiss FLSA case when it was not absolutely clear from the face of
the complaint that an exemption applied, citing Brody v. Hankin, 145 Fed. App’x. 768, 771 (3d
Cir. 2005)); Sloane v. Gulf Interstate Field Servs., Inc., 2016 WL 878118, at *4-5 (W.D. Pa.
Mar. 8, 2016) (“The absence of an FLSA exemption is not a required element and, therefore,
Plaintiff need not plead facts which would permit a finder of fact to conclude that an exemption
does not apply.”) Thus, even though it appears that the exemption may ultimately be the subject
of some controversy in this case, because it is not clear from the face of the Complaint that the
exemption applies and because the application of an exemption is an affirmative defense, the
Court will not dismiss the Complaint.
Even if the exemption did apply prior to January 1, 2015, Department of Labor
regulations mandating overtime pay for companionship service providers employed by third
party agencies went into effect on January 1, 2015 and eliminated that exemption. As discussed,
the Department of Labor has historically interpreted the exception in 29 U.S.C. 213(a)(15) to
include not just people employed directly by the elderly or disabled as companions, but also to
include home health care aides (short of nurses and other similarly trained professionals) who are
employed by third-party agencies. However, in 2013, the Department of Labor revised its
regulations to remove the exemption from companionship workers employed by third-party
agencies, reasoning that the types of services that they provide are increasingly similar to those
provided in institutions like nursing homes, and that therefore they should be entitled to overtime
compensation and other FLSA protections. Those changes were scheduled to go into effect on
January 1, 2015.
Defendants argue, however, that the regulations are invalid. Applying the first step of the
Chevron test, which requires courts to determine whether “Congress has directly spoken to the
precise question at issue,” Defendants insist that Congress, in 1974, intended the exemptions in
the statute to apply to individuals employed by third-party agencies, and that the Department of
Labor exceeded its authority in removing that exemption through regulation. See Chevron,
U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43 (1984).
Defendants argue that the “any employee employed” language in the exemption is broad and
shows Congress’s intent to capture all companionship service providers, no matter their
employer. They argue that Congress used the old Department of Labor definitions when it
amended the FLSA and created the exemption back in 1974, which demonstrates a reliance on
the broad exemption. They also note that the legislative history shows that Congress intended to
keep the cost of home care for the elderly low, which Defendants argue is an intent defeated by
the new regulation.
Defendants try to persuade the Court that a recent case from the Court of Appeals for the
D.C. Circuit that addressed this very issue should be ignored, and also fail to fully acknowledge
that Supreme Court precedent undermines their argument. See Long Island Home Care v. Coke,
551 U.S. 158 (2007); Home Care Ass’n of Am. v. Weil, 799 F.3d 1084 (D.C. Cir. 2015)
(Srinivasan, J.). In Coke, the Supreme Court faced the converse of the argument here – a home
health care aide employed by a third-party agency argued that the Department of Labor did not
have authority to extend the exemption to employees of third-party agencies. Coke, 551 U.S.
158. The employee argued that Congress clearly did not intend for third-party agency employees
to be covered by the exemption. Various amici argued, much as Defendants argue here, that
Congress’s intent was the opposite, and that the “unambiguous language” of the exemption
requires that third-party agency employees are covered by the exemption. See Weil, 799 F.3d at
1090-91 (analyzing, in depth, the arguments advanced in Coke). The Supreme Court, however,
chose a middle ground and held that “the text of the FLSA does not expressly answer the thirdparty-employment question” and that the legislative history held no “clear answer.” Coke, 551
U.S. at 168. Absent a clear, unambiguous answer in the statutory text, the Supreme Court held
that the question of “whether to include workers paid by third-parties within the scope of the
[exemption’s] definitions” is one of the “details” for the “agency to work out.” Id. at 167.
Resting in large part on this holding in Coke, the D.C. Circuit Court of Appeals held that
the Department of Labor’s new regulations taking third-party agency employees out of the
exemption fell within the authority granted to them by Congress, reasoning that because the
Coke court found that Congress left to the Department of Labor the authority to determine that
third-party agency employees belonged within the exemption (i.e., that Congress’s intent was
unclear and the Department of Labor was not compelled to take one interpretation or the other),
the Department of Labor also had the authority to determine that such personnel did not belong
in the exemption. See Weil, 799 F.3d at 1090-91. The Weil court further held that under the
second step of the Chevron analysis, which requires courts to determine whether an agency’s
construction of a statute is reasonable, the Department of Labor’s new regulations passed muster,
noting that the Department simply recognized a change in the home care industry that made
those workers more like professionals with a vocation than casual babysitters. Id. at 1093-94.
Finally, the Weil court noted that this reasoned explanation for the new regulation demonstrated
that it was not arbitrary or capricious. Id. at 1095.
The Court will accept the D.C. Circuit Court of Appeals’ reasoning in Weil. Thus, even
if Plaintiffs were exempt employees prior to January 1, 2015, a point which the Court has already
concluded is unclear at this juncture, after January 1, 2015, Plaintiffs were not exempt
For the foregoing reasons, the Defendants’ Motion is DENIED. An appropriate Order
BY THE COURT:
/s/ Gene E.K. Pratter
GENE E.K. PRATTER
United States District Judge
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