The US Department of Labor is always issuing (and has always issued) regulations implementing and interpreting the Fair Labor Standards Act. Oft times, practitioners are arguing to a court either that the regulations should be deferred to or that the regulations are not binding on a court and should be struck down.
In an interesting case, a federal judge has struck down USDOL regulations barring third-party employers from claiming a minimum wage or overtime exemption for “companionship” domestic workers and an overtime exemption for live-in employees. The Court held that the agency exceeded its authority. The case is entitled Home Care Association of America et. al. v. Weil et. al., case number 1:14-cv-00967, and was filed in federal court in the District of Columbia. The new regulation was slated to go into effect January 1, 2015.
In 1974, Congress included domestic workers under the protection of the minimum wage, but excepted the minimum wage requirements to any domestic employee providing “companionship services.” Further, the overtime requirements would also not apply to live-in domestic workers. Companionship services were specifically defined as services of “care” or “fellowship” that are not performed by trained workers. Then, in October 2013, DOL modified the regulation for third-party employers (e.g. domestic care employers that are not family members) to block them from receiving these wage exemptions for companionship or live-in domestic workers. The lawsuit charged that the rule “dramatically” departed from the plain language of the exemptions and exceeded statutory authority. The DOL asserted this was “a permissible construction of the FLSA.”
Judge Leon disagreed with the DOL. The Court noted that since 2007, Congress had repeatedly failed to change the statutory language of the companionship exemption. The Court concluded that “the fact that the department issued its notice of proposed rulemaking after six of these bills failed to move is nothing short of yet another thinly veiled effort to do through regulation what could not be done through legislation.”
I tend to think that the advantage lies with the party arguing to a court that it ought give appropriate deference to the interpretation of the agency charged with the interpretation and enforcement of a particular statute. When the regulation at issue, however, diverges so markedly and plainly from the statute that it is supposed to clarify, that table gets turned fairly quickly.
I also believe that the Court got it right…