Long Island Care at Home v. Coke

Long Island Care at Home’s Arguments

The first question confronting the Court is whether the DOL’s Regulations were entitled to deference under Chevron. In the view of Long Island Care at Home, when Congress has delegated rulemaking authority to an agency, a federal court must recognize that Congress intended any statutory ambiguity to be “resolved, first and foremost, by the agency," Brief of Petitioner at 10, 16 (citing Smiley v. Citibank (South Dakota), N.A., 517 U.S. 735, 741 (1996)). It concedes, however, that not all agency interpretations merit such deference. Id. at 10, 16-17.

As a means of distinguishing between those that do and those that do not, Long Island Care at Home directs the justices to United States v. Mead Corp., 533 U.S. 218 (2001). Brief for Petitioner at 11, 17. In Mead, the Court declared that “administrative implementation of a particular statutory provision qualifies for Chevron deference when it appears that Congress delegated authority to the agency generally to make rules carrying the force of law, and that the agency interpretation claiming deference was promulgated in the exercise of that authority.” United States v. Mead Corp., 533 U.S. 218, 226-27 (2001). According to Long Island Care at Home, both the specific delegation of authority found in Section 213(a)(15), which instructs the Secretary to define and delimit its terms by regulations, and the general delegation of authority found in the Amendments, which authorize the Secretary “to prescribe necessary rules, regulations, and orders with respect to amendments made by this Act,” provide indisputable proof that Congress fully intended for the Department “to make rules carrying the force of law.” Brief for Petitioner at 11, 17-19. (citations omitted).

Long Island Care at Home contends that there is ample evidence of the Department’s “lawmaking intent”—engaging in full notice-and-comment rulemaking, expressly invoking its delegated lawmaking authority, articulating the rule in “binding terms that have the look and feel of ‘law,’” and affirming its intent in a 2005 Advisory Memorandum—all of which conclusively establish that the Department relied upon its lawmaking authority in promulgating the Regulations. Id. at 11-12, 23-25. Moreover, inasmuch as the Court has made clear its belief that interpretations can receive Chevron deference, the fact that the Regulations were set forth in a subpart headed “Interpretations,” rather than “General Regulations,” is irrelevant, the opinion of the Second Circuit notwithstanding. Id. at 13, 27-29. Thus, it contends, the Regulations merit deference. Id. at 12, 30-31.

Anticipating the respondent’s arguments, Long Island Health Care insists that Coke’s efforts to rely on legislative history as well as her attempts to narrow the meaning of “employed in domestic service” and “companionship services” each fall short of the mark. Id. at 12-14, 35-36. Most significantly, it asserts, Coke’s reading of the Amendments would completely exclude any employee who did not work either for the homeowner or for an employer large enough to qualify as an enterprise from the FLSA’s minimum wage and overtime provisions. Id. at 14, 36-37. In Long Island Care at Home’s opinion, “such omissions that would be inconsistent with the understanding, reflected in the legislative history, that the 1974 Amendments were generally meant ‘to include within the coverage of the FLSA all employees whose vocation is domestic service.’” Id. at 14, 38-39 (citing S. Rep. No. 93-690 at 20).

The second, comparatively minor, question confronting the Court is whether the Second Circuit should have given weight to the Department’s interpretation of the Regulations and addressed the governing provisions of the Fair Labor Standards Act. Citing Stinson v. United States, 508 U.S. 36 (1993), Long Island Care at Home contends that, if an “irreconcilable conflict” required domestic workers to be employed by homeowners, then the Second Circuit was obligated to defer to the Department’s reading of its own regulations. Id. at 14. Furthermore, Long Island Care at Home charges, to assert that the Regulations are once “unambiguous” and “jarringly inconsistent” is in itself jarringly inconsistent. Id. at 14, 40-41. The Department has supplied a reasonable way of resolving any ambiguity and, therefore, the third-party employer regulation should stand, with or without Chevron deference. Id., 14, 42.

Lastly, Long Island Care at Home appeals to the Court’s sense of precedent, stressing that the third-party employer regulation has governed whether homecare companions are entitled to minimum wages and overtime pay for more than thirty years. During this time, it observes, Congress has never seen fit to disturb the Amendments, despite having repealed several other exemptions. Id. at 15, 42-45.

Coke’s Arguments

Coke’s arguments generally follow two lines of reasoning: first, that the Regulations are inconsistent with congressional intent and, second, that the Regulations are, as a matter of policy, “out of step” with the present day. Medill News Service, Long Island Care at Home v. Coke, Jan. 5, 2007.

To begin with, Coke takes issue with Long Island Care at Home’s reading of the FLSA, pointing out that it does not exempt employees employed “to provide companionship services” to the elderly or infirm, but rather, exempts only employees “employed in domestic service employment to provide companionship services” to the aged or infirm, the ordinary meaning of which is “to be employed in a household by the household.” Brief in Opposition of Certiorari at 20-21. (citing 29 U.S.C. § 213(a)(15) (emphasis added)). Thus, the Regulations, by exempting “an employer or agency other than the family or household using their services,” contradict the text of the FLSA. Id. at 21.

Both the overall purpose of the Amendments and their legislative history, Coke argues, demonstrate that Congress intended the term “domestic service employment” to encompass only employment within a home by the homeowner. Id. at 21. In support of this assertion, Coke quotes the Senate Report: “The generally accepted meaning of domestic service relates to services of a household nature performed by an employee in or about a private home of a person by whom he or she is employed.” Id. (quoting 2 Legislative History of the Fair Labor Standards Amendments of 1974 1524 (1976) (S. REP. NO. 93-690, 93rd Cong., 2d Sess. 20 (1976)). “Congress,” Coke concludes, “did not intend to exempt companions employed by third parties.” Id. at 25.

Arguing that there was never any question whether domestics employed by agencies affect interstate commerce and were covered under the FLSA, Coke aligns herself with the reasoning behind the original proposal for the Regulations. Id. at 21-23. That proposal, published on October 1, 1974, stated: "Employees who are engaged in providing . . . companionship services and who are employed by an employer other than the families or households using such services, are not exempt under section 13(a)(15) of the FLSA.” Id. at 22-23 (citing 39 Fed. Reg. 35385 (Oct. 1, 1974)). At the time, the Department reasoned that such employees were nonexempt because “their employment was subject to the Act prior to the 1974 Amendments and it was not the purpose of those Amendments to deny the Act’s protection to previously covered domestic service employees.” Id. at 23 (citing 39 Fed. Reg. 35385 (Oct. 1, 1974)). Only by mangling the text of the Act, Coke argues, was the Department able to replace the original proposal with its very opposite – the current Regulations. Id. at 23.

Coke also contends that, as a matter of public policy, the FLSA’s exemptions should be narrowly construed. Id. at 4. Higher payroll costs hardly justify the claim that they should be broadly construed, she states, “because Congress obviously understood that compliance with the Act would cost employers money and yet this Court has repeatedly held that the Act’s exemptions must ‘be narrowly construed.’” Id. (citing Mitchell v. Kentucky Finance Co., 359 U.S. 290, 295 (1959)).

Finally, Coke disputes the amicis’ claim that third-party employers, if nonexempt, will seek to avoid increased costs by reducing their workers’ hours. Id. at 4-5. First of all, she observes that many state wage and hour laws do not treat domestic service any differently than other employment and so contain no companionship exemption. Id. at 5 (citing the laws of ten states). Referring to Long Island Care at Home’s petition for certiorari, Coke asserts that “[i]t simply cannot be the case that employers in Illinois, Colorado and elsewhere can pay companions a minimum wage and premium pay for overtime while in New York respecting such minimum standards ‘threaten[s] a serious dislocation of care.’” Id. (quoting Petition for Certiorari at 13-16). Second, Coke contends that, if there is a change in the applicable wage and hour law or its construction, the reimbursement rates of Medicare and other government programs should be adjusted to compensate for the resulting increase in costs. Id. at 6. Third, citing data from the Bureau of Labor Statistics and the Department of Health and Human Services, Coke notes that, nation-wide, more than 90% of homecare workers receive the current federal minimum wage and the vast majority of consumers receive less than forty hours of care per week Id. at 7-8 (citations omitted). Thus, bringing third-party employers into compliance with the FLSA will not dramatically increase the cost of services. Id. Lastly, Coke argues that the greatest threat to the availability and quality of companionship services is not that third-party employers will be required to comply with minimum compensation standards, but rather that they will fail to do so, further aggravating what is already a severe shortage of homecare workers. Id. at 8.