Long Island Care at Home v. Coke


Must a federal court defer to a Department of Labor regulation that interprets the Fair Labor Standards Act as exempting home care workers employed by agencies or other third parties if the regulation was published under the heading “Interpretations?”

Oral argument: 
April 16, 2007

The Fair Labor Standards Act sets the minimum wage and other mandatory benefits for workers. Homecare workers such as babysitters and companions to the elderly are exempt from its provisions when employed directly for the family they work for, but what about when they are employed by a third party provider of such services? After following a notice-and-comment rulemaking procedure the Department of Labor said, in 29 C.F.R. § 552.109(a) under the heading “interpretations,” that such third-party employed workers are exempt from the minimum wage requirement. Coke, a homecare worker employed by third-party provider Long Island Care at Home, brought suit questioning the validity of § 109(a). The Second Circuit Court of Appeals held the regulation was unenforceable. The United States Supreme Court now takes up the question of whether the Second Circuit gave the proper amount of deference to the Department of Labor’s stance on the regulation in question.

Questions as Framed for the Court by the Parties 

Whether the Second Circuit erred in refusing to give deference under Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984), to a thirty-year-old Department of Labor regulation—a regulation that has twice been upheld by the Tenth Circuit—on the ground that, even though it was promulgated under express grants of legislative authority and after full notice-and-comment rulemaking, the regulation was contained in a subpart headed “Interpretations.”
Whether, in holding that a longstanding Department of Labor regulation was not persuasive and thus undeserving of any deference under Skidmore v. Swift & Co., 323 U.S. 134 (1944), the Second Circuit erred by failing to address the governing provisions of the Fair Labor Standards Act and by declining to give any weight to the Department’s interpretation of its own regulations.


Originally, the Fair Labor Standards Act (FLSA) mandated a minimum wage and overtime benefits to those workers whose employer was engaged in commerce or produced goods for commerce and whose gross sales met or exceeded $250,000. 29 U.S.C. § 213. In 1974, in order to ensure all those employed in “domestic service” (maids, butlers, and household cooks for example) were given the benefit of the FLSA’s provisions, Congress amended the FLSA to provide coverage for these employees. 29 U.S.C. § 213(a)(15). However Congress specifically left uncovered those employed “on a casual basis” as babysitters and companions to the elderly. Id. By defining the exempted class of employees in reference to future regulations of the Secretary of Labor, Congress left that work for the Department of Labor (DOL), the agency charged with carrying out the provisions of the FLSA. See Coke v. Long Island Care at Home, Ltd., 376 F.3d 118, 123 – 35 (2d Cir. 2004) (detailing the applicable statutory and regulatory schemes).

In exercising this authority, DOL initiated a notice-and-comment rulemaking procedure. Id. at 124. They gave the public notice that they were proposing to mandate that homecare workers such as companions and babysitters be given the benefits of the FLSA. Id. After accepting comments from those interested members of the public, the DOL decided to change its course and exempt those workers from FLSA. Id. As such, they drafted 29 C.F.R. § 552.109(a), which was then placed under a heading titled “Interpretations” within the text of 29 C.F.R. § 552. Id.

Evelyn Coke is a companion to the elderly employed by Long Island Care at Home. Id. at 122. Relying on the rule announced in 109(a), Long Island Care at Home did not give her or other such workers minimum wage or overtime benefits. Id. Coke challenged the validity of the rule announced in 109(a) and Long Island Care at Home’s adherence to it. Id.

In granting a summary judgment motion for Coke’s employer, the District Court ruled that Long Island Care at Home was justified in not giving Coke minimum wage, and that the rule announced in 109(a) was entitled to the maximum deference by the courts. Id. On Coke’s first appeal, the Second Circuit Court of Appeals held 109(a) was invalid and unenforceable. Id. at 135. Long Island Care at Home appealed to the United States Supreme Court; and the Court granted certiorari in January of 2006, remanding the case to the Second Circuit with orders that they reconsider in light of the DOL’s Wage and Hour Advisory Memorandum No.2005-1 (December 1, 2005). Coke v. Long Island Care at Home, Ltd., 462 F.3d 48, 50 (2006) (the Supreme Court order may be found at 126 S.Ct. 1189). Upon reconsideration of the case in light of the DOL memo, the Second Circuit adhered to its original position that 109(a) was unenforceable. Id. Long Island Care at Home again appealed to the Supreme Court, who agreed to hear the case.


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.


At the outset, it should be made clear that the outcome here is almost certainly not the end of the discussion about whether the nation’s 1.4 million homecare workers are entitled to the wage protections of the FLSA. See New York Times, Justices to Hear Case on Wages of Home Aides, Mar. 25, 2007. Should the Supreme Court agree with the Second Circuit that 552.109(a) is invalid, Congressional modification of the FLSA or a new regulation promulgated by DOL would effectively overturn that decision and preserve the status quo. (How quickly that might occur, and what happens in the interim, are interesting questions.) On the other hand, should the Supreme Court reverse the Second Circuit and remand the case, the Second Circuit would probably have to take up the question of whether § 109 was a valid rulemaking, since the final rule was substantially different from the proposed rule subject to the notice and comment procedure. See Respondent’s Brief in Opposition to the Petition for Writ of Certiorari at 26. Either way a pronouncement on §109 will not definitively and permanently answer the policy question of how homecare workers should be compensated. That will be—and should be—a question for Congress and the DOL to answer. What this case will do is clarify the existing regulations promulgated under the FLSA and provide guidance to the Courts of Appeal on how much deference to give agency decisions labeled as “Interpretations” but nevertheless promulgated under notice-and-comment rulemaking procedures.

The Fair Labor Standards Act

Among other things, the FLSA requires that enterprises engaged in commerce or the production of goods for commerce compensate their employees at one and one-half times or two times a specified minimum wage—colloquially known as time and a half and double time, respectively—for overtime hours unless those employees are members of an exempt class. 29 U.S.C. § 201, et seq. In 1974, Congress amended the FLSA (“Amendments”) to provide coverage for “employees in domestic service.” See 29 U.S.C. §§ 206(f), 207(l).

The Amendments contain exceptions for several classes of employees, two of which are casual babysitters and companions to the elderly or infirm. 29 U.S.C. § 213(a)(15). According to Section 213(a)(15), these classes consist of “any employee employed on a casual basis in domestic service employment to provide babysitting services or 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.” Id. That section further provides that its terms are to be “defined and delimited by regulations” prescribed by the Secretary of the Department of Labor (“Department”). Id. Likewise, the Amendments conferred a general grant of rulemaking authority upon the Secretary—a matter of no small importance in the present case. 1974 Amendments to the Fair Labor Standards Act, Pub. L. No. 93-259, § 29(b), 88 Stat. 76.

Just one year later, the Department prescribed two regulations (“Regulations”), 29 C.F.R. § 552.109(a) and 29 C.F.R. § 552.3, in furtherance of that goal. At issue here is 552.109(a), which states that “[e]mployees who are engaged in providing companionship services . . . 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.”

Administrative Law Procedures—A (very) Brief Overview

Agencies like DOL may not arbitrarily use the legislative authority that Congress grants to them under statutes like FLSA. Rather, they must follow strict procedures in crafting rules. The most commonly mandated and used procedure for crafting a rule is informal rulemaking, commonly known as notice-and-comment rulemaking. See Strauss, Rakoff & Farina, GELLHORN & BYSE’S ADMINISTRATIVE LAW (revised 10th ed. 2003), 13 – 23, 519 – 38. Using this procedure, an agency gives the public notice of the rule it is proposing (a notice of proposed rulemaking) and solicits comments from the public. Id. The agency compiles a record consisting of reports and public comment and then makes a rule based on the contents of that record. Id. When an agency makes a clarification that is not intended to obtain legislative force, the notice-and-comment rulemaking procedure is not required. Id. at 483 – 88. However the Department of Labor, in creating 552.109(a) decided to use the notice-and-comment process. 376 F.3d at 124.

In deciding whether 522.109(a) was entitled to the high level of deference that the courts must give to a rule or the lower level of deference which courts must give to a clarification, the Second Circuit decided that the heading “interpretations,” under which 552.109(a) was placed was more telling than the use of the notice-and-comment rulemaking. 462 F.3d at 51. The Department of Labor argues that because of the notice-and-comment rulemaking, 552.109(a) was intended to have legislative force. Brief for Petitioners at 12. Coke argued, and the Second Circuit agreed, that inconsistencies in Congressional intent, other DOL regulations, and the insufficiency of the Department of Labor’s explanation for 552.109(a) show that the statement was intended to be an interpretation and therefore not entitled to much deference by the courts. 462 F.3d at 52.


In administering statutes such as the FLSA, agencies are frequently compelled to make interpretations and “fill any gap left, implicitly or explicitly, by Congress.” Morton v. Ruiz, 415 U.S. 199, 231 (1974). In Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984), the Supreme Court articulated a two-part test for determining whether to grant deference to such interpretations. The first step is to ask whether Congress has directly spoken to the precise question at issue. Id. at 842. If it has, then the court, as well as the agency, must give effect to the “unambiguously expressed intent of Congress.” If, however, the court determines Congress has not directly spoken the precise question at issue, then the question for the court is whether the agency's interpretation is based on a permissible construction of the statute. Id. at 843. This test, and the frequent result of deference to the agency, is commonly known as Chevron deference.


Although this case is nominally concerned with the question of whether an agency’s interpretive regulation deserves the deference of a federal court, the impact of the Supreme Court’s decision will be felt well beyond the world of administrative law. For more than a quarter century, home care workers and the agencies that employ them have been operating under the belief that they were exempt from the minimum wage and overtime pay requirements of the Fair Labor Standards Act. Meanwhile, the number of home care workers surged to more than 1.4 million, raising the stakes for all concerned. The Court’s decision in this case—no matter which party prevails—is sure to affect the home care industry, the programs that support it, and the people it serves for many years to come unless Congress or the Department of Labor acts to the contrary.Written by:

Michael Fornasiero

Elizabeth Cusack