Companion Services Lawsuit Update

The following Update was published in the National Association for Home Care, NAHC Report on May 7, 2015.  

A three-judge panel heard oral argument on Thursday at the US Court of Appeals in  DC  on NAHC’s challenge to the validity of new Department of Labor rules governing overtime compensation for “companionship services” and “live-in domestic services.” The case involves the government’s appeal of the federal District Court ruling that sided with NAHC and invalidated both rules that were scheduled to take effect on January 1, 2015. NAHC is joined in the lawsuit by the International Franchise Association and the Home Care association of America.

In the appeal, the Department of Labor (DoL) is represented by the US Justice Department. NAHC and its co-plaintiffs are represented by Maurice Baskin of Littler Mendelson and Bill Dombi, Director of NAHC’s Center for Health Care Law.

The judges expressed a great deal of interest in the DoL rule change affecting live-in services. It appeared the reason for their interest was two-fold. First, that rule had not been previously addressed by the US Supreme Court, in contrast to the Supreme Court ruling in a 2007 case brought by NAHC  challenging  union efforts to stop application of the “companionship services” overtime exemption with workers employed by home care companies. Second, the language in the law on live-in domestic services is different than the law on the companionship services exemption as to the power of DoL to “define and delimit” terms.

Both sides presented strong arguments on the case indicating that the matter presents complex and difficult issues of law. NAHC’s arguments focused on the impact of the rule change on consumers of home care and the rules’ complete eradication of the overtime exemptions in the face of congressional actions to retain it for nearly 40 years.  The DoL counsel argued that DoL has the power to fill definitional gaps in the law with respect to such terms as “companionship services” and which employees the overtime exemption applied to. That focus was intended to take advantage of standards of law that give deference to federal agency interpretations where the plain language of the law passed by Congress does not full provide the needed interpretation.

It is expected that the Court of Appeals will issue a ruling in the next two months as the Court goes on recess in July. In the event that NAHC is successful in defeating the government’s appeal, it can be anticipated that DoL will make an effort to gain review before the Supreme Court. NAHC and its partners are also committed to take all steps available to prevent the challenged rules from taking effect, including an appeal to the Supreme Court if needed. Stay tuned to NAHC Report for any developments in this important litigation.

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