D.C. Circuit Upholds DOL’s Home Care Rule; Further Appeals Likely

On August 21, 2015, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) upheld the United States Department of Labor’s (“DOL’s”) Home Care Rule and reversed the lower court’s decisions vacating the new Rule.  In the Home Care Rule, issued in October 2013, the DOL declared that third-party employers of home care “companions” or live-in caregivers for the elderly and disabled could no longer avail themselves of the longstanding statutory exemption from overtime requirements. The new Rule also set a maximum 20 percent threshold for any caregiving services to be provided by home care companions, regardless of their employer, to qualify for exempt status.  The effect of the new Home Care Rule(s) is to require overtime to be paid for the first time to more than 90% of all home caregivers throughout the country.  

A federal judge had previously held in January 2015 that the new Home Care Rule violated Congress’s intent to exempt home care employees from the overtime requirements of the Fair Labor Standards Act.  The DOL appealed that decision to the D.C. Circuit, which has now reversed the district court.

The D.C. Circuit first held that the new third-party employer regulation was entitled to “deference” under the analytical framework set forth in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).  The court then concluded that it did not have jurisdiction to consider the challenge to the DOL’s redefinition of companionship services, because its decision upholding the exclusion of third-party employers from use of the exemption leaves those employers without an injury in fact as to the narrowed definition of companionship services.  The net result is that, absent further appeal from the D.C. Circuit’s decision, the new Home Care Rule will go into effect soon.

The appellate court ruling does not take effect immediately, however.  The ruling is automatically stayed for 52 days from the date of the decision, until October 13, 2015. This stay of the court’s mandate is intended to allow the plaintiffs to file if they so choose a petition requesting that the decision by the three-judge appeal panel be re-heard by the entire D.C. Circuit.  The plaintiffs also have the option of filing a petition for a writ of certiorari asking the U.S. Supreme Court to review the D.C. Circuit’s decision within 90 days.   The Supreme Court then has the right to accept or deny the petition.  The effective date of the D.C. Circuit’s ruling could also be affected by a motion to further stay the court’s mandate pending a petition to the Supreme Court.  The plaintiffs are currently evaluating these options and will decide on a course of action soon.    

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.