In a case of first impression, the Ninth Circuit recently held that “house parents” at a home for mentally troubled children are not entitled to the overtime protections of the Fair Labor Standards Act (FLSA).

Plaintiffs were a married couple formerly employed by Family Centered Services of Alaska (FCSA), a non-profit organization that provides housing for “severely emotionally disturbed” children. Plaintiffs claimed that they often worked almost 100 hours per week and filed suit, asserting that the FCSA was subject to the overtime requirements of the FLSA because it was operating “an institution primarily engaged in the care of the . . . mentally ill or defective who reside on the premises of such an institution.” The district court agreed, granting summary judgment on the issue, and the defendant appealed.

The Ninth Circuit reversed, finding that FCSA was not covered by the statute for two primary reasons. First, the court held that the homes were not “primarily engaged” in the type of “care” contemplated by the statute. The court noted that the FCSA’s main function was to provide the children with housing, not treatment. While children “presumably benefited from Plaintiffs’ ‘care’ as house parents,” they received their psychological and medical treatment almost exclusively outside the home. In addition, the court determined that the FCSA was not the type of “institution” contemplated by the statute, which refers to hospitals and nursing homes. The court further observed that both legislative history and interpretive guidance from the Department of Labor was consistent with its ruling. As such, the court remanded for further proceedings consistent with its decision.