F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
JAN 6 2004
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT
T. MARIA WELDING; MARK A.
COOPER; VICKI (MORROW)
ALLSBROOKS; KATHLEEN M.
SMITH; ANDREA J. WILLIAMS;
ROBIN LEWIS; ANNETTE CUBIT;
VALERIE R. TITSWORTH; HAZEL
ERVIN; LASHAWNDA JONES;
ERMA MORROW; SHEILA
POWELL; CORDELL RICKS;
ELNITA TAYLOR,
Plaintiffs-Appellees,
v. No. 02-5068
BIOS CORPORATION, a corporation,
Defendant-Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OKLAHOMA
(D.C. No. 00-CV-771-EA)
Submitted on the briefs:
J. Daniel Morgan and Kristin L. Oliver of Gable & Gotwals, Tulsa, Oklahoma,
for Defendant-Appellant.
Steven R. Hickman of Frasier, Frasier & Hickman, LLP, Tulsa, Oklahoma,
for Plaintiffs-Appellees.
Before EBEL , HENRY , and MURPHY , Circuit Judges.
EBEL , Circuit Judge.
An employer is not required to pay overtime to an employee who provides
companionship services to the aged or infirm in a private home. The plaintiff
employees here provided services to developmentally disabled persons in a variety
of living arrangements. In determining whether these living arrangements
qualified as private homes, the district court analyzed the various living
arrangements as a group rather than one-by-one. We conclude that this was error
and, therefore, we reverse the district court’s ruling that, as a matter of law, the
defendant employer is not entitled to the so-called “companionship services”
exemption to the overtime requirement of the Fair Labor Standards Act (FLSA),
29 U.S.C. §§ 201-219. 1
Bios Corporation is in the business of providing services to
developmentally disabled individuals in Oklahoma pursuant to contracts with the
State. A number of Bios employees brought suit under the FLSA claiming they
1
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is
therefore ordered submitted without oral argument.
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were entitled to be paid overtime, i.e., time and a-half, for the hours in excess of
forty that they worked each week . Bios moved for summary judgment, arguing
that the companionship services exemption excused it from paying overtime
wages. 2 See id. § 213(a)(15). The district court analyzed the living arrangements
of the employees’ clients as a group and concluded that they did not qualify as
private homes. Accordingly, the court held that Bios was not entitled to the
companionship services exemption as a matter of law. The court therefore denied
summary judgment for Bios and effectively granted summary judgment for the
employees. In light of this holding, the parties stipulated to the amount of
damages, costs, and fees, and the district court entered final judgment for the
employees. Bios now appeals.
The Statutory and Regulatory Scheme
The FLSA provides an exemption to its overtime pay requirements for “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 (as such terms are delimited by regulations of the Secretary).” Id.
2
Bios also moved for partial summary judgment on the issues of the
appropriate statute of limitations and of its liability for liquidated damages. The
district court ruled in Bios’ favor on both of those issues and the employees did
not file a cross-appeal. Those rulings are now law of the case.
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“Congress created the ‘companionship services’ exemption to enable guardians of
the elderly and disabled to financially afford to have their wards cared for in their
own private homes as opposed to institutionalizing them.” Lott v. Rigby ,
746 F. Supp. 1084, 1087 (N.D. Ga. 1990) (citing Wage and Hour Opinion
WH-368, 91 W.H.M. 1031 (Nov. 25, 1975)).
The regulations define “domestic service employment” as “services of a
household nature performed by an employee in or about a private home
(permanent or temporary) of the person by whom he or she is employed.” 3
29 C.F.R. § 552.3.
. . . The domestic service must be performed in or about the private
home of the employer whether that home is a fixed place of abode or
a temporary dwelling as in the case of an individual or family
traveling on vacation. A separate and distinct dwelling maintained
by an individual or a family in an apartment house, condominium or
hotel may constitute a private home.
Employees employed in dwelling places which are primarily rooming
or boarding houses are not considered domestic service employees.
The places where they work are not private homes but commercial or
business establishments. . . .
Id. § 552.101(a), (b).
3
We have held that the domestic service employee need not be employed
directly by the person receiving the services or by that person’s family for the
exemption to apply. The exemption can apply even when the domestic service
employee is actually employed by a service agency, like Bios. See Johnston v.
Volunteers of Am., Inc. , 213 F.3d 559, 562 (10th Cir. 2000).
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Review Standards
We review the grant or denial of a motion for summary judgment de novo,
applying the same legal standard as the district court. Spradling v. City of Tulsa ,
198 F.3d 1219, 1221 (10th Cir. 2000). Under that standard, summary judgment is
proper “if the pleadings, depositions, answers to interrogatories, and admissions
on file, together with the affidavits, if any, show that there is no genuine issue as
to any material fact and that the moving party is entitled to a judgment as a matter
of law.” Fed. R. Civ. P. 56(c). When applying this standard, we “constru[e] all
facts and reasonable inferences in a light most favorable to the nonmoving party.”
Pub. Serv. Co. of Colo. v. Cont’l Cas. Co. , 26 F.3d 1508, 1513 (10th Cir. 1994).
“[S]ummary judgment should be granted where the evidence is such that it
would require a directed verdict for the moving party.” Anderson v. Liberty
Lobby, Inc. , 477 U.S. 242, 251 (1986) (quotation omitted). The inquiry for
summary judgment and a directed verdict are essentially the same: “whether the
evidence presents a sufficient disagreement to require submission to a jury or
whether it is so one-sided that one party must prevail as a matter of law.” Id. at
251-52. “[T]he inquiry involved in a ruling on a motion for summary judgment or
for a directed verdict necessarily implicates the substantive evidentiary standard
of proof that would apply at the trial on the merits.” Id. at 252.
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As the employer asserting that it is exempt from the FLSA’s overtime
requirements, Bios “has the burden of establishing the [companionship services]
exemption affirmatively and clearly,” Schoenhals v. Cockrum , 647 F.2d 1080,
1081 (10th Cir. 1981) (quotation omitted). “The [FLSA] constitutes humanitarian
and remedial legislation. Exemptions must be narrowly construed and are limited
to those establishments plainly and unmistakably within the terms and the spirit of
the exemption invoked.” Id.
Accordingly, Bios is not entitled to summary judgment unless it can
establish that the undisputed facts (or plaintiffs’ version of any disputed facts)
plainly and unmistakably fit within the companionship services exemption. If
there are genuine and material factual disputes such that Bios could meet its
burden of proof only if the jury resolved the factual disputes in its favor, then the
matter is not appropriate for summary judgment and it should proceed to trial. If,
however, the summary judgment record, when construed most favorably to Bios,
does not clearly and unmistakably establish the companionship services
exemption, then summary judgment may be entered for the appropriate plaintiffs.
See Anderson , 477 U.S. at 250-51.
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Analysis
Whether Bios is exempt from paying overtime to any of the plaintiffs here
depends on whether any of the residences in which plaintiffs provided services to
developmentally disabled individuals should be considered “private homes” as
that term is used in the regulations. “[T]he definition of a ‘private home’ exists
along a continuum.” Bowler v. Deseret Villager Ass’n, Inc. , 922 P.2d 8, 13 (Utah
1996). At one end of the continuum is “[a] traditional family home in which a
single family resides,” which clearly constitutes a private home. Id. At the other
end of the continuum is “an institution primarily engaged in the care of the sick,
the aged, the mentally ill or a boarding house used for business or commercial
purposes,” which clearly do not constitute private homes. Id. (quotation omitted).
In between lie a variety of living arrangements, many of which may constitute
“private homes” for purposes of the companionship services exemption.
“[A] determination whether domestic/companionship services are provided
in a private home is fact-specific and to be made on a case-by-case basis[;] . . . no
[single] factor is dispositive.” Johnston v. Volunteers of Am., Inc. , 213 F.3d 559,
565 (10th Cir. 2000) (quotation omitted). The object of this case-by-case
evaluation is not the particular provider, such as Bios, or even the particular
employee or group of employees, such as plaintiffs. Rather, because the question
is whether the services are provided in a private home, the object of evaluation is
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the living unit of the person receiving the services, i.e., the client. The client’s
living unit consists of the client’s bedroom and the common areas to which the
client has access. The court must evaluate each living unit separately to
determine where on the continuum it lies.
The district court here found that, due to the differences in the living units
of the plaintiffs’ clients, analysis of the relevant factors on an individual basis
was “unwieldy.” Aplt’s App., Vol. II, Tab 13 at 603. The court acknowledged
that an individualized analysis would show that “some plaintiffs might be entitled
to overtime for care of some clients, but some might not be entitled to overtime at
all. Further, one plaintiff might be entitled to overtime for care of one client,
while he or she might not be entitled to overtime for care of another client.” Id.
But the court preferred to evaluate the living units as a whole, rather than
individually. In this, the district court erred. We, therefore, must reverse and
remand the action for further proceedings.
In evaluating where each living unit lies on the continuum, we conclude
that the key inquiries are who has ultimate management control of the living unit
and whether the living unit is maintained primarily to facilitate the provision of
assistive services. To answer these inquiries, a court must look at many factors.
Although no single factor is dispositive, some may be more important than others.
What some courts have referred to as factors are, in reality, just historical facts
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that evidence the presence or absence of a factor. As a result, the so-called
factors that courts have considered have grown like weeds. We have reviewed the
published cases addressing the question of what is a private home to determine
what factors are most pertinent to the key inquiry.
The first factor is whether the client lived in the living unit as his or her
private home before beginning to receive the services. If so, this is a powerful
indicator that the residence is a private home because the mere onset of services
is not likely to change the nature of the living unit. See, e.g., Madison v. Res. for
Human Dev., Inc. , 39 F. Supp. 2d 542, 548 (E.D. Pa. 1999) ( Madison I )
(describing as an “easy-to-spot private home” those where “the families lived in
their homes prior to and independent of their receipt of companion services,” and
concluding homes were not private where, among other things, “[t]he clients did
not live in the homes before they became RHD clients, and they would not live in
them but for their association with RHD”), vacated on other grounds by 233 F.3d
175 (3d Cir. 2000).
The second factor is who owns the living unit. Ownership is significant
because it evidences control. Accordingly, if the living unit is owned by the
service provider, that is a significant indicator that it is not a private home. If it
is owned by the client or the client’s family, that is a significant indicator that it
is a private home. If it is owned by a third party, that is a more ambiguous
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indicator, and the court must look to see who leases the unit from the third party.
If the client or the client’s family leases the unit directly from the owner, that is
some indication that it is a private home, though not as powerful an indication as
ownership. If the service provider leases the unit, that is some indication that it is
not a private home. Compare Terwilliger v. Home of Hope, Inc. , 21 F. Supp. 2d
1294, 1299 (N.D. Okla. 1998) (relying on facts that clients owned or leased their
residences from third persons and that service provider had no legal interest in
residences in holding they were private homes), with Madison v. Res. for Human
Dev. Inc. , 233 F.3d 175, 179 (3d Cir. 2000) ( Madison II ) (holding that residences
were not private homes, and noting that clients selected residences from
provider-approved list and provider then leased the residences and subleased them
to clients), and Linn v. Developmental Servs. of Tulsa, Inc ., 891 F. Supp. 574, 579
(N.D. Okla. 1995) (relying on fact that service provider acquired all the
residences for its clients in holding residences were not private homes).
The third factor is who manages and maintains the residence. In other
words, who provides the essential things that the client needs to live there, such
as paying the mortgage or rent, paying for gas, electricity, and water, providing
clean linens and clothes, and providing food? Again, this is relevant to who has
control over the living unit. If many of the essentials of daily living are provided
for by the client or the client’s family, that weighs strongly in favor of it being a
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private home. If they are provided for by the service provider, that weighs
strongly in favor of it not being a private home. If both the client and/or the
client’s family and the service provider provide these essentials, then the factor is
more ambiguous. Cf. Johnston , 213 F.3d at 563, 565 (relying on fact that service
provider’s employees managed the residences in holding residences not private
homes).
The fourth factor is whether the client would be allowed to live in the unit
if the client were not contracting with the provider for services. This, too, is
relevant to the issue of control. If the client would be allowed to live in the unit
without contracting for the services, that weighs in favor of it being a private
home. If the client would not be allowed to live in the unit without contracting
for the provider’s services, that weighs in favor of it not being a private home.
See, e.g., Madison II , 233 F.3d at 183 (relying on fact that clients could not
remain in residence if they terminated their relationship with service provider in
holding residences were not private homes); Johnston , 213 F.3d at 563 (noting
that only clients of service provider could live together and that if one house mate
terminated provider’s services, either that house mate or the other(s) would have
to leave).
The fifth factor is the relative difference in the cost/value of the services
provided and the total cost of maintaining the living unit (including government
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subsidies). This is directly related to the purpose for which the living unit is
primarily maintained. If the cost/value of the services is incidental to the other
living expenses, that weighs in favor of it being a private home. If the cost/value
of the services is a substantial portion of the total cost of maintaining the living
unit, that weighs in favor of it not being a private home.
Finally, the sixth factor is whether the service provider uses any part of the
residence for the provider’s own business purposes. Again, this is relevant to the
issue of control. If the service provider does not use any part of the residence for
its own purposes, that weighs in favor of it being a private home. If the service
provider uses some part of the residence for its own business purposes, that
weighs in favor of it not being a private home. See, e.g., Johnston , 213 F.3d at
565 (relying on fact that service provider had right to take room in residence to
use as office for employees in holding residences were not private homes). The
service provider’s use of an area to maintain items that are specifically for the
client’s care and that are of a nature that one would expect to maintain at a
private home, however, does not weigh against it being a private home.
To be entitled to the companionship services exemption, Bios must
establish that the foregoing factors and any other factors that may be applicable,
when considered together, clearly and unmistakably establish that the particular
living unit in question is a private home. If Bios cannot meet this burden, it
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cannot prevail even at trial, let alone on summary judgment. To prevail on
summary judgment, Bios must prove, clearly and unmistakably, that the living
unit is a private home and that there are no facts in the record creating a material
dispute on this issue. If no jury could find, based upon the summary judgment
record, that Bios clearly and unmistakably established the companionship services
exemption even when all disputed facts and inferences are construed in its favor,
then the court may enter summary judgment for the relevant plaintiff(s). In
determining whether Bios has met its burden, the district court should analyze
each living unit separately.
The judgment of the district court is REVERSED and the matter is
REMANDED for further proceedings consistent with this opinion.
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