Opinion
2:05-cv-1306-GEB-KJM.
December 28, 2007
ORDER
This matter was determined to be suitable for decision without oral argument. L.R. 78-230(h).
The parties filed cross motions for partial summary judgment on the issue whether Defendants can invoke, as an exemption to the requirements of the Fair Labor Standards Act ("FLSA"), 29 C.F.R. § 785.23, which allows employees residing on their employer's premises to enter into reasonable agreements with the employer regarding hours worked, for those employees who shared a bedroom with other employees. (Pl.'s Mot. at 7:5-9; Defs.' Mot. at 1:8-9.) For the reasons stated, Defendants may not invoke § 785.23 for any employee that shares or shared a bedroom. Accordingly, Defendants' motion for partial summary judgment is denied and Plaintiff's motion for partial summary judgment is granted.
BACKGROUND
I. Facts
Defendants provide residential care for developmentally disabled individuals at Jasmine Hall Care Homes, located in residential neighborhoods throughout Sacramento, California. (Defs.' Mot. at 2:15-19.) Jasmine Hall residential care assistants ("employees") are typically on-duty five twenty-four-hour shifts per week and have two days off per week. (Joint Pretrial Statement, ¶ 3(d).) Defendants pay their employees for eight out of the twenty-four on-duty hours per shift and provide them free room and board. (Id. ¶ 3(f), (g).) Employees typically reside on the premises in bedrooms separate from the clients, but sometimes employees share bedrooms with other employees. (Id. ¶ 3(H); Defs.' Mot. at 2:16-18.)
The Secretary of Labor filed this action to recover, inter alia, on behalf of Defendants' employees, overtime back wages owed them under the FLSA for the on-duty hours that were not compensated and to enjoin Defendants from committing future minimum wage and overtime violations of the FLSA. (Compl. 1-2.) Defendants argue that their practice of only paying their employees for eight of the twenty-four on-duty hours per shift does not violate the FLSA because they qualify for an exemption under § 785.23. (Defs.' Opp'n to Pl.'s Mot. for Summ. J. (Docket # 48) at 9:13-10:6.)
II. The FLSA and Department of Labor Interpretations
"The FLSA requires that covered employees be paid at least the prescribed minimum hourly wage and receive at least 1 1/2 times their regular hourly wage for overtime hours." Bouchard v. Reg'l Governing Bd. of Region V Mental Retardation Serv.s, 939 F.2d 1323, 1327 (8th Cir. 1991) (citing 29 U.S.C. §§ 206, 207). "In 1961 the Department [of Labor ("DOL")] issued an interpretive bulletin . . . discussing what constitutes compensable work time for FLSA purposes." Id. That bulletin included a regulation titled "[e]mployees residing on employer's premises or working at home" that allows an employer to make a "reasonable agreement" with their employee regarding compensable work hours. The regulation prescribes:
[a]n employee who resides on his employer's premises on a permanent basis for extended periods of time is not considered working all the time he is on the premises. Ordinarily, he may engage in normal private pursuits and thus have enough time for eating, sleeping, entertaining, and other periods of complete freedom from all duties when he may leave the premises for purposes of his own. It is, of course, difficult to determine the exact hours worked under these circumstances and any reasonable agreement of the parties which takes into consideration all of the pertinent facts will be accepted. This rule would apply, for example, to the pumper of a stripper well who resides on the premises of his employer and also to a telephone operator who has the switchboard in her own home.29 C.F.R. § 785.23 (emphasis added).
Section 785.23 is an interpretive rule, "which merely state[s] the agency's position on what the underlying statute means in particular contexts, [and does] not have the force of law."Shannon v. Pleasant Valley Comty. Living Arrangements, Inc., 82 F. Supp. 2d 426, 433 (W.D. Penn. 2000).
In 1981, the DOL released an Opinion Letter that clarified what it means to "reside" on an employer's premises. Opinion Letter Fair Labor Standards Act (FLSA), 1981 WL 179033 (Dep't of Labor, Feb. 3, 1981) ("1981 Letter"). The DOL stated in the 1981 Letter, "[w]here the facilities offered by the employer provide a home-like environment with private quarters separate from the residents of the group home, we would regard such employees as residing there. . . ." Id. (emphasis added).
In 1988, the DOL released an Enforcement Policy for the Residential Care industry which reiterated the private quarters requirement and further defined "private quarters" to mean
living quarters that are furnished; are separate from the `clients' and from any other staff members; have as a minimum the same furnishings available to clients (e.g. bed, table, chair, lamp, dresser, closet, etc.) and in which the employee is able to leave his or her belongings during on- and off-duty periods.Hours Worked in Residential Care (Group Home) Establishments — Sleep Time and Related Issues — Enforcement Policy, 1988 WL 614199 (Dep't of Labor, June 30, 1988) ("1988 Enforcement Policy") (emphasis added).
ANALYSIS
The issue is whether Defendants may invoke § 785.23 as an exemption to the FLSA's wage requirements for those employees who "reside" on their premises but who share a bedroom with other employees. (Defs.' Opp'n at 1:8-9.) The DOL's 1988 Enforcement Policy clearly answers this question in the negative. It states that employees covered by the exemption in § 785.23 must reside in "private quarters" and "private quarters" means rooms that "are separate . . . from any other staff members." The only question, therefore, is whether deference will be given to the DOL interpretation of § 785.23.
Plaintiff argues that its 1988 Enforcement Policy is "entitled to controlling judicial deference" because it "constitutes an agency's interpretation of its own regulation to a particular industry and because it is long-standing, was developed after careful consideration, and was based on fundamental principles set forth in early landmark FLSA cases that `sleep time' can be deducted by an employer, generally, only when the employee is provided with a `homelike environment.'" (Pl.'s Mot. at 6:11-17 (citing Long Island Care Homes v. Coke, 127 S.Ct. 2339 (2007)); In re Farmers Ins. Exch., v. Farmers Ins. Exch., 481 F.3d 1119 (9th Cir. 2007).) Defendants rejoin that the DOL's interpretive bulletins are not binding regulations and are not entitled to deference.
Reasonable agency interpretations of their own regulations are entitled to deference by the courts. Cmty. Hosp. of Monterey Peninsula v. Thompson, 323 F.3d 782, 794-96 (9th Cir. 2003) (applying a reasonableness standard to an agency's interpretations of its interpretative manuals); Bouchard v. Reg. Governing Bd. of Region V Mental Retardation Serv.s, 939 F.2d 1323, 1330 (8th Cir. 1991) (evaluating the agency's interpretation of its own regulation in letter rulings for determination whether it was reasonable on its face and entitled to deference by the courts); Shannon, 82 F. Supp. 2d at 433 (requiring DOL Memorandum requirements for § 785.22 to be met when that memorandum does not contradict the statute or previous agency interpretations).
The DOL's 1988 Enforcement Policy "was developed after extensive consultation with representatives of the residential care industry [and] represents a relaxation of the rules to accommodate practices in the industry." (Pl.'s Mot. Ex. 5 (1994 Wage and Hour Opinion Letter).) In addition, the trade association of residential support services, American Network of Community Options and Resources ("ANCOR"), asked the DOL to reexamine parts of its 1988 Enforcement Policy, but notably, did not ask it to reexamine the private room requirement. (See Pl.'s Reply Ex. E. (Joni Fritz, ANCOR Comments on DOL 2004 Sleep Time Opinion Letter, (2004)).)
Defendants argue the 1988 Enforcement Policy should not be given deference because it is inconsistent with prior interpretations. Requiring private quarters separate from other employees does not conflict with § 785.23 or previous DOL interpretations of what § 785.23 requires. Defendants have not shown that the DOL ever issued an interpretation of § 785.23 permitting its use as an exclusion for those employees who share or shared bedrooms. The DOL's 1981 Letter interpreted § 785.23 to require "private quarters separate from the residents of the group home." The DOL's further clarification that "private quarters" means "separate . . . from any other staff" is not inconsistent with the 1981 Letter; the first dictionary definitions of "private" are "[s]ecluded from the sight, presence, or intrusion of others" and "[d]esigned or intended for one's exclusive use." The American Heritage Dictionary (4th ed. 2006).
Defendants argue that the DOL has had conflicting interpretations of § 785.23 because in a prior summary judgment motion in this action it opined that spouses need not be provided separate bedrooms, and in a 1998 audit of Defendants' premises the DOL found no FLSA violations. (Defs.' Opp'n at 15:7-16.) However, the DOL's further policy pronouncement regarding married couples, and past failure to enforce its private room requirement, does not support Defendants' assertion that a conflicting interpretation existed.
Finally, § 785.23 requires that employees be able to engage in "private pursuits," and provides an example of such a pursuit. For the reasons stated, it is reasonable to interpret "reside" in § 785.23 to mean living alone in a private room.
Defendants argue that deference to the DOL's interpretation is not warranted because "courts have accepted shared bedrooms [for purposes of allowing employees to invoke § 785.23] and rejected the concept of an individual room requirement." (Defs.' Opp'n at 4:13.) The cases cited by Defendants, however, interpret 29 C.F.R. § 785.22, which requires an employer to provide "adequate sleeping facilities" before sleep time may be deducted from a shift of twenty-four-hours or more. These cases do not construe the term "reside" in § 785.23. Defendants further argue that the 1988 Enforcement Policy has been rejected by courts, citing Bouchard, 939 F.2d at 1331-32. The Bouchard court, however, did not reject the 1988 Enforcement Policy altogether; Bouchard only rejected (in dicta) the amenities requirement of the 1988 Enforcement Policy. Id. at 1332.
CONCLUSION
For the reasons stated, Defendants may not invoke § 785.23 as an exemption to the FLSA's requirements for those employees who share a bedroom. Accordingly, Plaintiff's motion for partial summary judgment is granted and Defendants' motion for partial summary judgment is denied.
IT IS SO ORDERED.