Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-15-05018/USCOURTS-caDC-15-05018-0/pdf.json

Nature of Suit Code: 899
Nature of Suit: Other Statutes - Administrative Procedure Act/Review or Appeal of Agency Decision
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 7, 2015 Decided August 21, 2015

No. 15-5018

HOME CARE ASSOCIATION OF AMERICA, ET AL.,

APPELLEES

v.

DAVID WEIL, SUED IN HIS OFFICIAL CAPACITY,

ADMINISTRATOR, WAGE & HOUR DIVISION, ET AL.,

APPELLANTS

Appeal from the United States District Court

for the District of Columbia

(No. 1:14-cv-00967)

Alisa B. Klein, Attorney, U.S. Department of Justice, 

argued the cause for appellants. With her on the briefs were 

Vincent H. Cohen, Jr., Acting U.S. Attorney, Beth S. 

Brinkmann, Deputy Assistant Attorney General, and Michael 

S. Raab, Attorney.

Eric T. Schneiderman, Attorney General, Office of the 

Attorney General for the State of New York, Barbara 

Underwood, Solicitor General, Seth Kupferberg, Assistant 

Attorney General, George Jepson, Attorney General, Office 

of the Attorney General for the State of Connecticut, Lisa 

Madigan, Attorney General, Office of the Attorney General 

for the State of Illinois, Tom Miller, Attorney General, Office

USCA Case #15-5018 Document #1569088 Filed: 08/21/2015 Page 1 of 24
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of the Attorney General for the State of Iowa, Brian E. Frosh, 

Attorney General, Office of the Attorney General for the State 

of Maryland, Maura Healey, Attorney General, Office of the 

Attorney General for the Commonwealth of Massachusetts, 

Lori Swanson, Attorney General, Office of the Attorney 

General for the State of Minnesota, and Hector H. Balderas, 

Attorney General, Office of the Attorney General for the State 

of New Mexico, were on the brief for amici curiae States of 

New York, et al. in support of appellants.

Kate Andrias was on the brief for amici curiae

Paraprofessional Healthcare Institute and 26 Consumer and 

Policy Organizations in support of appellants.

Arthur B. Spitzer was on the brief for amici curiae

Women=s Rights, Civil Rights, and Human Rights 

organizations and scholars in support of appellants.

Judith A. Scott, Nicole G. Berner, Renee M. Gerni, Craig 

Becker, Lynn Rhinehart, William Lurye, and Claire Prestel

were on the brief for amici curiae American Federation of 

Labor and Congress of Industrial Organizations, et al. in 

support of appellants.

Jonathan S. Massey was on the brief for amici curiae

Members of Congress in support of appellants.

Daniel B. Kohrman was on the brief for amicus curiae

AARP in support of appellants.

Samuel R. Bagenstos was on the brief for amicus curiae

the American Association of People with Disabilities in 

support of appellants.

USCA Case #15-5018 Document #1569088 Filed: 08/21/2015 Page 2 of 24
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Maurice Baskin argued the cause for appellees. With 

him on the brief was William A. Dombi.

Derek Schmidt, Attorney General, Office of the Attorney 

General for the State of Kansas, Jeffrey A. Chanay, Chief 

Deputy Attorney General, Toby Crouse, Special Assistant 

Attorney General, Mark Brnovich, Attorney General, Office 

of the Attorney General for the State of Arizona, Samuel S. 

Olens, Attorney General, Office of the Attorney General for 

the State of Georgia, Bill Schuette, Attorney General, Office 

of the Attorney General for the State of Michigan, Adam Paul 

Laxalt, Attorney General, Office of the Attorney General for 

the State of Nevada, Wayne Stenehjem, Attorney General, 

Office of the Attorney General for the State of North Dakota, 

Herbert H. Slatery, III, Attorney General, Office of the 

Attorney General for the State of Tennessee, Ken Paxton, 

Attorney General, Office of the Attorney General for the State 

of Texas, and Brad D. Schimel, Attorney General, Office of 

the Attorney General for the State of Wisconsin were on the 

brief for amici curiae States of Kansas, et al. 

Stephanie Woodward was on the brief for amici curiae 

ADAPT and the National Council On Independent Living in 

support of appellees.

Michael Billok was on the brief for amicus curiae the 

Consumer Directed Personal Assistance Association of New 

York in support of appellees.

Michaelle L. Baumert and Henry L. Wiedrich were on the 

brief for amici curiae Members of Congress in support of 

appellees. 

Before: GRIFFITH, SRINIVASAN and PILLARD, Circuit 

Judges.

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Opinion for the Court filed by Circuit Judge SRINIVASAN.

SRINIVASAN, Circuit Judge: The Fair Labor Standards 

Act’s protections include the guarantees of a minimum wage 

and overtime pay. The statute, though, has long exempted 

certain categories of “domestic service” workers (workers 

providing services in a household) from one or both of those 

protections. The exemptions include one for persons who 

provide “companionship services” and another for persons 

who live in the home where they work. This case concerns 

the scope of the exemptions for domestic-service workers 

providing either companionship services or live-in care for the 

elderly, ill, or disabled. In particular, are those exemptions 

from the Act’s protections limited to persons hired directly by 

home care recipients and their families? Or do they also 

encompass employees of third-party agencies who are 

assigned to provide care in a home?

Until recently, the Department of Labor interpreted the

statutory exemptions for companionship services and live-in 

workers to include employees of third-party providers. The 

Department instituted that interpretation at a time when the 

provision of professional care primarily took place outside the 

home in institutions such as hospitals and nursing homes. 

Individuals who provided services within the home, on the 

other hand, largely played the role of an “elder sitter,” giving

basic help with daily functions as an on-site attendant.

Since the time the Department initially adopted that 

approach, the provision of residential care has undergone a 

marked transformation. The growing demand for long-term 

home care services and the rising cost of traditional 

institutional care have fundamentally changed the nature of 

the home care industry. Individuals with significant care 

needs increasingly receive services in their homes rather than 

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in institutional settings. And correspondingly, residential care

increasingly is provided by professionals employed by thirdparty agencies rather than by workers hired directly by care 

recipients and their families. 

In response to those developments, the Department 

recently adopted regulations reversing its position on whether 

the FLSA’s companionship-services and live-in worker 

exemptions should reach employees of third-party agencies

who are assigned to provide care in a home. The new 

regulations remove those employees from the exemptions and 

bring them within the Act’s minimum-wage and overtime 

protections. The regulations thus give those employees the 

same FLSA protections afforded to their counterparts who 

provide largely the same services in an institutional setting.

Appellees, three associations of home care agencies, 

challenged the Department’s extension of the FLSA’s 

minimum-wage and overtime provisions to employees of 

third-party agencies who provide companionship services and

live-in care within a home. The district court invalidated the 

Department’s new regulations, concluding that they 

contravene the terms of the FLSA exemptions. We disagree. 

The Supreme Court’s decision in Long Island Care at Home, 

Ltd. v. Coke, 551 U.S. 158 (2007), confirms that the Act vests 

the Department with discretion to apply (or not to apply) the 

companionship-services and live-in exemptions to employees 

of third-party agencies. The Department’s decision to extend

the FLSA’s protections to those employees is grounded in a 

reasonable interpretation of the statute and is neither arbitrary 

nor capricious. We therefore reverse the district court and 

remand for the grant of summary judgment to the Department.

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I.

The FLSA, 29 U.S.C. §§ 201 et seq., generally requires 

covered employers to pay a minimum wage, and also requires 

payment of overtime compensation at an hourly rate equaling 

150% of normal pay for weekly work hours beyond forty. 29 

U.S.C. §§ 206(a), 207(a)(1). The Fair Labor Standards 

Amendments of 1974, Pub. L. No. 93-259, 88 Stat. 55, 

extended the Act’s minimum-wage and overtime protections

to employees in “domestic service,” i.e., service in a 

household. 29 U.S.C. §§ 206(f), 207(l). The congressional 

committee reports accompanying the 1974 Amendments 

explained that domestic service “includes services performed 

by persons employed as cooks, butlers, valets, maids, 

housekeepers, governesses, janitors, laundresses, caretakers, 

handymen, gardeners, footmen, grooms, and chauffeurs of 

automobiles for family use.” S. Rep. No. 93-690, at 20 

(1974); H.R. Rep. No. 93-913, at 35-36 (1974).

The 1974 Amendments also exempted defined categories 

of domestic-service workers from certain FLSA protections. 

This case concerns two of those exemptions. First, 29 

U.S.C.§ 213(a)(15), pertaining to companionship services, 

provides that the FLSA’s minimum-wage and overtime

requirements shall not apply with respect to “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 defined and delimited by regulations of the Secretary).” 

Second, 29 U.S.C. § 213(b)(21), pertaining to live-in 

domestic-service workers, provides that the Act’s overtime

protections shall not apply with respect to “any employee who 

is employed in domestic service in a household and who 

resides in such household.” The 1974 Amendments included 

a broad grant of rulemaking authority empowering the 

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Secretary of Labor to “prescribe necessary rules, regulations, 

and orders with regard to the amendments made by this Act.” 

1974 Amendments, Pub. L. No. 93-259, § 29(b), 88 Stat. 76.

In 1975, the Department of Labor adopted implementing 

regulations. Those regulations addressed the treatment of 

companionship-services workers and live-in domestic-service 

workers who are employed by third-party agencies. The

regulations provided that the § 213(a)(15) exemption for 

companionship services and the § 213(b)(21) exemption for 

live-in workers included individuals “who [were] employed 

by an employer other than the family or household using their 

services.” 29 C.F.R. § 552.109(a), (c) (2014). The

regulations also defined the term “companionship services” to 

mean “those services which provide fellowship, care, and 

protection for a person who, because of advanced age or 

physical or mental infirmity, cannot care for his or her own 

needs.” 29 C.F.R. § 552.6 (2014). Additionally, “[s]uch 

services may include household work related to the care of the 

aged or infirm person such as meal preparation, bed making, 

washing of clothes, and other similar services.” Id.

Subsequently, in 1993, 1995, and 2001, the Department, 

citing dramatic changes in the provision of home care 

services, proposed regulatory amendments to remove thirdparty-agency employees from the scope of the 

companionship-services and live-in worker exemptions. See

Application of the Fair Labor Standards Act to Domestic 

Service, 66 Fed. Reg. 5481 (Jan. 19, 2001); Application of the 

Fair Labor Standards Act to Domestic Service, 60 Fed. Reg. 

46,797 (Sept. 8, 1995); Application of the Fair Labor 

Standards Act to Domestic Service, 58 Fed. Reg. 69,310 

(Dec. 30, 1993). In 2001, for example, the Department

explained that “workers who today provide in-home care to 

individuals needing assistance with activities of daily living 

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are performing types of duties and working in situations that 

were not envisioned when the companionship-services 

regulations were promulgated.” 66 Fed. Reg. at 5482. None 

of those proposals to alter the regulatory treatment of thirdparty-agency employees gained final adoption. 

In 2002, the companionship-services portion of the thirdparty-employer regulation became the subject of a legal 

challenge brought by an employee of a third-party agency 

who sought overtime and minimum-wage protections. 

Ultimately, the Supreme Court rejected her challenge, 

upholding the regulation’s inclusion of third-party-employed 

workers within the Act’s companionship-services exemption. 

Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158 (2007). 

The employee argued that the framework of Chevron, U.S.A.,

Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 

(1984), should not apply, and that, if it did, the statutory 

exemption unambiguously applied only to workers employed 

directly by private households, thus rendering the third-party 

regulation invalid. The Court disagreed. It held that the “the 

text of the FLSA does not expressly answer the third-partyemployment question”; that Congress had granted authority to 

the Department to resolve the issue; and that the Department’s 

answer—i.e., its regulation including employees who work 

for third-party agencies within the companionship-services 

exemption—was reasonable. Coke, 551 U.S. at 168, 171.

In 2013, the Department again considered reversing

course on the third-party-employer issue, this time adopting a 

final regulation doing so. “In the 1970s,” the Department 

observed, “many individuals with significant care needs were 

served in institutional settings rather than in their homes.” 

Application of the Fair Labor Standards Act to Domestic 

Service, 78 Fed. Reg. 60,454, 60,455 (Oct. 1, 2013). But 

“[s]ince that time, there has been a growing demand for longUSCA Case #15-5018 Document #1569088 Filed: 08/21/2015 Page 8 of 24
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term home care.” Id. “As more individuals receive services 

at home rather than in nursing homes and other institutions, 

workers who provide home care services . . . perform 

increasingly skilled duties” analogous to the professional 

services performed in institutions. Id. The Department 

concluded that, “given the changes to the home care industry 

and workforce” since the original 1975 regulations, the new 

regulation would “better reflect Congressional intent” behind 

the 1974 Amendments. Id. at 60,454. As authority for the 

new regulation, the Department cited, in addition to the 

statutory exemptions themselves, the general grant of 

rulemaking authority in § 29(b) of the 1974 Amendments. Id.

at 60,557.

Under the new regulation, third-party employers of 

companionship-services and live-in employees may no longer

“avail themselves” of the statutory exemptions. With respect 

to companionship services, the revised regulation states that 

“[t]hird party employers of employees engaged in 

companionship services . . . may not avail themselves of the 

minimum wage and overtime exemption provided by section 

[2]13(a)(15).” 29 C.F.R. § 552.109(a) (2015). With respect 

to live-in workers, the revised regulation states that “[t]hird 

party employers of employees engaged in live-in domestic 

service employment . . . may not avail themselves of the 

overtime exemption provided by section [2]13(b)(21).” Id.

§ 552.109(c). The new rules also narrow the Department’s 

definition of “companionship services,” which has the effect 

of limiting the scope of the Act’s companionship-services 

exemption. Among other adjustments, the regulation now 

states that “[t]he term companionship services . . . includes 

the provision of care”—such as “meal preparation, driving, 

light housework, managing finances, assistance with the 

physical taking of medications, and arranging medical 

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care”—only if that care “does not exceed 20 percent of the 

total hours worked.” Id. § 552.6(b) (2015). 

In 2014, appellees, a group of trade associations 

representing third-party agencies that employ home care 

workers, filed a lawsuit challenging the regulations under the 

Administrative Procedure Act. In December 2014, shortly 

before the new regulations were to take effect, the district 

court granted partial summary judgment to appellees, 

declaring invalid the revised third-party-employer regulation. 

Home Care Ass’n of Am. v. Weil, No. 14-cv-967 (RJL), 2014 

WL 7272406 (D.D.C. Dec. 22, 2014). The court ended its 

analysis at Chevron step one, finding that the Department’s 

decision to exclude a class of employees from the exemptions 

based on the “nature of their employer[s]” contravened the 

plain terms of the statute. Id. at *5-6. In light of the district 

court’s vacatur of the third-party-employer regulation, 

appellees could make use of the companionship-services 

exemption, and they therefore gained standing to attack the 

Department’s revised definition of companionship services. 

In a separate opinion, the district court vacated that definition, 

finding that its twenty-percent limitation on hours of “care”

contravened both the text of the statutory exemption and

congressional intent. Home Care Ass’n of Am. v. Weil, No.

14-cv-967 (RJL), 2015 WL 181712, at *4-5 & n.5 (D.D.C. 

Jan. 14, 2015). The Department now appeals.

II.

We review the new third-party-employer regulation

pursuant to the two-step Chevron framework. See Util. Air 

Regulatory Grp. v. EPA, 134 S. Ct. 2427, 2439 (2014). If 

“Congress has directly spoken to the precise question at 

issue,” then “the court, as well as the agency, must give effect 

to the unambiguously expressed intent of Congress.” 

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Chevron, 467 U.S. at 842-43. But “if the statute is silent or 

ambiguous with respect to the specific issue,” we analyze 

“whether the agency’s answer is based on a permissible 

construction of the statute.” Id. at 843. 

The Department contends that its revised third-partyemployer regulation lies within the scope of its rulemaking 

authority under the general agency delegation in § 29(b) of 

the 1974 Amendments, as confirmed by the Supreme Court’s 

decision in Coke. The Department further argues that the new 

regulation is a reasonable exercise of the Department’s 

authority at Chevron step two and is neither arbitrary nor 

capricious. We agree with the Department and uphold the 

regulation.

A.

Appellees contend that the new third-party-employer 

regulation fails at the first step of Chevron. In their view, the 

FLSA does not delegate to the Department the authority to

exclude a class of employers from the Act’s companionshipservices and live-in worker exemptions. That argument is 

foreclosed by the Supreme Court’s decision in Coke.

The Court in Coke confronted three distinct statutory 

arguments about the applicability of the companionshipservices exemption to employees of third-party providers. 

First, respondent Coke, the employee, urged that the 1974 

Amendments “clearly express[] congressional intent to 

exempt only companions employed directly by private 

households,” not companions employed by third-party 

agencies. Brief for Respondent at 5, Long Island Care at 

Home, Ltd. v. Coke, 551 U.S. 158 (2007) (No. 06-593), 2007 

WL 930417, at *5 (capitalization altered). Second, various 

amici, including the appellees here, made the opposite 

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argument—viz., that the “unambiguous language” of the 

companionship-services exemption requires applying it to 

employees of third-party providers. Brief for National 

Association for Home Care & Hospice, Inc. as Amicus Curiae 

in Support of Petitioners at 3, Long Island Care at Home, Ltd. 

v. Coke, 551 U.S. 158 (2007) (No. 06-593), 2007 WL 527341, 

at *3. Finally, the petitioner home care agency, supported by 

the United States, put forward an intermediate position. In 

their view, the text of the statutory exemption “does not 

address third-party employment,” leaving the agency 

discretion to resolve the matter at Chevron step two. Brief for 

United States as Amicus Curiae Supporting Petitioners at 8, 

17-18, Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158 

(2007) (No. 06-593), 2007 WL 579234, at *8, *17-18; see 

Brief for Petitioners at 10-12, Long Island Care at Home, Ltd. 

v. Coke, 551 U.S. 158 (2007) (No. 06-593), 2007 WL 549107, 

at *10-12. 

The Supreme Court rejected the competing arguments 

that the statutory text unambiguously compels a result in 

either direction. The Court held that “the text of the FLSA 

does not expressly answer the third-party-employment 

question” and that there is also no “clear answer in the 

statute’s legislative history.” Coke, 551 U.S. at 168. Instead, 

the question of “whether to include workers paid by thirdparties within the scope of the [exemption’s] definitions” is 

among the “details” that the statute leaves to the “agency to 

work out.” Id. at 167. In support of that conclusion, the 

Court referenced the Secretary of Labor’s general authority 

“to prescribe necessary rules, regulations, and orders with 

regard to the amendments made by the Act.” 1974 

Amendments, Pub. L. No. 93-259, § 29(b), 88 Stat. at 76; see 

Coke, 551 U.S. at 165 (citing § 29(b)). Because that grant of 

authority “provides the Department with the power to fill . . . 

gaps through rules and regulations,” and because the “subject 

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matter of the regulation in question concerns a matter in 

respect to which the agency is expert,” the treatment of thirdparty employers under the exemption, the Court concluded,

had been “entrusted [to] the agency.” Coke, 551 U.S. at 165.

The Court’s conclusion precludes appellees’ Chevron 

step-one argument. It is true that Coke addressed a challenge

solely to the companionship-services portion of the prior

regulation, while this case also encompasses a challenge to 

the live-in worker provision of the revised regulation. But the 

Coke Court’s characterization of third-party-employer 

treatment as an “interstitial matter . . . entrusted [to] the 

agency to work out” equally applies to the Department’s

authority under the FLSA’s live-in worker exemption. 

Indeed, Congress framed the companionship-services and 

live-in worker exemptions with precisely parallel construction 

and phrasing. Section 213(a)(15) exempts from the FLSA’s 

minimum-wage and maximum-hour requirements “any 

employee employed in domestic service employment to 

provide companionship services for individuals who . . . are 

unable to care for themselves.” 29 U.S.C. § 213(a)(15)

(emphasis added). And § 213(b)(21) symmetrically exempts 

from the Act’s maximum-hour requirements “any employee 

who is employed in domestic service in a household and who 

resides in such household.” 29 U.S.C. § 213(b)(21)

(emphasis added). Both provisions invite further 

specification, the details of which “turn upon the kind of 

thorough knowledge of the subject matter and ability to 

consult at length with affected parties that an agency, such as 

the DOL, possesses.” Coke, 551 U.S. at 165, 167-68.

Appellees also stress that the companionship-services 

exemption provides for the Secretary to “define[] and 

delimit[]” its terms, while the live-in worker exemption

contains no similar supplement. Compare 29 U.S.C.

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§ 213(a)(15), with id. § 213(b)(21). The Supreme Court in 

Coke, however, did not focus on the “define[] and delimit[]” 

language in § 213(a)(15). Rather, in holding that the 

Department had authority to “fill [the third-partyemployment] gap[] through rules and regulations,” the Court 

relied on § 29(b)’s general grant of authority to establish rules 

implementing the 1974 Amendments. Coke, 551 U.S. at 165. 

The Court invoked the precise terms of § 29(b)’s general 

grant of implementation authority—the authority “to prescribe 

necessary rules, regulations, and orders with regard to the 

amendments made by this Act”—in the portion of its opinion 

holding that the third-party-employment question had been

delegated to the Secretary. Id. And although the Court also 

cited 29 U.S.C. § 213(a)(15) as a source of agency authority 

alongside § 29(b), the “define[] and delimit[]” language, 

unlike the language of § 29(b), was neither reproduced nor 

highlighted. See Coke, 551 U.S. at 165. Because § 29(b)

“gives an agency broad power to enforce all provisions” of 

the 1974 Amendments—including both § 213(a)(15) and 

§ 213(b)(21)—the Department’s “authority is clear” with 

respect to both FLSA exemptions. Gonzales v. Oregon, 546 

U.S. 243, 258 (2006) (emphasis added) (citing Nat’l Cable & 

Telecomm. Ass’n v. Brand X Internet Servs., 545 U.S. 967, 

980 (2005)).

Appellees get no further in arguing that, even if the 

regulation upheld in Coke amounted to a valid exercise of the 

Department’s authority to “define” the terms of the 

companionship-services exemption, the revised regulation 

does not. Appellees posit that, while the Secretary may define

terms within the phrase “employee employed in domestic 

service employment to provide companionship services,” the 

Department exceeded its authority when, instead of 

“defining” that phrase, it issued a rule providing that thirdparty employers “may not avail themselves” of the 

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exemption. 29 C.F.R. § 552.109(a). That argument fails for 

the reason already given: The Department’s authority does 

not flow solely from the “define[] and delimit[]” language of 

§ 213(a)(15), but instead, as the Coke Court emphasized, 

comes from the general grant provided by § 29(b) to “work 

out” the statutory “gaps” through rules and regulations. Coke, 

551 U.S. at 165. 

Indeed, in finding it within the Department’s “broad

grant” of authority to decide “whether to include workers paid 

by third parties within the scope” of the companionshipservices exemption, the Court explicitly contemplated that the 

full range of potential outcomes lay within the agency’s 

discretion. Id. at 167-68. “Should the FLSA cover all

companionship workers paid by third parties?,” the Court

asked. Id. at 167. Or should it instead “cover some such 

companionship workers . . . ? Should it cover none?” Id. All 

of those possibilities, the Court made clear, were the 

Department’s to assess. Id. 

Appellees’ remaining step-one arguments are unavailing. 

Appellees contend that the Department’s new rules conflict

with the legislative history of the FLSA amendments. But the 

Coke Court explicitly found that the “statute’s legislative 

history” provides no “clear answer” to the “third-partyemployment question.” Coke, 551 U.S. at 168. And while 

appellees seek to attach significance to Congress’s 

amendment of other subsections of § 213 in 1996 and 1999 

without altering either § 213(a)(15) or § 213(b)(21), the Coke

Court, having been advised about that congressional inaction, 

see Brief for the United States as Amicus Curiae at 20 n.5, 

Coke, 551 U.S. 158 (No. 06-593), apparently found it 

immaterial to the Chevron step one inquiry. Appellees 

similarly argue that Congress’s more recent inaction in the 

face of proposed legislation to exclude third-party employers

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from the statutory exemptions shows congressional intent to 

allow employers to continue making use of the exemptions. 

But “failed legislative proposals are a particularly dangerous 

ground on which to rest an interpretation of a prior statute.” 

Cent. Bank of Denver, N.A. v. First Interstate Bank of Denver, 

N.A., 511 U.S. 164, 187 (1994) (internal quotation marks

omitted). And here, Congress’s failure to enact legislation 

does nothing to upset Coke’s holding that “the text of the 

FLSA does not expressly answer the third-party-employment 

question.” 551 U.S. at 168.

For those reasons, we reject appellees’ challenge to the

regulations at Chevron step one. The Department has the 

authority to “work out the details” of the companionshipservices and live-in worker exemptions, and the treatment of 

third-party-employed workers is one such detail. Id. at 165-

68.

B.

Because we conclude that Congress delegated authority 

to the Department to determine whether employees of thirdparty agencies should fall within the scope of the 

companionship-services and live-in worker exemptions, we 

proceed to Chevron step two. At that step, “‘if the 

implementing agency’s construction is reasonable,’ a court 

must ‘accept the agency’s construction of the statute.’” Fin. 

Planning Ass’n v. SEC, 482 F.3d 481, 498 (D.C. Cir. 2007)

(quoting Brand X, 545 U.S. at 980). The Department’s 

interpretation readily satisfies that standard.

Appellees’ Chevron step-two argument largely rehashes

their step-one submission. Their primary contention is that 

“the total exclusion of third party employers from availing 

themselves of access to the companionship and live-in 

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exemptions cannot be a permissible construction of the Act.” 

Appellees’ Br. 39-40. Coke belies that argument. As the 

Court explained, “the text of the FLSA does not expressly 

answer the third-party-employment question,” leaving it to the 

Department to determine whether the FLSA should apply to 

“all,” “some,” or “none” of the home care workers paid by 

third parties. Coke, 551 U.S. at 167-68.

The Department’s resolution of that question is entirely

reasonable. The Department explained that bringing

domestic-service workers paid by third-party employers 

within the FLSA’s protections would be consistent with 

congressional intent. The 1974 Amendments “intended to 

expand the coverage of the FLSA to include all employees 

whose vocation was domestic service,” the Department 

observed, 78 Fed. Reg. at 60,454, not to “roll back coverage 

for employees of third parties who already had FLSA 

protections,” id. at 60,481. Because Congress’s overriding 

intent was to bring more workers within the FLSA’s 

protections, the Department determined that the 

companionship-services and live-in exemptions from 

coverage should “be defined narrowly in the regulations to 

achieve the law’s purpose.” Id. at 60,482. In the 

Department’s view, a narrow construction of the statutory 

exemptions draws further support from “the general principle 

that coverage under the FLSA is broadly construed so as to 

give effect to its remedial purposes, and exemptions are 

narrowly interpreted . . . to those who clearly are within the 

terms and spirit of the exemption.” Id. (citing A.H. Phillips, 

Inc. v. Walling, 324 U.S. 490, 493 (1945)). The Department 

thus decided to interpret the exemptions as “narrow” ones that

target individuals who are “not regular breadwinners or 

responsible for their families’ support.” Id. at 60,481 (citing 

H. Rep. No. 93-913, p. 36).

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The Department’s understanding is consistent with 

Congress’s evident intention to “include within the coverage 

of the Act all employees whose vocation is domestic service.” 

S. Rep. No. 93-690, at 20 (emphasis added); see H.R. Rep. 

No. 93-913, at 33-34, 36 (similar). Both the 1974 Senate and 

House Reports, in explaining the purpose behind the 

companionship exemption and another exemption covering 

“casual babysitting services,” drew a contrast between 

“casual” employees and employees whose “vocation is 

domestic service.” S. Rep. No. 93-690, at 20; H.R. Rep. No. 

93-913, at 33-34, 36. And one Senator, when commenting on 

the expansion of the FLSA to cover domestic-service 

employees, contrasted the type of assistance provided by a 

“neighbor” or an “elder sitter” with “the professional 

domestic who does this as a daily living.” 119 Cong. Rec. 

24,801 (July 19, 1973) (statement of Sen. Burdick). It is true 

that the Department points to no legislative materials

concerning the live-in exemption in particular. But it was 

reasonable for the Department to assume that Congress 

intended the live-in exemption to operate in much the same 

way as the similarly worded companionship exemption—i.e., 

to exclude from the FLSA’s scope casual employees who are 

“not regular bread-winners or responsible for their families’ 

support.” 78 Fed. Reg. at 60,481 (citing S. Rep. No. 93-690, 

p. 20; H.R. Rep. No. 93-913, p. 36).

Based on its understanding of congressional intent, the 

Department reasoned that the 1974 Congress would have 

wanted the FLSA’s protections to extend to the home care 

workers of today who are employed by third-party agencies. 

“[T]oday, few direct care workers are the ‘elder sitters’ 

envisioned by Congress when enacting the exemption,” the 

Department observed. 78 Fed. Reg. at 60,482. Instead, home

care workers employed by third parties are professional

caregivers, often with training or certification, who work for 

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agencies that profit from the employees’ services. See id. at 

60,455; National Employment Law Project, Comments to 

Proposed Revisions to the Companionship Exemption 

Regulations, RIN 1235-AA05 14-15 (Mar. 21, 2012), 

reprinted in J.A. at 593-94. In light of the “purpose and 

objectives of the [1974] amendments as a whole,” 78 Fed. 

Reg. at 60,482, the Department decided “to prohibit third 

party employers from claiming [the companionship and livein] exemptions,” id. at 60,480. The Department thereby 

applied the FLSA’s protections to workers for whom such 

employment is a “vocation.” S. Rep. No. 93-690, at 20. We 

find the Department’s resolution to be fully reasonable and

see no basis for setting it aside at Chevron step two.

C.

Appellees contend that, even if the new third-party

regulation passes muster at Chevron step two, it should still 

be invalidated as arbitrary and capricious. See 5 U.S.C. 

§ 706(2)(A). According to appellees, the Department “failed 

to provide an adequate justification for reversing four decades 

of policy interpreting the Act.” Appellees’ Br. 40. The 

Department needed to satisfy a “higher burden,” appellees 

submit, because the new regulation departed from prior rules 

and policies. Id. 

Contrary to appellees’ suggestion, there is no requirement 

that the agency’s change in policy clear any “heightened 

standard.” FCC v. Fox Television Stations, Inc., 556 U.S. 

502, 514 (2009). Instead, we ask whether actions that are a 

departure from prior agency practice, like other agency 

actions, rest on a “reasoned explanation.” Id. at 515. A 

“reasoned explanation,” in the event of an alteration in 

approach, “would ordinarily demand that [the agency] display 

awareness that it is changing position,” and “of course the 

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agency must show that there are good reasons for the new 

policy.” Id. But beyond that, the APA imposes no special 

burden when an agency elects to change course.

The Department’s explanation for its updated rule meets 

those standards. In addition to reasoning that its original 

regulation misapplied congressional intent, the Department 

justified its shift in policy based on the “dramatic 

transformation of the home care industry since [the thirdparty-employer] regulation was first promulgated in 1975.” 

78 Fed. Reg. at 60,481. When Congress enacted the 1974 

Amendments, the “vast majority of the private household 

workers were employed directly by a member of the 

household.” Report to the Ninety-Third Congress by the 

Secretary of Labor: Minimum Wage and Maximum Hours 

Standards Under the Fair Labor Standards Act 28 (Jan. 19, 

1973). By the time the Supreme Court decided Coke in 2007, 

the vast majority of home care workers were instead

employed by third-party agencies. See Brief of the Alliance 

or Retired Americans, et al. as Amici Curiae in Support of 

Respondent at 6, Long Island Care at Home, Ltd. v. Coke, 551 

U.S. 158 (2007) (No. 06-593), 2007 WL 951137, at *6. 

The duties of typical home care workers also changed. In 

the 1970s, many individuals with significant needs received 

care in institutional settings rather than in their homes. See 78 

Fed. Reg. at 60,455. Since that time, there has been an 

increased emphasis on the value of providing care in the home

and a corresponding shift away from institutional care. As the 

Department recognized even by 2001, “[d]ue to significant 

changes in the home care industry over the last 25 years, 

workers who today provide in-home care to individuals 

needing assistance with activities of daily living are 

performing types of duties and working in situations that were 

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not envisioned when the companionship-services regulations 

were promulgated.” 66 Fed. Reg. at 5482. 

In light of the Department’s reasoned explanation for its 

change in policy, we conclude that its departure from past 

practice was neither arbitrary nor capricious.

D.

Appellees see a “strong[] indicat[ion]” in the 

administrative record that removing third-party-employed 

workers from the scope of the exemptions “will make home 

care less affordable and create a perverse incentive for reinstitutionalization of the elderly and disabled.” Appellees’

Br. 44. The Department disagreed with that characterization 

in the final rule, concluding that care recipients would be 

benefitted, not harmed, by the new regulations. See 78 Fed. 

Reg. at 60,459, 60,483. The Department’s conclusion has 

ample support in the record.

When issuing the final rule, the Department 

acknowledged the existence of certain comments claiming 

that the proposed changes would harm home care workers and 

recipients. “[R]aising the cost of service provided through 

home care agencies,” those comments suggested, “would 

incentivize employment through informal channels rather than 

through such agencies.” 78 Fed. Reg. at 60,481. Some 

commenters also argued that expanding FLSA coverage 

would increase institutionalization of the elderly and would 

accelerate workforce turnover due to reduced work hours per 

shift. The Department rejected those contentions based on the 

administrative record.

Fifteen states, the Department explained, already 

“provide minimum wage and overtime protections to all or 

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most third party-employed home care workers” who would 

come within the FLSA’s scope under the Department’s rule. 

Id. at 60,482. Yet commenters raising concerns about the 

rule’s effects “did not point to any reliable data” from those 

states indicating that extension of minimum-wage and 

overtime protection to home care workers had led either to 

increased institutionalization or a decline in continuity of 

care. Id. at 60,483. To the contrary, some commenters noted 

an absence of evidence from those states suggesting any 

decline in access to (or quality of) home care services owing 

to the extension of minimum-wage and overtime protections 

to home care workers. See Addendum to Reply Br. 14, 21. 

The industry’s own survey indicated that home care agencies 

“operating in overtime and non-overtime states already have 

very similar characteristics,” including “a similar percentage 

of consumers receiving 24-hour care.” 78 Fed. Reg. at 

60,503. 

Appellees suggest that, even if the Department’s 

conclusions are defensible with regard to the companionship 

exemption, we should still invalidate its revised approach

with regard to the live-in exemption because only four of 

those fifteen states require payment of overtime to live-in 

domestic-service employees. Appellees’ Br. 46. The 

Department was aware of those differences when making its

decision, however, as it included a table in the final rule 

detailing the nuances of each state’s overtime and minimumwage laws. 78 Fed. Reg. at 60,510-12. Whether focused on 

fifteen states or a subset of four states, the Department’s core 

observation—that commenters could point to no evidence 

indicating that extension of protections to home care workers 

in the relevant states effected an increase in

institutionalization or workforce turnover—remains true.

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The Department instead reasonably credited comments 

suggesting that the new rule would improve the quality of 

home care services. The “rule will bring more workers under 

the FLSA’s protections,” the Department concluded, which 

“will create a more stable workforce by equalizing wage 

protections with other health care workers and reducing 

turnover.” Id. at 60,483. Increased protections will also 

“ensur[e] that the home care industry attracts and retains 

qualified workers,” improving the quality of home care 

services. Id. at 60,548. The Department predicted that the 

revised regulations would benefit consumers “because 

supporting and stabilizing the direct care workforce will result 

in better qualified employees, lower turnover, and a higher 

quality of care.” Id. at 60,459-60. Those sorts of 

“[p]redictive judgements about areas that are within the 

agency’s field of discretion and expertise are entitled to 

particularly deferential review, as long as they are 

reasonable.” BellSouth Telecomm., Inc. v. FCC, 469 F.3d 

1052, 1060 (D.C. Cir. 2006) (internal quotation marks 

omitted). The Department’s judgments are.

III.

In addition to challenging the third-party-employer 

regulation, appellees also challenge 29 C.F.R. § 552.6 (2015), 

the regulation defining the scope of “companionship services” 

encompassed by the Act’s companionship-services 

exemption. Appellees contend that the Department’s revised, 

and more limited, definition of companionship services 

conflicts with the FLSA and is arbitrary and capricious. We 

lack Article III jurisdiction to consider appellees’ challenge. 

In light of our disposition with respect to the third-partyemployer regulation, appellees cannot show that the revised 

definition of companionship services causes their member 

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companies injury in fact. See Friends of the Earth, Inc. v. 

Laidlaw Envtl. Servs., Inc., 528 U.S. 167, 180-81 (2000). 

Appellees conceded before the district court that, until the

court vacated the third-party-employer regulation, their 

members “lacked standing to pursue injunctive relief against 

[the enforcement of 29 C.F.R. § 552.6], because third-party 

employers were not allowed to avail themselves of the 

exemption under any definition of companionship services, 

and [appellees] were therefore not directly harmed by 

[§ 552.6].” Mem. in Supp. of Emergency Mot. for Temporary 

Stay of Agency Action and Req. for Expedited Consideration, 

No. 14-cv-967, Dkt. No. 23-1, at 1-2 (filed Dec. 24, 2014). 

Appellees make no effort in their appellate briefing to revisit 

that understanding. Because we now reverse the district 

court’s vacatur of 29 C.F.R. § 552.109, appellees cannot make 

use of the companionship-services exemption, and their 

members thus suffer no direct injury as a result of the 

Department’s narrowed definition of companionship services. 

We therefore lack jurisdiction to consider appellees’ 

challenge to that definition.

* * * * *

For the foregoing reasons, we reverse the district court’s 

judgments and remand for the entry of summary judgment in 

favor of the Department.

So ordered.

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