F I L E D

United States Court of Appeals

Tenth Circuit

MAY 23 2000

PATRICK FISHER

Clerk

PUBLISH

UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

DEBORAH JOHNSTON, individually

and on behalf of others similarly

situated; DIANA RUSS, individually

and on behalf of all others similarly

situated; BRIDGET A. AMES;

RUSSELL APPLEGATE; LAJOYA A.

BARNES; SHARON BATES; BETTY

J. BAUCOM; HELEN BERRY;

JIMMY BOSTIC; ALETA BRITT;

ANGELINE C. BROOKS;

SHAWNDA L. BROWN; DAWNA

CAMPBELL; EDNA J. CRABTREE;

PRISCILLA CRUME; SANDRA D.

DEVILLE; TINA M. ENGLISH;

LINDA HALL; PAT HARPER;

ROSIE M. JONES; ALYSA L.

KINNELL; THOMAS LAWRENCE,

JR.; QUEEN E. LEWIS; MARIE A.

MAXWELL; PATRICIA R.

MCCARRELL; SEAN MCDANIEL;

CHARLES W. MULANAX; LUGENA

NWAIWA; TERRELL T. PALMER;

LOVERL RAMSEY; YOLANDA

RAMSEY; TRACY RICHARD;

TILEQUA L. SAVAGE; MIRIAM

SERWANGA; PATRICIA L.

STALEY; MICHELLE L. TYMA,

TERI VAUGHT; TERESA VEALES;

ERNEST WALSTON; JERILD A.

WALSTON; KARLA WALSTON;

SANDRA WILKINS; LAKEESA

GIBBONS; RHONDA D. WHEELER;

KELLY J. KAULAY; TRACY

No. 99-5132
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EMERSON; DARREN J. HANNAH,

CHRISTI G. KING-WILLIAMS;

PAMELA J. BERRY; MICHAEL W.

GRAHAM; KIMBERLY JONES, 

 Plaintiffs - Appellees, 

v. 

VOLUNTEERS OF AMERICA, INC.

 Defendant - Appellant.

STATE OF OKLAHOMA,

DEPARTMENT OF HUMAN

SERVICES,

 Amicus Curiae.

Appeal from the United States District Court

for the Northern District of Oklahoma

(D.C. No. 96-CV-1166-K)

JoAnne Deaton (Michael F. Smith of Rhodes, Hieronymus, Jones, Tucker &

Gable, P.L.L.C., Tulsa, Oklahoma; Richard Gann of Riggs Abney Neal Turpen

Orbison & Lewis, Tulsa, Oklahoma with her on the brief), for DefendantAppellant.

Steven R. Hickman of Frasier, Frasier & Hickman, Tulsa, Oklahoma, for

Plaintiffs-Appellees.

Mark Lawton Jones, Assistant Attorney General, State of Oklahoma, Department

of Human Services, Oklahoma City, Oklahoma, filed a brief for Amicus Curiae.
* The Honorable Arthur L. Alarcón, Senior United States Circuit Judge

for the Ninth Circuit, sitting by designation.

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Before BALDOCK , McKAY , and ALARCÓN ,

*

 Circuit Judges.

ALARCÓN , Circuit Judge.

Volunteers of America Oklahoma, Inc. (“the VAO”) appeals from the order

denying its motion for summary judgment seeking dismissal of the claims brought

against it by its employees who work as Habilitation Training Specialists and

Habilitation Training Specialist Managers (“Habilitation employees”) in

residences in the VAO’s supported living program. The Habilitation employees

filed a claim against the VAO seeking payment for working overtime. The VAO

contends that it is exempt from paying not less than one and one-half times the

hourly rate for work performed in excess of 40 hours a week to the Habilitation

employees in the supported living program, pursuant to the domestic services

exemption to the Fair Labor Standards Act, 292 U.S.C. § 213(a)(15). The district

court denied the VAO’s motion for summary judgment. It concluded that the

domestic services exemption does not apply to Habilitation workers assigned to

the supported living program because their services are not performed in private

homes. Following the denial of the VAO’s motion for summary judgment, the

parties stipulated to the amount of overtime wages, costs, and attorneys’ fees to
1 Section 207(a)(1) provides as follows:

Except as otherwise provided in this section, no

employer shall employ any of his employees who in any

workweek is engaged in commerce or in the production

of goods for commerce, or is employed in an enterprise

engaged in commerce or in the production of goods for

commerce, for a workweek longer than forty hours

unless such employee receives compensation for his

employment in excess of the hours above specified at a

rate not less than one and one-half times the regular rate

at which he is employed.

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which the Habilitation employees would be entitled if the exemption did not

apply. Thereupon, the district court entered its final judgment. We have

jurisdiction pursuant to 28 U.S.C § 1291. Because we conclude that the record

shows that the Habilitation employees were not employed in private homes, we

affirm the denial of the VAO’s motion for summary judgment.

I

The Fair Labor Standards Act (“FLSA”) requires employers to pay their

employees not less than one and one-half times the hourly rate for all hours

worked over forty in a workweek. See 29 U.S.C. § 207(a)(1). 1 The FLSA

exempts employers from the maximum hour 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 defined and delimited by regulations of the Secretary).” 
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29 U.S.C. § 213(a)(15). 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.” 

29 C.F.R. § 552.3.

We must decide whether the Habilitation employees in the supported living

program perform services in or about the private home of a developmentally

disabled person “by whom he or she is employed.” The Habilitation employees

contend that they are entitled to overtime pay because they are employees of the

VAO and not the employees of the individuals who are unable to care for

themselves. They argue that 29 C.F.R. § 552.3 limits the exemption to services

performed in the private home of the individual who employs a Habilitation

employee. The Secretary of Labor’s regulations clearly provide, however, that

domestic service employees “who are employed by an employer other than the

family or household using their services” may also be exempt from the FLSA. 29

C.F.R. § 552.109(a). The Habilitation employees assert that “any reliance upon

29 C.F.R. § 552.109, an interpretation which does not have the effect of law, is

misplaced.”

We quite agree that we are not bound by an agency’s interpretation of a

statute that is unreasonable. In § 213(a)(15), Congress expressly left it to the

Secretary of Labor to define and delimit the terms in the statute by regulation. 
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The Supreme Court has instructed that courts must defer to a federal agency’s

interpretation of a statute unless the regulation is “arbitrary, capricious, or

manifestly contrary to the statute.” Chevron U.S.A. Inc. v. Natural Resources

Defense Council, Inc. , 467 U.S. 837, 843-44 (1984). The contention that the

exception does not apply to domestic services employees who are not employed

directly by an individual in need of care, or his or her family has been rejected by

the courts that have been confronted with the same question. See Terwilliger v.

Home of Hope, Inc ., 21 F. Supp. 2d 1294, 1299 n.2 (N.D. Okla. 1998) (rejecting,

as inconsistent with 29 C.F.R. § 552.109(a), the plaintiffs’ argument that the

private home exception did not apply because they were employed by the agency

and not the individual clients); Madison v. Resources for Human Development,

Inc. , 39 F. Supp. 2d 542, 545 n.3 (E.D. Pa. 1999) (holding that pursuant to 29

C.F.R. § 552.109, “[a]lthough the plaintiffs are employed by RHD rather than the

individuals they serve, that by itself does not exclude them from the exemption.”). 

We are persuaded that the secretary’s interpretation is not arbitrary, capricious, or

manifestly contrary to § 213(a)(15). We hold that the fact that domestic service

employees are not employed by the individual receiving care, does not alone

exclude them from the exemption.

II

The VAO contends that the plaintiffs are not entitled to overtime payments
2 The parties do not dispute the fact that the Habilitation employers in

the supported living program perform domestic/companionship services.

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because the Habilitation employees perform domestic/companionship services in

the private homes of its clients in the supported living program. 2

 We review the

denial of a motion for summary judgment de novo. See Bennett v. Coors Brewing

Co., 189 F.3d 1221, 1227 (10th Cir. 1999). We must determine whether there was

any genuine issue as to any material fact, and, if not, whether the district court

correctly applied the law to the facts construed in the light most favorable to the

party opposing summary judgment. See id. 

We must construe the domestic services exemption narrowly, “in light of

the FLSA’s broad remedial aims.” Ackerman v. Coca-Cola Enters., Inc. , 179 F.3d

1260, 1264 (10th Cir. 1999). The VAO bears the burden of proving that its

employees fit “plainly and unmistakenly within the [exemption’s] terms.” Id.

(internal quotations and citations omitted). In construing the exemption narrowly

we are required to give deference to the regulations promulgated by the

Department of Labor. See id.

The VAO provides assisted living domestic services to developmentally

disabled persons through two different programs. In the in-home program, the

VAO’s Habilitation employees perform services in the family home where the

developmentally disabled person resides with his or her parents or other family
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member. The family member in the in-home program makes all the household

management decisions such as the purchase of groceries, the arrangement of

furniture, and the payment of rent and utilities. The VAO does not occupy rooms

in the clients’ family home for use as an office. If the VAO’s services are

terminated, the client remains in the family home.

In the supported living program, the client does not reside with a family

member. The VAO typically selects a residence for the developmentally disabled

person, and sets up shared living arrangements with other developmentally

disabled persons. Up to three clients reside in the residences in the VAO

supported living program. The VAO signs the lease, and typically pays the rent

from the clients’ trust accounts. In the supported living program, only the clients

of the VAO may live together. The VAO usually selects the clients who will

share the same residence, although the client has the right to request a change of

roommate. If one of the clients terminates the VAO’s services and chooses a

different service provider than his roommate, one of them must leave the

residence.

The Habilitation employees manage the residences in the supported living

program. They buy the food, control access to it, and prepare the meals. The

VAO also controls access to the residences in the supported living program. If

the residence contains only one VAO client, and if the client or his guardian
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terminate the VAO’s services, the client may remain in the residence pursuant to

the terms of the lease or rental agreement. In these residences, the Habilitation

employees may occupy a room in the residence to serve as an office and to house

desks and file cabinets. The Habilitation employees who provide services in the

supported living program also exercise control over their clients’ daily activities.

III

No circuit court has interpreted the meaning of the term “private home” as

used in 29 C.F.R. § 552.3. Several district courts, however, have addressed this

question. In Lott v. Rigby, 746 F. Supp. 1084 (N.D. Ga. 1990), the court ruled

that the plaintiffs, who were employed as house parents at the Stephens County

Independent Group Residence for the Mentally Retarded, were not employed in a

private home. Id. at 1085, 1088. The court relied on a 1975 administrative

opinion which stated that the exemption would not apply to employees providing

care to institutionalized persons, even if the services were provided in a

residential home setting. See id. at 1087 (citing Wage and Hour Opinion WH368, 91 W.H.M. 1031 (Nov. 25, 1975)). The court also noted that a private home

is a fixed abode of the individual or family and that it is a separate and distinct

dwelling maintained by the individual or family. See id. (citing H.R. Rep. No.

913, 93rd Cong., 2nd Sess., reprinted in, 1974 U.S. Code Cong. & Admin. News

2811, 2845). The court concluded that the fact that the home was the clients’ sole
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residence was not enough to make it a private home. See id. The court also

determined that although the clients participated in the upkeep of the house as

part of their learning process, they certainly did not maintain the home. See id.

The next court to reach this issue ruled that the exemption did not apply to

plaintiffs who were Habilitation Training Specialists. See Linn v. Developmental

Servs. of Tulsa, Inc., 891 F. Supp. 574, 580 (N.D. Okla. 1995). The court

focused on the fact that the defendant acquired the residences and the furniture

for the clients and maintained a set of keys to the residences. See id. at 579. The

court noted that the clients who lived together were unrelated and were grouped

together for purposes of training and treatment, and that the defendant retained

substantial authority in determining the composition of the homes. See id. The

district court also relied on the fact that the clients did not pay the rent to the

landlords, but rather, the state paid the defendants who in turn paid the landlords. 

See id. Like the court in Lott, the court in Linn found that although the clients

participated in the upkeep of the home, the service provider was ultimately

responsible for its maintenance. See id. The court concluded that the defendant

was in the business of providing both companionship and lodging to its clients

and that the residences were not private homes as contemplated by the legislative

history because they were more like lodging houses that act as business

enterprises. See id.; see also H.R. Rep. No. 913, 93rd Cong., 2nd Sess. 1974
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(“[A] dwelling house used primarily as a boarding or lodging house for the

purpose of supplying such services to the public, as a business enterprise, is not a

private home.”).

In Terwilliger v. Home of Hope, Inc., 21 F. Supp. 2d 1294 (N.D. Okla.

1998), a district court from the same district distinguished the facts set forth in

Linn. The district court concluded in Terwilliger that, based on the facts in the

record before it, the Habilitation training specialists provided 

domestic/companionship services in private homes. The district court found that

the defendant did not acquire the residence or the furniture for the clients. See id.

Instead, 22% of the homes were owned by the clients’ parent or guardian and the

rest were leased in the clients’ names from third parties. See id. The defendants

did not co-sign the lease and the clients selected and purchased their own

furniture. See id. The court also found that, unlike Linn, the defendants only

kept keys to the residences for emergencies or to use with the clients’ express

permission. See id. The court also relied on the fact that the clients, not the

defendant, chose whether or not to have a housemate and who the housemate

would be. See id. The court noted that ten of the twenty seven homes were

occupied by a single client. See id.

Most recently, in Madison v. Resources for Human Development, Inc., 39

F. Supp. 2nd 542 (E.D. Pa. 1999), the district court ruled that the residence in
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which the plaintiffs worked were not private homes. Id. at 548. In reaching its

decision, the court considered the decisions in Lott, Linn, and Terwilliger, as well

as a case from the Utah Supreme Court, Bowler v. Deseret Village Ass’n, Inc.,

922 P.2d 8 (Utah 1996). See id. at 545-46. The court acknowledged that, in light

of these decisions, it is clear that the inquiry into whether services are provided in

a private home for purposes of the domestic services’s exemption is “fact-specific

and to be made on a case-by-case basis, and that no one factor is dispositive.” Id.

at 546.

After evaluating all of the facts, the court in Madison concluded that the

defendant ran the residences “as part of an overall care program” and that the

clients lived there “as clients of the program.” Id. at 548. The court

acknowledged the fact that the clients were given the opportunity to make choices

for themselves, but found that ultimately the service provider was in charge of the

residence. See id. In reaching its conclusion, the district court was persuaded by

the fact that the service provider placed its clients in one of its existing locations,

or limited and supervised the clients’ choice of residence. See id. The district

court pointed out that the clients paid room and board fees to the defendant who

rented the houses and paid the expenses. See id. The district court also noted

that some of the residents did not have keys to the residences and were not

allowed to come and go as they pleased. See id. The court also relied on the fact
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that the maintenance of the homes and the clients’ activities in them were

regulated by state law and the service provider’s rules. See id. Finally, the court

found significant the fact that the clients did not live in the homes before they

became clients of the service provider. See id.

The Ninth Circuit considered the application of the

domestic/companionship services’s exemption in McCune v. Oregon Senior

Servs. Div., 894 F.2d 1107 (9th Cir. 1990). It did not, however, discuss the

meaning of the words “private home.” In McCune, the plaintiffs were full-time,

live-in attendants for elderly and disabled persons unable to care for themselves. 

Id. at 1108. The Ninth Circuit affirmed the district court’s holding that the live-in

attendants came within the companionship exemption to the FLSA. The plaintiffs

in McCune did not seek overtime pay. Id. at 1111. The Ninth Circuit noted that

the plaintiffs “live with their clients at a near poverty level providing around-theclock care.” Id. at 1110. The Ninth Circuit rejected the argument of the fulltime, live-in attendants that they should be entitled to the minimum wage

provisions of the FLSA because “individuals providing services to the elderly and

infirm have a much less attractive job than those domestic service workers

providing service to other clients.” Id. at 1109. The court noted that if full-time,

live-in attendants received minimum wage, the elderly and infirm would “be

forced to forego the option of receiving these services in their homes if the cost
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of the services increases.” Id. at 1110. This policy concern has no application in

this matter. The Habilitation employees who provide services in the supported

living program do not live with their clients or provide around-the-clock care.

We agree with the district court in Madison that 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, and that no factor is dispositive.”

39 F.Supp. 2d at 546. After reviewing the evidence in the light most favorable to

the VAO, we conclude that it has failed to meet its burden of demonstrating that

Habilitation employees in the supported living program fit “plainly and

unmistakenly” within the overtime exemption for domestic service in private

homes because of our duty to construe narrowly § 218(a)(15). See Ackerman v.

Coca-Cola Enters., Inc., 179 F.3d at 1264. The domestic/companionship services

performed by the Habilitation employees in the in-home program fit squarely

within the exemption. Just as the name of the program implies, the services are

performed in the family home of the developmentally disabled client. A family

member is present to give the client emotional support and to manage and

maintain the home in his or her best interests. The VAO’s clients in the

supported living program are placed in a residence outside the family home and

without the full-time, live-in care of a relative. Instead, they are housed in a

residence with strangers who are also developmentally disabled. Their diets and
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daily activities are controlled by a Habilitation employee – not a family member. 

While the lease to the residence may be co-signed by a client, the VAO has the

right to appropriate a room to use as an office for the Habilitation workers. These

residences, managed by VAO employees, do not fit plainly and unmistakenly into

the ordinary connotation of the words “private home” as used in 29 C.F.R.

§ 552.3, notwithstanding the fact that the lease may bear the name of a

developmentally disabled person. The district court did not err in denying the

VAO’s motion for summary judgment.

V

The VAO and the State of Oklahoma Department of Human Services urge

us to consider the history and the state policy interest behind the living

arrangements in its supported living program in evaluating whether these services

are provided in private homes. As a result of a class action law suit, the District

Court of the Northern District of Oklahoma entered an Order of

Deinstitutionalization, shutting down a state-run institution for developmentally

disabled individuals because it was found that the residents were neglected and

abused. See Homeward Bound, Inc. v. Hissom Mem’l Ctr., No. 85-C-437-E, 1987

WL 27104 (N.D. Okla. 1987). While the judgment implementing the court’s

order was on appeal the parties settled and proposed a consent decree that was

approved by the court. The consent decree stated:
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A person’s place of residence is his/her home. The State shall

advocate that he/she may not be arbitrarily removed from the home

for reasons relating to his/her mental retardation, behavior or medical

condition. . . . Adults shall live with people of their choice. 

Whenever possible, the building in which adults live shall either be

purchased or rented by the persons residing in it.

Pursuant to the consent decree, organizations such as the VAO enter into a

contract with the Oklahoma Department of Human Services where they agree to

provide services to the clients in exchange for reimbursement for approved

services on a fee-for-service hourly fixed rate. The service providers are required

to “document reasonable efforts to ensure consumers served through this Contract

are afforded freedom of choice in all aspects of service provision, for which the

Agency is responsible, unless such choice jeopardizes the consumers

independence and well-being.”

The policy considerations articulated here are important and ensure that

persons with developmental disabilities are treated with dignity and are given the

opportunity to integrate into mainstream society and to exercise freedom of

choice. The commendable policies reflected in the consent decree have no

bearing on the question whether the Habilitation employees who perform services

in a supported living program are entitled to overtime pay because they work in

residences managed by service providers. Whether or not the VAO’s employees

receive overtime wages does not change the fact that these residences likely meet
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the goals of the consent decree and provide persons with developmental

disabilities a much more free and dignified existence than if they remained in a

large, state-run institution.

The Department of Human Services contends that whether the VAO’s

employees receive overtime wages does make a difference as to the kind of care

its clients may receive. The Department asserts that the absence of overtime wage

obligations ensures that the state is able adequately to reimburse service providers

such as the VAO for the care of its clients. The Department argues that if the

exemption does not apply, the availability of these important services would be

limited because the services would cost more to provide.

Our task is limited to determining whether the Secretary of Labor’s

limitation of the exemption to domestic/companionship services provided in the

private home of a disabled person is arbitrary, capricious or manifestly contrary to

the FLSA. We conclude that the Secretary of Labor’s interpretation of the reach

of the exemption is reasonable. We lack the authority to broaden the coverage of

the exemption to residences that are maintained by a service provider. The fact

that the requirement that overtime pay should be paid to domestic services

providers in residences like those managed by the VAO may limit the availability

of such services should be addressed to Congress. We decline to broaden the

exemption to apply to residences that are not truly private homes.
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VI

We AFFIRM the district court’s decision because we hold that the services

provided by the Habilitation employees in the supported living program are not

provided in the private homes of the developmentally disabled.

AFFIRMED.