## F I L E D United States Court of Appeals Tenth Circuit 

### DEC 13 2004 

### PATRICK FISHER Clerk PUBLISH
UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

NANCY E. HARBERT, Plaintiff - Appellee, v. HEALTHCARE SERVICES GROUP, INC., a Pennsylvania corporation, Defendant - Appellant.

ELAINE CHAO, Secretary of Labor, Amicus Curiae. No. 03-1156

Appeal from the United States District Court

for the District of Colorado (D.C. No. 00-K-908 (MJW))
Jeffrey L. Braff, Cozen O’Connor, Philadelphia, Pen nsylvania, for DefendantAppellant. Clifford L. Beem, Clifford Beem & Associates, P.C., Denver, Colorado (A. Mark Isley, Clifford Beem & Associates, P.C., Denver, Co lorado, with him on the brief), for Plaintiff-Appellee. Roger Wilkinson, Attorney, United States Departmentof Labor, Washington, DC (Howard M. Radzely, Solicitor of Labor, Steven J. M andel, Associate Solicitor, and Anne P. Fugett, Senior Attorney, United States Department of Labor, Washington, DC, with him on the brief), for Amicus Curiae.- 2 -

Before EBEL , KELLY , and McCONNELL , Circuit Judges.

EBEL , Circuit Judge.

Nancy Harbert (“Plaintiff”) brought this action aga inst her former employer, Healthcare Services Group, Inc. (“Defenda nt”), alleging that Defendant wrongfully denied her request for medical leave und er the Family and Medical Leave Act (“FMLA”). Defendant had denied her reque st based on a provision of the FMLA which excludes from FMLA eligibility any e mployee who is employed at a particular “worksite” if the employer employs less than 50 employees within 75 miles of that worksite. Applying a Department of Labor (“DOL”) regulation, the district court defined Plaintiff’s “worksite” as Defendant’s regio nal office in Golden, Colorado. Because Defendant employed more than 50 employees w ithin 75 miles of its Golden office, the district court denied Defendant’ s motion for summary judgment and, after a bench trial, found in Plainti ff’s favor. Defendant filed this appeal, arguing that the relevant portion of the DO L regulation defining the statutory term “worksite” is invalid. We exercise jurisdiction pursuant to 28 U.S.C. § 1291, and we REVERSE the judgment of the d istrict court and REMAND for further proceedings consistent with this opinion.- 3 - BACKGROUND Defendant contracts out housekeeping and laundry se rvices to long-term care institutions. Defendant employs approximately17,000 employees and has contracts with about 1,300 long-term care facilitie s in 42 states. Organizationally, Defendant is divided into regions , which are composed of multiple districts. Each district is made up of in dividual accounts, which are the long-term care institutions. Account managers workat the account to which they are assigned and report to district managers. Dist rict managers report to regional managers. In Colorado, all district managers and t he regional manager have their offices at the same location in Golden, Colorado. Sunset Manor is a convalescent/nursing facility loc ated in Brush, Colorado, which is more than 75 miles from Golden. In 1994, Plaintiff was hired by Sunset Manor as the Housekeeper Supervisor, and in 1995 he r responsibilities were expanded to include the position of Laundry Departm ent Supervisor. In 1997, Defendant entered into an agreement to provide hous ekeeping and laundry services to Sunset Manor. Plaintiff’s employment w ith Sunset Manor was transferred to Defendant, and Plaintiff became the account manager for Defendant’s Sunset Manor account. Defendant assume d all responsibility for retaining, transferring, or firing Plaintiff and al so paid her salary and provided her- 4 -

benefits. Plaintiff’s duties, however, remained es sentially the same as when she was employed directly by Sunset Manor. Plaintiff worked out of an office at Sunset Manor i n Brush. When Plaintiff reported to her district manager, she reported to h im at Defendant’s regional office in Golden. Such reports were almost always by telephone or through the submission of written reports; Plaintiff went to th e Golden office only for an occasional district meeting of account managers. S unset Manor’s administrator exercised supervision and control over Plaintiff wh en Plaintiff was employed by Sunset Manor, and this did not change after Plainti ff became an employee of Defendant. Plaintiff believed that she had a long- term job at Sunset Manor and planned to work there until her retirement at age 6 5. On November 6, 1998, Plaintiff injured her right hi p in a non-work related automobile accident. Plaintiff got permission from Defendant to take two 30-day periods of leave, and Plaintiff began the first 30- day period of leave on December 8, 1998. On February 20, when Plaintiff failed to report to work after the expiration of the second 30-day period of leave, De fendant terminated Plaintiff’s employment. Although Defendant had granted Plaintiff two 30-dayperiods of leave, Defendant denied Plaintiff’s request for leave unde r the Family and Medical Leave Act (“FMLA”), 29 U.S.C. § 2601 et seq. The FMLA requires covered- 5 -

employers to provide eligible employees with up to 12 weeks of medical leave per year for, inter alia, a serious health condition th at renders the employee unable to work. Id. § 2612(a)(1)(D). Only those employees whose emplo yer employs at least 50 employees within 75 miles of that employee ’s “worksite” are eligible for leave under the Act. Id. § 2611(2)(B)(ii). The statutory term “worksite” i s defined in a DOL regulation. See 29 C.F.R. § 825.111(a)(3). Defendant denied Plaintiff’s request for FMLA leave based on Defendant’s conclusion that Plaintiff was not employed at a “wo rksite” at which Defendant employed 50 or more employees within 75 miles, and that she was therefore ineligible for FMLA leave. This conclusion was bas ed on the premise that Plaintiff’s “worksite” was Sunset Manor in Brush, r ather than Defendant’s regional office in Golden. During the relevant tim e period, Defendant employed fewer than 50 employees within 75 miles of Sunset M anor but employed more than 50 employees within 75 miles of its regional o ffice in Golden. Plaintiff filed this lawsuit, alleging that Defenda nt wrongfully denied her request for medical leave under the FMLA and wrongf ully terminated her. Defendant moved for summary judgment in part on the ground that the relevant portion of the DOL regulation defining the statutory term “worksite” was invalid.
See Harbert v. Healthcare Servs. Group, Inc. , 173 F. Supp. 2d 1101, 1106 (D.- 6 -

Colo. 2001). The district court upheld the regulat ion and denied Defendant’s motion for summary judgment. See id. After a bench trial, the district court concluded t hat Plaintiff’s “worksite” under the applicable regulation was Defendant’s reg ional office in Golden, Colorado. Because Defendant employed more than 50 employees within 75 miles of its Golden office, the court held that Defendantwrongfully denied Plaintiff benefits under the FMLA. The district court awarde d Plaintiff back pay, front pay, liquidated damages, interest, costs, and attor ney fees. In this appeal, Defendant concedes that the applica ble DOL regulation identifies Plaintiff’s “worksite” as its regional o ffice in Golden. Defendant argues only that this regulation is invalid, conten ding that the agency exceeded its authority to implement the FMLA.

DISCUSSION I. Appellate Jurisdiction We first address whether we have jurisdiction to co nsider the merits of this appeal. On March 13, 2003, the district court ente red an order resolving the issue of liability in Plaintiff’s favor and setting forth a formula for the calculation of damages. The court instructed the parties to meet to determine the precise amount of damages and prepare a judgment in accorda nce with that determination. Defendant filed a notice of appeal on April 11. Th e district court later entered- 7 -

judgment, fixing damages in the amount agreed upon by the parties and disposing of the case. No new notice of appeal was taken fro m the subsequent judgment. Defendant now wishes to appeal only the issue of li ability resolved in the March 13 decision, not the subsequent calculation of dama ges. Under 28 U.S.C. § 1291, we have jurisdiction only o ver “final” decisions of the district court. Albright v. UNUM Life Ins. Co. of Am. , 59 F.3d 1089, 1092 (10th Cir. 1995). Accordingly, we must determine w hether the March 13 Order – the only order from which a notice of appeal was ta ken – was a final decision and, if not, whether it became final when the district c ourt subsequently fixed damages and disposed of the case.

A. Whether the March 13 Order was a “final” decisi on For a ruling to be final, “it must end the litigati on on the merits, and the judge must clearly declare his intention in this re spect.” FirsTier Mortgage Co. v. Investors Mortgage Ins. Co. , 498 U.S. 269, 273-74 (1991) (internal quotations and citations omitted). A final order is one that “leave[s] nothing for the court to do but execute the judgment.” Albright , 59 F.3d at 1092 (internal quotations omitted). As a general rule, “the touchstone of a final order is a decision by the court that a party shall recover only a sum certain .” Id. (citing Fed. R. Civ. P. 58) (internal quotations omitted) (emphasis in o riginal). Accordingly, an order- 8 -

that determines liability but leaves damages to be calculated is not final. Id. However, pursuant to an exception to the general ru le, “an order is final even if it does not reduce the damages to a sum certain if the order sufficiently disposes of the factual and legal issues and any unresolved iss ues are sufficiently ministerial that there would be no likelihood of further appeal .” Id. at 1093 (quotations omitted). For example, in Albright v. UNUM Life Insurance Co. of America , the plaintiff had requested in his motion for summary j udgment the “monthly benefit of 66 2/3 % of his preinjury basic monthly earnings less other income benefits such as workers’ compensation and Social Security D isability.” Id. at 1092 (quotation omitted). The district court granted hi s motion but did not address the issue of benefits. Id. We stated that “both determining the correct amou nt of monthly benefits and the proper deductions for othe r income benefits may prove to be complicated and disputed calculations” and we re not likely to be simply ministerial. Id. at 1093. Accordingly, we held that the district c ourt’s order was not final, and we dismissed the defendant’s appeal. Id. at 1094. In this case, the district court awarded Plaintiff back pay, front pay, liquidated damages, interest, costs, and attorney f ees. Specifically, the district court set total back pay in the amount of $84,778.8 0, to be reduced by “the amount [Plaintiff] has earned [since her terminatio n] through other employment- 9 -

together with interest on the net amount at the leg al rate.” The district court set total front pay in the amount of $102,374.40, to be reduced by “the amount of compensation [Plaintiff] would earn from Conoco [until her 65th birthday], calculated at her present rate of earnings per weekplus any guaranteed raises or cost of living increases.” The district court then ordered the parties “to mee t and confer within[] 20 days from the date hereof to determine the precise amounts to be set forth in the judgment in accordance with the above stated findin gs and conclusions.” The district further directed, “If counsel can agree, t hey shall prepare a judgment in accordance herewith. If counsel are unable to agre e, they shall notify the court within the following ten days and the matters not a greed upon will be set for hearing.” The various components of the damages award were no t sufficiently fixed to satisfy the standard we set forth in Albright . The amount of Plaintiff’s past and future earnings was not determined, and calculation of those amounts could have proven complicated and disputed. For example, nothing in the order indicates whether Plaintiff’s weekly compensation at Conoco is fixed or varies, and nothing in the order defines a “guaranteed” rai se or cost of living increase. As such, the process of calculating damages in this case was no more “ministerial” than it was in Albrightitself.- 10 -

Moreover, the district court must have contemplated the possibility of a contentious process because it provided in its orde r that if the parties could not agree on the amount of the award, the disputed issu es would be set for hearing. By so providing, the district court did not “clearl y declar[e] his intention” to “end the litigation on the merits” in the March 13 Order . FirsTier , 498 U.S. at 273-74. For these reasons, we hold that the court’s March 1 3 decision was not a final decision.

B. Whether the March 13 Order became “final” when the district court disposed of the remainder of the case In Lewis v. B.F. Goodrich Co. , we held that an otherwise nonfinal decision becomes final and appealable if the district court adjudicates all remaining claims against all remaining parties before the appellate court acts to dismiss the appeal on the merits for lack of jurisdiction. 850 F.2d 6 41, 645 (10th Cir. 1988) (en banc); see also Old Republic Ins. Co. v. Durango Air Serv., Inc. , 283 F.3d 1222, 1225 (10th Cir. 2002); Dodd Ins. Servs., Inc. v. Ro yal Ins. Co. of Am. , 935 F.2d 1152, 1154 n.1 (10th Cir. 1991); Fed. Sav. & Loan I ns. Corp. v. Huff , 851 F.2d 316, 317-18 (10th Cir. 1988) (en banc); Moore’s Fed eral Practice , § 54.25[3], at 54-87 (“If an order is not certified under Rule 54( b), but a notice of appeal is nevertheless filed, any subsequent order of the dis trict court that completely adjudicates the remaining claims is sufficient to v alidate the otherwise premature- 11 -

notice of appeal.”). Accordingly, a decision that is otherwise nonfinal because it leaves damages unresolved becomes final and appeala ble if post-appeal adjudications in the district court precisely fix d amages and dispose of the case. Gen. Motors Corp. v. New A.C. Chevrolet, Inc. , 263 F.3d 296, 311 n.3 (3d Cir. 2001). Here, subsequent to the notice of appeal, the distr ict court entered a judgment fixing damages. All claims against all pa rties are now resolved. The district court’s nonfinal decision therefore became final as a result of the postappeal proceedings in the district court. We hold that the notice of appeal filed in this case was effective to confer appellate jurisdi ction over the district court’s March 13 Order. See Lewis , 850 F.2d at 645; Gen. Motors Corp. , 263 F.3d at 311
n.3.

II. Merits Defendant challenges only the validity of 29 C.F.R. § 825.111(a)(3), the Department of Labor regulation defining the “worksi te” of jointly-employed employees. Both parties agree that this joint empl oyment provision, if valid, governs this case and that it would lead to a concl usion that Plaintiff was a covered employee. We review a district court’s dec ision regarding the validity of an agency regulation de novo . See Pub. Lands Council v. Babbitt , 167 F.3d 1287, 1293 (10th Cir. 1999).- 12 -

The framework we use to analyze an agency’s constru ction of a statute it administers was set forth by the Supreme Court in C hevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc. , 467 U.S. 837, 842-44 (1984). Chevron mandates a two-step inquiry. “First, always, is th e question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as we ll as the agency, must give effect to the unambiguously expressed intent of Congress.” Id. at 842-43. Because the judiciary is the final authority on issues of statu tory construction, it “must reject administrative constructions which are contrary to clear congressional intent.” Id. at 843 n.9. To ascertain whether Congress had an i ntent on the precise question at issue, courts should “employ[] traditional tools of statutory construction.” Id. These tools include examination of the statute’s te xt, structure, purpose, history, and relationship to other statutes. See Gen. Dynamics Land Sys., Inc. v. Cline , 540 U.S. 581, 124 S. Ct. 1236, 1248-49 (2004). Second, [i]f...the court determines Congress has not direct ly addressed the precise question at issue, the court does not simpl y impose its own construction on the statute, as would be necessary in the absence of an administrative interpretation. Rather, if the s tatute is silent or ambiguous with respect to the specific issue, the q uestion for the court is whether the agency's answer is based on a permissible construction of the statute.- 13 -

Chevron , 467 U.S. at 843 (footnote omitted). The Court explained that an agency’s answer is permissible unless arbitrary, capricious, or manifestly contrary to the statute: The power of an administrative agency to administera congressionally created . . . program necessarily r equires the formulation of policy and the making of rules to fi ll any gap left, implicitly or explicitly, by Congress. If Congress has explicitly left a gap for the agency to fill, there is an express del egation of authority to the agency to elucidate a specific provision of the statute by regulation. Such legislative regulations are given controlling weight unless they are arbitrary, capricious, or manifestl y contrary to the statute. Sometimes the legislative delegation to a n agency on a particular question is implicit rather than explici t. In such a case, a court may not substitute its own construction of a statutory provision for a reasonable interpretation made by the adminis trator of an agency. Id. at 843-44 (internal quotations and citations omitt ed) (footnotes omitted).
A. The Family and Medical Leave Act (“FMLA”) The FMLA was enacted, in part, “to balance the dema nds of the workplace with the needs of families...[and] to entitle emplo yees to take reasonable leave for medical reasons...in a manner that accommodates the legitimate interests of employers.” 29 U.S.C. § 2601(b). The Act entitles eligible employees of covered employers to take up to 12 weeks of unpaid, job-pro tected leave each year because of, among other things, “a serious health c ondition that makes the employee unable to perform the functions of the pos ition of such employee.” Id. § 2612(a)(1)(D).- 14 -

As part of the balance that was struck between the interests of employers and the interests of employees, Congress included asmall employer exception that excludes from the Act’s coverage employers with few er than 50 employees. Id. § 2611(4)(A)(i). A separate exception was granted for small operations – that is, a potentially large company with a relatively small satellite office in a particular area. Specifically, the statute excludes from cove rage any employee whose employer employs less than 50 employees within 75 m iles of that employee’s “worksite” (“the 50/75 provision”). Id. § 2611(2)(B)(ii). According to the House Committee Report, the 50/75 provision “recognizes t he difficulties an employer may have in reassigning workers to geographically s eparate facilities.” H.R. Rep. No. 102-135(I), at 37 (1991). With these eligibility restrictions, Congress recog nized that only about 40 to 50 percent of all employees would be covered by the Act. S. Rep. No. 102-68, at 24 (1991); H.R. Rep. No. 102-135(I), at 37 (1991).

B. The FMLA regulation defining “worksite” Congress granted the Secretary of Labor the authori ty to prescribe such regulations as are necessary to carry out the FMLA. 29 U.S.C. § 2654. The regulation at issue in this case, 29 C.F.R. § 825.1 11(a)(3), defines the “worksite” of an employee who is jointly employed by two or mo re employers as follows:- 15 -

For purposes of determining that employee’s eligibi lity, when an employee is jointly employed by two or more employe rs (see § 825.106), the employee’s worksite is the primary employer’s office from which the employee is assigned or reports. Th e employee is also counted by the secondary employer to determine eligibility for the secondary employer’s full-time or permanent emp loyees. Id. § 825.111(a)(3). Section 825.106(a) states that two entities may be considered “joint employers” where they both exercise some con trol over the work or working conditions of the employee. Id. § 825.106(a). For example, joint employment will ordinarily be found to exist when atemporary agency supplies employees to a second employer. Id. § 825.106(b). In joint employment relationships, the “primary employer” is the only e mployer responsible for providing FMLA leave. Id. § 825.106(c). The “primary employer” is determine d by considering such factors as the authority to hir e and fire, assign/place the employee, make payroll, and provide employment bene fits. Id. In this case, the district court identified Plainti ff as jointly employed by both Defendant and Sunset Manor, applied § 825.111( a)(3), and defined Defendant as Plaintiff’s “primary employer.” None of this is at issue in this appeal. What is at issue is whether § 825.111(a)(3 ) is a valid regulation implementing the FMLA.- 16 -

C. The Chevron analysis Pursuant to Chevron ’s mandate, we must first consider whether Congress expressed a clear intent with respect to the meanin g of “worksite” for an employee who is jointly employed. See 467 U.S. at 842-43. We conclude that congressional intent with respect to this issue is not sufficiently clear to render the regulation invalid under the first step of Chev ron . “A fundamental canon of statutory construction is t hat, unless otherwise defined, words will be interpreted as taking their ordinary, contemporary, common meaning.” Perrin v. United States , 444 U.S. 37, 42 (1979); CBC, Inc. v. Bd. of Governors of the Fed. Reserve Sys. , 855 F.2d 688, 690 (10th Cir. 1988). Congress did not define the term “worksite” in the FMLA. However, the common understanding of the term “worksite” is the site wh ere the employee works. Here, the parties do not dispute that Plaintiff worked atSunset Manor in Brush, Colorado. Under the ordinary meaning of the term, her “worksite” would be Sunset Manor in Brush. However, under the joint employment regulation, § 825.111(a)(3), Plaintiff’s “worksite” is Defendant’s regional office in Golden, a place where Plaintiff went only for occasional meet ings of account managers. Nonetheless, Congress did not expressly define the term “worksite” in the FMLA, and because Congress has not directly spoken to the question at issue, we proceed to a step-two analysis under Chevron

.- 17 -

Under the second step of Chevron , we must “give[] controlling weight [to the agency’s regulations] unless they are arbitrary , capricious, or manifestly contrary to the statute.” Chevron , 467 U.S. at 844. In light of the deference we owe an agency’s construction of the statute, this c ase presents a very close question. However, we conclude that § 825.111(a)(3 ), as applied to the situation of an employee with a fixed place of work, is arbit rary, capricious, and manifestly contrary to the FMLA. We first address the three i ndicia of congressional intent that lead us to this conclusion, and then consider the counter-arguments made by Plaintiff and the Secretary of Labor.

1. Common meaning of the term “worksite” We concluded above that the agency’s definition of “worksite,” as applied to Plaintiff, runs contrary to the common meaning o f that term. See discussion
supra . That the agency’s definition of Plaintiff’s work site contravenes the plain meaning of the term “worksite” is one indicia of co ngressional intent that militates against deference to the agency’s constru ction of the statute under the second step of Chevron

.

2. Legislative Purpose “Courts must guard against interpretations that mig ht defeat a statute’s purpose[.]” United States v. Soto-Ornelas , 312 F.3d 1167, 1172 (10th Cir. 2002)- 18 -

(quotations and alterations omitted). The agency’s definition of worksite, as applied to Plaintiff, is contrary to the purpose un derlying the 50/75 provision. As discussed above, Congress included a provision i n the FMLA excluding from the Act’s coverage employers with fewer than 5 0 employees. 29 U.S.C. § 2611(4)(A)(i). However, Congress also recognizedthat even potentially large employers (i.e., those with more than 50 employees) may have difficulty finding temporary replacements for employees who work at ge ographically scattered locations. Congress therefore determined that if a ny employer (large or small) has no significant pool of employees nearbyto cover for an absent employee, that employer should not be required to provide FMLA leave to that employee. Specifically, Congress determined that an employer must employ at least 50 employees within 75 miles of the employee’s worksite. Id. § 2611(2)(B)(ii). The House Report confirms that the congressional pu rpose underlying the 50/75 provision was to remove the burden of providi ng FMLA leave from employers who do not have an abundant supply of temporary replacements in close geographic proximity to the employee requesti ng leave: For purposes of determining the size of an employer , there is a geographic limitation of a 75-mile radius that appl ies to the aggregation of employees at different facilities. This provision recognizes the difficulties an employer may have in reassigning workers to geographically separate facilities. H.R. Rep. No. 102-135(I), at 37 (1991).1 We do not intend this statement to cast doubt on th e portion of the

agency’s regulation defining the “worksite” of empl oyees whose regular workplace is his or her home. See 29 C.F.R. § 825.111(a)(2). - 19 - An employer’s ability to replace a particular emplo yee during his or her period of leave will depend on where that employee must perform his or her work. In general, therefore, the congressional purpose un derlying the 50/75 provision is not effected if the “worksite” of an employee who h as a regular place of work is defined as any site other than that place. 1 For example, if Defendant were to grant leave to Pl aintiff, Defendant would have been required to find an employee to cover forPlaintiff at Sunset Manor in Brush, Colorado. It is undisputed that Defendant e mployed fewer than 50 employees within 75 miles of Brush. Defendant ther efore had no abundant supply of employees who could have covered for Plaintiff d uring her period of leave. Defendant, a large employer with geographically dis persed employees, is precisely the type of employer Congress intended to protect with its enactment of the 50/75 provision. Accordingly, a regulatory provision that defines Pl aintiff’s “worksite” as Defendant’s regional office in Golden does not effe ct the congressional purpose underlying the 50/75 provision.- 20 - 3. Arbitrary distinction between sole and joint em ployers The challenged regulation also creates an arbitrary distinction between sole employers and joint employers. For example, if the employer is a company that operates a chain of convenience stores, the “worksi te” of an employee hired to work at one of those convenience stores is that particular convenience store. See 58 Fed. Reg. 31794, 31798 (1993). If, on the otherhand, the employer is a placement company that hires certain specialized employees to work at convenience stores owned by another entity (and the refore is considered a joint employer), the “worksite” of that same employee hir ed to work at that same convenience store is the office of the placement co mpany. See 29 C.F.R. § 825.111(a)(3). Assuming both employers employ more than 50 employe es within 75 miles of their central office but fewer than 50 employees within 75 miles of the convenience store, the employee is ineligible for FMLA leave if the employer is a sole employer (e.g., the company that owns the conv enience store chain) but eligible for FMLA leave if the employer is a joint employer(e.g., the placement company). Accordingly, the joint employment provision create s the possibility that an employer’s responsibility to provide FMLA leave to an employee will depend exclusivelyon whether that employer is a sole employer or a j oint employer. This2 The Secretary insists that the distinction between sole employers and joint

employers is not arbitrary because the agency could reasonably have concluded that joint employers are better equipped to find re placements for remotelystationed employees. We disagree. While some join t employers may have employees who are willing to change job locations r egularly (e.g., temporary employees), there is no reason to believe that thes e employees are any more likely than any other employee to do so if changing job lo cations requires moving to a new location more than 75 miles away. - 21 - is true despite the fact that neither employer has an abundant supply of nearby employees to replace temporarily an employee taking leave and, consequently, are both subject to the burden Congress tried to allevi ate by enacting the 50/75 provision. See discussion supraSection II.C.2. The effect of the joint employment provision is to require the joint employ er to bear that burden even though the sole employer is relieved of that burden . Because both types of employers bear the burden the 50/75 provision was d esigned to alleviate, there is simply no basis in the statute or in logic for such a distinction. 2 We owe no deference to an agency’s arbitrary construction of a statute. See Chevron , 467
U.S. at 844. In sum, the ordinary meaning of the term “worksite, ” the congressional purpose underlying the 50/75 provision, and the arb itrary distinction the regulation creates between sole and joint employers all militate strongly against deference to the agency’s construction of the statu te as applied to Plaintiff. At bottom, Congress intended the term “worksite” to be construed as the employee’s- 22 -

regular place of work, and we see no reason to appl y a different definition to Plaintiff simply because she is jointly-employed. We turn next to the counterarguments offered by the Secretary and Plaintiff.

4. Counter-arguments a. The legislative history’s reference to the WARN Act The Secretary insists that the joint employment pro vision is valid because the agency, as directed by the legislative history, patterned the definition of “worksite” after the definition of “single site of employment” in the Worker Adjustment and Retraining Notification (“WARN”) Act , 29 U.S.C. § 2101 et seq. The Secretary correctly points out that the House a nd Senate Committee Reports both indicate that the term “worksite” is t o be construed consistent with the term “single site of employment” under the WARN Act and regulations under that Act: The term “worksite” is intended to be construed in the same manner as the term “single site of employment” under the W orker Adjustment and Retraining Notification Act (“WARN”) , 29 U.S.C. 2101(a)(3)(B), and regulations under that Act (20 C FR Part 639). Where employees have no fixed worksite, as is the c ase for many construction workers, transportation workers, and s alespersons, such employees’ “worksite” should be construed to mean the single site of employment to which they are assigned as their home base, from which their work is assigned, or to which they repo rt. S. Rep. No. 103-3, at 23 (1993); see also H.R. Rep. No. 103-8(I), at 35 (1993) (substantially the same).3 This regulation was promulgated in 1989 (see 54 Fed. Reg. 16042 (1989)) ,

prior to enactment of the FMLA. - 23 - The WARN Act requires covered employers to provide written notice to affected employees sixty days before a “mass layoff.” 29 U.S.C. § 2102(a); see also Frymire v. Ampex Corp. , 61 F.3d 757, 761 (10th Cir. 1995). Congress defined “mass layoff” as “a reduction in force whic h...results in an employment loss at the single site of employmentduring any 30-day period for...at least 50 employees[.]” 29 U.S.C. § 2101(a)(3) (emphasis add ed). The WARN Act itself does not define “single site of employment.” The Secretary of Labor has promulgated a regulation defining the term “single site of employment” for purposes of the WARN Act. 3 20 C.F.R. § 639.3(i); see also 29 U.S.C. § 2107. The focus of the regulation is in explaining when two or more different employment sites can be counted together as a “single site” for the purpose of aggregating employees to r each the 50-employee minimum. See 20 C.F.R. § 639.3(i). The regulation also recogni zes that the employment sites of certain groups of employees wil l be difficult to identify. Accordingly, it provides: For workers whose primary duties require travel fro m point to point, who are outstationed, or whose primary duties invol ve work outside any of the employer's regular employment sites (e.g ., railroad workers, bus drivers, salespersons), the single sit e of employment to which they are assigned as their home base, from wh ich their work is4 The passage provides in full:

Another commenter suggested that in the railroad in dustry certain (continued...) - 24 - assigned, or to which they report will be the singl e site in which they are covered for WARN purposes. Id. § 639.3(i)(6). The Secretary argues that its FMLA joint employmentregulation, 29 C.F.R. § 825.111(a)(3), is consistent with this WARN regul ation defining “single site of employment” for purposes of the WARN Act. Specific ally, the Secretary argues that jointly-employed employees are essentially “ou tstationed” workers and are properly treated in the joint employment provision of the FMLA in the same manner that outstationed workers are treated under this WARN Act regulation. For several reasons, we disagree. First, we believe that this provision of the WARN A ct governs only employees without a fixed place of work, not employ ees who, like Plaintiff, do have a fixed place of work. All three examples lis ted in the parenthetical in the WARN Act regulation are employees who do not have afixed place of work. See 20 C.F.R. 639.3(i)(6) (listing railroad workers, bu s drivers, and salespersons). Furthermore, the agency, in enacting the WARN Act r egulation, referred to § 639.3(i)(6) as “that part of the regulation relat ing to mobile workers[.]” 54 Fed. Reg. 16042, 16051 (1989). 4 Finally, for employees who do have a fixed place of4 (...continued)

maintenance crews have no home base and should be t reated as separate operating units. While such workers may w ell be considered as a separate operating unit, their status must be determined in terms of the single site of employment to which they are assigned. These workers may not have an assigned home base, but the y must get their orders or assignments from somewhere, even if that place changes from time to time. In order to cover this situatio n and the situation of outstationed workers and traveling workers who r eport to but do not work out of a particular office, that part of t he regulation relating to mobile workers has been revised to clarify that such workers should be treated as assigned to their home base orto the single site from which their work is assigned or to which they report. This part of the definition has been moved, for reasons of or ganizational clarity, to be a part of the definition of “single site of employment” in § 639.3(i). 54 Fed. Reg. at 16051 (emphasis added). - 25 - work, there is no reason to believe the agency for purposes of the WARN Act would have named any different place as the employe e’s employment site. Accordingly, we conclude that the applicable WARN A ct regulation, 20 C.F.R. § 639.3(i)(6), applies only to employees without a fixed place of work and is not relevant to employees who, like Plaintiff, do have a fixed place of work. Further, even if the term “outstationed” in the WARN Act regulation could reasonably be interpreted more broadly to encompass employees who do have a fixed place of work, the definition of “single site of employment” for outstationed employees under the WARN Act is ambiguous. Under the WARN Act regulation, there are three potentially different locations that could be the “single site of- 26 -

employment” of an outstationed employee – namely, “ the site...to which they are assigned as their home base, from which their work is assigned, or to which they report.” 20 C.F.R. § 639.3(i)(6). Accordingly, ev en if Plaintiff, who does have a fixed place of work, could be considered “outstatio ned” under the WARN Act regulation, it is entirely unclear from the regulat ion whether her “single site of employment” would be Brush (the site to which she i s assigned) or Golden (the place to which she reports and from which she is as signed). As such, the WARN Act regulation provides little, if any, guidance to the agency with respect to the proper definition of “worksite” for an employee who , although arguably “outstationed,” does have a fixed place of work. Absent guidance from Congress, such ambiguity mightmilitate in favor of deference to the agency’s construction of the statu te. As discussed above, however, the plain meaning of the term “worksite” i n the FMLA, the congressional purpose underlying the 50/75 provisio n in the FMLA, and the arbitrary distinction the regulation creates betwee n sole and joint employers under the FMLA are all factors that militate strongly aga inst deference to the agency’s construction of that statute. We therefore find no merit in the Secretary’s argument that an ambiguous regulation implementing the WARN Act renders the agency’s construction of the FMLA reasonable.- 27 - b. Congressional recognition that the “worksite” o f some employees may not be their regular workplace The Secretary also argues that because the legislat ive history suggests that the “worksite” of some employees may be some place other than their regular place of work, it was permissible for the agency to define the “worksite” of jointly-employed employees as some other location. We disagree. The House and Senate Committee Reports both provide a definition of “worksite” for employees with “no fixed worksite.” Specifically: Where employees have no fixed worksite, as is the c ase for many construction workers, transportation workers, and s alespersons, such employees’ “worksite” should be construed to mean the single site of employment to which they are assigned as their home base, from which their work is assigned, or to which they repo rt. S. Rep. No. 103-3, at 23 (1993); see also H.R. Rep. No. 103-8(I), at 35 (1993) (substantially the same). As such, both Committee Reports recognized that all employees, even those without a fixed worksite, mus t have a definable “worksite” so that their eligibility under the Act can be dete rmined. For employees without a fixed worksite, it was necessary to identify some f ixed location that could serve as a “worksite” for purposes of the Act. See, e.g. , S. Rep. No. 103-3, at 23. That location could not be the employee’s regular workpl ace, because the employee has no regular workplace. Accordingly, we do not quest ion the validity of the agency’s regulation pertaining to employees with “n o fixed worksite.” See 29 C.F.R. § 825.111(a)(2).5 We also note that we find no merit in Plaintiff’s a rgument that

congressional silence since the Secretary promulgat ed the regulation militates in favor of the regulation’s validity. Plaintiff reli es primarily on Walker v. United Parcel Service, Inc. , 240 F.3d 1268 (10th Cir. 2001). In Walker , Congress had (continued...) - 28 - Furthermore, we do not question the validity of the joint employment provision, id. § 825.111(a)(3), insofar as it applies to employee s of temporary help agencies. An employee of a temporary help age ncy does not have a permanent, fixed worksite. It is therefore appropr iate that the joint employment provision defines the “worksite” of a temporary emp loyee as the temporary help office, rather than the various changing locations at which the temporary employee performs his or her work. See 60 Fed. Reg. 2180, 2187 (1995) (explaining that under joint employment provision, “worksite” of temporary employee is temporary help office). On the contrary, if an employee does have a fixed worksite, there is no similar need to identify a constructive “worksite” for purposes of the FMLA. The Secretary’s argument that an employee with a fixed worksite should be treated comparably to an employee without a fixed worksite is therefore without merit. In sum, we find the counter-arguments offered by Pl aintiff and the Secretary unavailing, and we conclude that 29 C.F.R . § 825.111(a)(3), as applied to an employee like Plaintiff with a fixed worksite yet subject to joint employers, is arbitrary, capricious, and manifestly contrary t o the FMLA. 55 (...continued)

amended Title VII without taking issue with the age ncy regulation in question, even though the validity of the regulation had been the subjectof debate within the courts. Id. at 1276. We held that congressional silence underthese circumstances lent support to a conclusion that the regulation is valid, emphasizing that “[p]lainly EEOC’s regulation has n ot escaped public or legislative notice over what has been nearly a quarter century.” Id. Here, the subject regulation had not been the subject of debate until this case. - 29 - CONCLUSION We appreciate the deference we owe to an agency’s c onstruction of the statute it is charged with administering when the a gency’s construction is not contrary to the clearly expressed intent of Congres s. As the Supreme Court recently recognized, however, “[o]ur deference to t he Secretary...has important limits: A regulation cannot stand if it is arbitrary, capricious, or manifestly contrary to the statute.” Ragsdale v. Wolverine Wo rld Wide, Inc. , 535 U.S. 81, 87 (2002) (quotation omitted) (invalidating differe nt FMLA regulation under second step of Chevron ). We hold that 29 C.F.R. § 825.111(a)(3), as appl ied in this case to a jointly employed employee with a fix ed worksite, is not a valid exercise of agency authority, and we REVERSE the ju dgment of the district court and REMAND for further proceedings consistent with this opinion.03-1156, Nancy E. Harbert v. Healthcare Services, I nc.

KELLY , Circuit Judge, concurring in part and dissenting in part. While I concur in the court’s conclusion that we have appellate jurisdiction, I dissent from its holding that 29 C.F.R. § 825.111 (a)(3) defining the statutory term “worksite” is invalid, as applied to a jointly employed employee with a largely fixed worksite. Declaring invalid a regulation that an agency has been charged with developing is strong medicine and onlyappropriate when the regulation is “arbitrary, capricious, or manifestly contrary to the statute.” Chevron U.S.A., Inc. v. NRDC , 467 U.S. 837, 844 (1984). Here, the statute neve r defines “worksite” and the Secretary of Labor is empowered to prescribe rules to implement the FMLA. 29 U.S.C. § 2654. We must def er to the agency’s interpretation if it “is based on a permissible con struction of the statute.” Chevron , 467 U.S. at 843. The court invalidates the regulation as applied to jointly employed employees with largely fixed worksites as inconsist ent with the purpose of the 50/75 provision. Healthcare does not appeal the di strict court’s decision that Ms. Harbert was jointly employed, but instead contends that the “worksite” definition is invalid. Aplt. Br. at 9-10. The 50/75 provisio n excludes an employee from FMLA coverage if the employee “is employed at a wor ksite at which [the] employer employs less than 50 employees if the tota l number of employees employed by that employer within 75 miles of that w orksite is less than 50.” 29 U.S.C. § 2611(2)(B)(ii).-2-

Joint employment comes in many forms. But the prim ary employer generally has control over the reassignment, placem ent, and hiring and firing of joint employees, not the secondary employer. See 29 C.F.R. § 825.106(c). Thus, an employee’s “worksite” is defined with reference to the employer retaining the most control over the employee, and the employer re sponsible for providing FMLA leave. Id. The court’s ipse dixit that the Secretary’s defin ition of the term “worksite” is contrary to common meaning fails to a ccount for the many variations in joint employment relationships, from forever fixed to forever mobile. See Moreau v. Air Fr. , 356 F.3d 942, 946 (9th Cir. 2004); 29 C.F.R.
825.106. The legislative history reflects that the Senate an d House obviously were aware of variations in joint employment relationshi ps and directed the Secretary to construe “worksite” in the same manner as the te rm “single site of employment” under the WARN Act. S.R. Doc. No. 103- 3, at 25 (1993); see also H.R. Doc. No. 103-8, pt. 1, at 35 (1993). Though b oth the legislative history and a WARN Act regulation, 20 C.F.R. § 639.3(i), discus s workers that lack a fixed site of employment, the Secretary’s interpretation that other arrangements are encompassed within the directive to the WARN Act is a permissible and reasonable interpretation. Holding that the WARN A ct regulation only applies to employees without a regularly fixed site of employm ent would seem to contravene-3-

the express language of the provision which mention s other categories, including employees who “travel from point to point, who are outstationed, or whose primary duties involve work outside any of the empl oyer’s regular employment sites.” Id. The court’s contrast between sole and joint employe rs (a convenience store chain and a temporary placement agency) as an example resulting in arbitrary differences in treatment is hardly persuasive. Ct. Op. at 20; but see id. at 28. The court contends that these two employers would be tr eated differently even though neither has abundant replacements nearby. Unlike t he court, I find this distinction favors the validity of the regulation. Basing FMLAeligibility on primary employers prevents confusion and provides certainty , because a temporary placement employee’s coverage could vary daily were he placed in different convenience stores on a rotating basis. Further, c ontrary to the court’s assertion, the ability of a convenience store and a placement agency to find abundant nearby replacements probably is not identical, after all, the placement agency specializes in hiring and placing employees within the area. Though the regulation might be more precise were we crafting it, that is not our function. It is a permissible exercise of agen cy rulemaking. I respectfully dissent.