Opinion ID: 3167162
Heading Depth: 2
Heading Rank: 1

Heading: A Private Home Under the FLSA

Text: The district court granted summary judgment to UCP, citing the factors set forth by the Tenth Circuit in Welding v. Bios Corp., 353 F.3d 1214 (10th Cir. 2004). Applying the Welding factors, the district court concluded that the employees provided services in residences that were private homes within the context of the FLSA. The district court reasoned that UCP lacked control over the living arrangements and was not responsible for the additional hours of labor occasioned by the shared living space with clients. On appeal the employees assert that the court erred in applying the Welding factors. Specifically, they argue that the clients had less control over the residences than the employees; consequently, the residences could not be private homes. We decline to adopt the Welding factors in this case but nonetheless agree with the thrust of the district court's reasoning. The FLSA requires employers to pay overtime compensation. 29 U.S.C. § 207. But the Act exempts 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). -4- Id. § 213(a)(15) (emphasis added). At the time in question, the associated regulations defined the phrase 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. The term includes employees such as cooks, waiters, butlers, valets, maids, housekeepers, governesses, nurses, janitors, laundresses, caretakers, handymen, gardeners, footmen, grooms, and chauffeurs of automobiles for family use. 29 C.F.R. § 552.3 (2014) (emphasis added).2 Section 552.101 further clarifies this definition, directing that the physical form of the residence does not determine whether it can be a private home. That section notes that [a] separate and distinct dwelling maintained by an individual or a family in an apartment house, condominium or hotel may constitute a private home, id. § 552.101(a), even though they are commercial in form and operation. In contrast, those who happen to work in structures that look like private homes, but are primarily rooming or boarding houses are not considered domestic service employees. Id. § 552.101(b). The same is true for employees employed in connection with a business or professional service which is conducted in a home (such as a real estate, doctor's, dentist's or lawyer's office). Id. We have not previously construed the term private home in § 552.3. But as a general matter, we have held that exemptions to the FLSA are narrowly construed in order to further Congress' goal of providing broad federal employment protection. Spinden v. GS Roofing Products Co., 94 F.3d 421, 426 (8th Cir. 1996) (quotation and 2 The regulations in this area have changed substantially, eliminating the thirdparty employer provision by which UCP was able to take advantage of the domesticservice-employment exception. See Home Care Ass'n of Am. v. Weil, 799 F.3d 1084, 1089 (D.C. Cir. 2015). Nevertheless, we apply the regulations applicable during the time period relevant to this case. -5- citation omitted). UCP bears the burden of prov[ing] that this exemption applies by demonstrating that [its] employees fit plainly and unmistakably within the exemption's terms and spirit. Id. (quotation, alterations, and citation omitted). In Welding, the Tenth Circuit set forth six factors for determining whether a dwelling is a private home under the FLSA regulations. 353 F.3d at 1219–20. These include (1) whether the client lived in the living unit as his or her private home before beginning to receive the services; (2) who owns the living unit, which may include a leasehold interest; (3) who manages and maintains the residence; (4) whether the client would be allowed to live in the unit if the client were not contracting with the provider for services; (5) the relative difference in the cost/value of the services provided and the total cost of maintaining the living unit (including government subsidies); and (6) whether the service provider uses any part of the residence for the provider's own business purposes. Id. Other courts have formulated additional factors, including whether significant public funding is involved; who determines who lives together in the home; whether residents live together for treatment purposes as part of an overall care program; the number of residents; whether the clients can come and go freely; whether the employer or the client acquires the furniture; who has access to the home; and whether the provider is a for profit or not for profit entity. Application of the Fair Labor Standards Act to Domestic Service, 78 Fed. Reg. 60462 (citing Johnston v. Volunteers of Am., Inc., 213 F.3d 559 (10th Cir. 2000); Linn v. Developmental Servs. of Tulsa, Inc., 891 F. Supp. 574 (N.D. Okla. 1995); Lott v. Rigby, 746 F. Supp. 1084 (N.D. Ga. 1990)). The factors employed in prior cases are somewhat helpful; but they fall short because of factual distinctions present here. In prior cases, the relevant comparison was between the employer and the client—the employer's commercial care facility or -6- the client's traditional single-family residence. See Welding, 353 F.3d at 1218; Johnston, 213 F.3d at 562–63; Linn, 891 F. Supp. at 578–79; Lott, 746 F. Supp. at 1085. But the dwelling units in this case involve the employee acting as an independent third party. Nevertheless, the discussion of private home in prior cases has revolved around this question: Does the employer own or control the home? See Welding, 353 F.3d at 1219 (holding that the key inquiries are who has ultimate management control of the living unit and whether the living unit is maintained primarily to facilitate the provision of assistive services); see also 29 C.F.R. § 552.101(a) (2014) (providing that a hotel or apartment can be a private home). In other words, if the client chooses to live in a dwelling controlled primarily by the employer, the dwelling probably is not the client's private home. If the client maintains control—or has delegated control to a third party—it probably is a private home. All of the clients in this case chose a living arrangement subject to some measure of control by a thirdparty who also happens to work for UCP. From an employer's perspective—the relevant perspective for purposes of the FLSA—it is irrelevant whether a client maintains a dwelling unit or pays a landlord to do so. In either case, the employer is providing companionship services for the client in a private home. Although the district court's analysis of the dwelling units used different terminology, it was certainly focused on employer control of the living arrangement. In this case, every client lived in a dwelling that was private in relation to UCP. UCP did not exert control over the room in which a client lived, the rent paid, or any other term or condition of the living arrangement. UCP did not require a client to live in a specific dwelling unit in order to receive services. Further, while UCP may have acted to facilitate a connection between a client and the caregiver, UCP's involvement was limited to making the connection. Finally, UCP had no ability to evict any client if the client ceased to use UCP's services. -7- Additionally, many of the clients in this case paid rent. The rental agreements ranged from a written, long-term lease to an informal at-will tenancy, with some clients paying several hundred dollars each month. Moreover, many of the clients rented a specific room—or even a separate building—that constituted an identifiable dwelling unit within the property as a whole. Such arrangements render the clients tenants, or subtenants, and confer upon them a legally significant interest in the dwelling unit—even if that unit constitutes only a part of a traditional single-family residence. In sum, the district court correctly granted summary judgment to UCP, concluding that the dwelling units in which the employees provided services were private homes.