Court Opinion

ID: 2969280
Source: CourtListenerOpinion
Date Created: 2015-09-22 15:45:48.156529+00
Date Added: 2024-06-11T11:43:23.473329
License: Public Domain

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12     Fazekas, et al. v. The Cleveland                     No. 99-3059                         Pursuant to Sixth Circuit Rule 206
       Clinic Foundation                                                                ELECTRONIC CITATION: 2000 FED App. 0070P (6th Cir.)
                                                                                                    File Name: 00a0070p.06

                            CONCLUSION
   We conclude that the district court was correct in finding                   UNITED STATES COURT OF APPEALS
that the defendant in this case adequately demonstrated that                                      FOR THE SIXTH CIRCUIT
the plaintiffs were engaged in a “bona fide . . . professional                                      _________________
capacity” pursuant to the Department of Labor regulations,
both because the plaintiffs’ duties required advanced
                                                                                                                  ;
knowledge and discretion and because they were paid on a fee
                                                                                                                   
basis, as that term has been interpreted by the Administrator                    MARCIA FAZEKAS; CAROLE
                                                                                                                   
of the Department’s Wage and Hour Division. In other                             LELAND; CAROL PERNELL;
                                                                                                                   
circumstances, however, the work of nurses performing home                       SUSAN SHELKO; REBECCA
                                                                                                                   
health care visits may indeed become merely “a series of jobs                                                         No. 99-3059
                                                                                 WINFIELD,
                                                                                                                   
which are repeated an indefinite number of times,” 29 C.F.R.                                                        >
                                                                                         Plaintiffs-Appellants,
                                                                                                                   
§ 313(b), and in such cases those nurses would not qualify for

                                                                                                                   
the professional exemption.

                                                                                                                   
                                                                                           v.

                                                                                                                   
  The judgment of the district court is AFFIRMED.

                                                                                                                   
                                                                                 THE CLEVELAND CLINIC
                                                                                                                   
                                                                                 FOUNDATION HEALTH CARE
                                                                                 VENTURES, INC.,                   
                                                                                          Defendant-Appellee. 
                                                                                                                  1
                                                                                      Appeal from the United States District Court
                                                                                     for the Northern District of Ohio at Cleveland.
                                                                                   No. 97-01394—Patricia A. Gaughan, District Judge.

good faith in conformity with and in reliance on any written                                      Argued: December 15, 1999
administrative regulation, order, ruling, approval, or interpretation” of the
regulations by the Administrator of the Wage and Hour Division. See 29                       Decided and Filed: February 25, 2000
U.S.C. § 259(a), (b)(1); 29 C.F.R. §§ 790.13, 790.19. Square D is typical
in its holding that an employer may not assert the defense based on the
opinion of a lower Wage and Hour Division official, in that case a                Before: NELSON and DAUGHTREY, Circuit Judges;
Regional Director, where both the statute and the regulations refer to                     BERTELSMAN, District Judge.*
reliance on the Administrator’s writings. See Square D, 459 F.2d at 810-
11. Although plaintiffs here do not, of course, argue the affirmative
defense, in effect they seek to rely upon the internal memorandum as
persuasive evidence of the Department’s stance regarding home health
care nurses and the professional exemption. We note that the Department             *
itself does not join the plaintiffs, either as intervenor or as amicus, in            The Honorable William O. Bertelsman, United States District Judge
making this argument.                                                           for the Eastern District of Kentucky, sitting by designation.

                                                                                                                  1
2    Fazekas, et al. v. The Cleveland           No. 99-3059      No. 99-3059                Fazekas, et al. v. The Cleveland           11
     Clinic Foundation                                                                                    Clinic Foundation

                   _________________                             appears to us that the work performed during each home
                                                                 health care visit, given the number of different circumstances
                        COUNSEL                                  unique to each patient’s treatment plan as that patient
                                                                 progresses, is closer to the work performed by a singer, who
ARGUED: Morris L. Hawk, GOLDSTEIN & ROLOFF,                      may, after all, perform the same song or set of songs over and
Cleveland, Ohio, for Appellants. Richard A. Millisor,            over again during a series of performances, or that of an
MILLISOR & NOBIL, Cleveland, Ohio, for Appellee.                 illustrator, who may similarly repeat the same drawings or set
ON BRIEF: Morris L. Hawk, David Roloff, GOLDSTEIN                of drawings as necessary, than it is to the payments for
& ROLOFF, Cleveland, Ohio, for Appellants. Richard A.            “piecework” described in the regulations as payments not on
Millisor, MILLISOR & NOBIL, Cleveland, Ohio, Mary                a “fee basis.”
Adele Springman, DAVID G. HILL & ASSOCIATES,
Cleveland, Ohio, for Appellee.                                      We acknowledge that the result we reach here is not
                                                                 consistent with the 1998 opinion letters issued by Division
                   _________________                             personnel as to the uniqueness of the work of home health
                                                                 care nurses. Yet, these letters are themselves inconsistent, not
                       OPINION                                   just with the 1992 letter but also with other, more recent
                   _________________                             opinion letters tending to exempt registered nurses from the
                                                                 Act’s overtime-pay provisions, given the duties that these
  MARTHA CRAIG DAUGHTREY, Circuit Judge. The                     health care professionals often perform. See Opinion Letter,
plaintiffs in this action are registered nurses formerly         Wage and Hour Division, United States Dep’t of Labor, 1999
employed by the defendant, Cleveland Clinic Foundation           WL 10002385 at *2 (1999); Opinion Letter, Wage and Hour
Health Care Ventures, Inc. They sued, alleging violation of      Division, United States Dep’t of Labor, 1999 WL1002374 at
the Fair Labor Standards Act, 29 U.S.C. §§ 201-219 (1994),       *3-*4 (1999). We note the holdings of this court and of our
for failure to pay for overtime work, and they demanded back     sister courts that the written opinions of the Administrator or
pay, liquidated damages, and attorneys’ fees. The defendant      his deputies constitute the most reliable interpretations of the
moved for summary judgment on the issue of its liability         Department’s regulations. See Hodgson v. Square D Co., 459
under the Act, and the plaintiffs in turn filed a cross-motion   F.2d 805, 810-11 (6th Cir. 1972); see also Roy v. County of
for summary judgment. The district court granted the             Lexington, 141 F.3d 533, 543 (4th Cir. 1998); Reich v. IBP,
defendant’s motion and denied that of the plaintiffs. For the    Inc., 38 F.3d 1123, 1126 (10th Cir. 1994); Bouchard v.
reasons set out below, we affirm the judgment of the district    Regional Governing Bd. of Region V Mental Retardation
court granting summary judgment to the defendant.                Servs., 939 F.2d 1323, 1328 (8th Cir. 1991); Cole v. Farm
    PROCEDURAL AND FACTUAL BACKGROUND                            Fresh Poultry, Inc., 824 F.2d 923, 926 (11th Cir. 1987).3

   Plaintiffs Marcia Fazekas, Carole Leland, Carole Pernell,
Susan Shelko, and Rebecca Winfield, registered nurses            nurses according to a ‘per visit’ arrangement.”
formerly employed by the defendant, performed home health            3
care visits for patients in the Cleveland metropolitan area            These cases interpret § 10 of the Portal-to-Portal Act, 29 U.S.C.
during 1995 and 1996. These visits generally involved            § 259 (1994), and accompanying regulations which provide an affirmative
                                                                 defense to employers charged with violations of the minimum wage and
treating patients for diagnosed medical conditions, designing    overtime pay provisions of the Fair Labor Standards Act if they relied “in
10       Fazekas, et al. v. The Cleveland              No. 99-3059       No. 99-3059            Fazekas, et al. v. The Cleveland       3
         Clinic Foundation                                                                                    Clinic Foundation

  ...                                                                    health care protocols for individual patients, and educating the
                                                                         patients and their families regarding participation in ongoing
  Q: Each patient visit, each treatment is unique?                       treatment. The plaintiffs also supervised home health care
                                                                         visits made by licenced practical nurses and kept
  A. Yes.                                                                administrative records for all visits to patients under their
                                                                         care.
While the internal memorandum’s characterization of the
work that home care nurses perform as “a series of jobs which              The plaintiffs’ individual employment relationships with
are repeated an indefinite number of times” may correlate                the defendant were defined by signed employment
with the professional activities of the licenced practical nurses        agreements. As set forth in each standard agreement, the
supervised by the plaintiffs, it does not appear to describe the         scheduling of a registered nurse’s home health care visits was
unique circumstances confronting the plaintiffs themselves               governed by the “25/15 Plan,” which required each nurse to
during each patient visit.                                               make at least 25 visits to patients and be on call at least 15
                                                                         hours per week. Patients beginning a course of home health
   The plaintiffs focus attention on the observation in the              care treatments would be screened initially by a Health Care
internal memorandum that the Department of Labor                         Ventures nursing supervisor, who would then assign each
regulations’ use of singers, artists, and illustrators as                patient to one of the registered nurses performing home visits.
examples of professionals compensated on a fee basis                     Each nurse would then be responsible for developing an
suggests “that the character or nature of the job itself must be         initial treatment plan for her new patient and scheduling all
unique, and not simply that the performance of the job vary              necessary home visits in accordance with that plan. Health
from day to day.” The memorandum recognizes that the use                 Care Ventures provided guidelines for the patients’ home visit
of the examples in 29 C.F.R. § 541.313(d) was most likely                schedules, but the nurses themselves devised each patient’s
intended to illustrate how the adequacy of a fee payment must            individual treatment plan and were responsible for subsequent
be determined -- by calculating whether each fee payment is              revisions in treatment protocols.
at a rate which would, in the aggregate, amount to at least
$170 per week -- and that the regulations do not indicate that             The nurses were compensated on a “per-visit” basis.
only professions with some relation to artistic endeavors may            Pursuant to an attachment to the employment agreement, the
be compensated on a fee basis so as to qualify for the                   nurses received $30 for each home visit during periods when
exemption.                                                               they were not “on call”, and $32 per visit when “on call.”
                                                                         The agreements were modified from time to time, so that
  As the author of the 1994 internal memorandum observed,                eventually the nurses also received $37 for each visit
the promulgators of the Department’s regulations, written in             involving any infusion therapy, and $50 for each initial
1973, probably did not contemplate the home health care                  assessment of a new patient. These payments included
industry and its per-visit means of compensating health care             compensation for all attendant transportation and
providers, apparently the industry standard.2 Nevertheless, it           administrative duties connected with the actual visits
                                                                         themselves.
     2                                                                     The “25/15 Plan” was apparently designed to approximate
     Appellees in their brief before this court note that “[i]n the
Cleveland area, alone, nine out of twelve contacted Medicare certified   a 40-hour work week. Nevertheless, the plaintiffs contended
agencies who provide home health care services pay their registered
4    Fazekas, et al. v. The Cleveland            No. 99-3059      No. 99-3059             Fazekas, et al. v. The Cleveland       9
     Clinic Foundation                                                                                  Clinic Foundation

that they regularly made more than 25 total visits per week       Skidmore, 323 U.S. at 140.
and generally documented between 50-80 hours per week of
work done in conjunction with these visits. Regardless of           The district court held that the 1992 written opinion of the
whether the plaintiffs worked more than 40 hours during any       Acting Administrator, and not the 1994 internal
one week, they still received the standard per-visit fee for      memorandum, represented the Department’s position on the
each home visit.                                                  question at issue in this case. We agree with the district court
                                                                  that the Acting Administrator’s 1992 opinion letter is a
  The plaintiffs were all separated from employment with          controlling interpretation, that it is not inconsistent with the
Health Care Ventures on or about November 4, 1996. In             language of the regulation nor plainly erroneous, and that it
1997, they filed a complaint in federal district court alleging   therefore meets the tests of Auer and Skidmore as persuasive
that Health Care Ventures violated the Fair Labor Standards       legal authority in this case.
Act by not paying them time-and-a-half for hours worked in
excess of 40 hours per week. In addressing the cross-motions         This result is supported by the plaintiffs’ undisputed
for summary judgment, the district court held that the            deposition testimony as to the uniqueness of each home health
defendant had satisfactorily shown that the plaintiffs were       care visit made while under the defendant’s employ. Each
exempt from the overtime requirements of the Act because          plaintiff testified that she was required to evaluate her
they were “employed in a bona fide . . . professional capacity”   patient’s medical conditions during her initial visit, devise a
as that term has been construed by the Department of Labor.       treatment plan, and then make revisions to that plan as
The court thus granted the defendant’s summary judgment           necessary during subsequent visits. The plaintiffs estimated
motion, in an order that the plaintiffs now appeal.               that each patient might have as many as five distinct
                                                                  conditions requiring uniquely coordinated care. Even similar
                       DISCUSSION                                 conditions may require different treatments depending on the
                                                                  severity of the condition and, in the case of wounds or ulcers,
  Under the Fair Labor Standards Act, employers must pay          its location on the patient’s person. During the course of each
employees time-and-a-half for all hours worked over 40 hours      visit, a patient’s medical condition and corresponding
per week. See 29 U.S.C. § 207(a)(1). Persons employed in          treatment could change. The patient’s family status,
a “bona fide . . . professional capacity,” however, are           educational level, and home environment all contribute to
exempted from the overtime pay requirements. 29 U.S.C.            making each visit distinct from all other visits, as does the
§ 213(a)(1). The Act gives the Secretary of Labor the power       input from each patient’s treating physician. Given the
to determine which jobs qualify as bona fide professional         plaintiffs’ testimony that all these factors contribute to
employment. See id. In general, however, the professional         making each patient’s course of treatment unique, it is
exemption is to be narrowly construed to further Congress’s       unsurprising that plaintiff Parnell testified that each visit was
goal of providing broad federal employment protection. See        indeed unique:
Mitchell v. Lublin, McGaughy & Assocs., 358 U.S. 207, 211
(1959).                                                             Q: So in light of all the above, you would agree,
                                                                    wouldn’t you, that each patient treatment, each visit
  Labor Department regulations construing and enforcing the         really is unique from the other visit?
Act outline several requirements for employment purported
to be “professional” in nature:                                     A: Yes, it is.
8      Fazekas, et al. v. The Cleveland            No. 99-3059     No. 99-3059            Fazekas, et al. v. The Cleveland       5
       Clinic Foundation                                                                                Clinic Foundation

    and assessments based on his or her skills in providing          The term employee employed in a bona fide . . .
    patient care on each visit, such work is not unique in           professional capacity shall mean any employee:
    character because unlike work performed by a singer,
    artist, or illustrator, the work performed by the nurse is       (a) Whose primary duty consists of the performance of
    generally repetitive and not original in character.              . . . [w]ork requiring knowledge of an advance type in a
                                                                     field of science or learning customarily acquired by a
During the pendency of this appeal, the plaintiffs have              prolonged course of specialized intellectual instruction
submitted two additional opinion letters, dated April 27,            and study . . . and
1998, and November 9, 1998, and signed by a member of the
Division’s Office of Enforcement Policy Fair Labor Standards         (b) Whose work requires the consistent exercise of
Team. Both of these letters draw the same conclusion as the          discretion and judgment in its performance; and
1994 internal memorandum. However, as of the date of oral
argument in this case, the Administrator of the Wage and             (c) Whose work is predominantly intellectual and varied
Hour Division has not issued an opinion contrary to the              in character (as opposed to routine mental, manual,
position taken by the Administrator in 1992, to the effect that      mechanical, or physical work) and is of such character
supervising nurses in a situation such as the one now before         that the output produced or the result accomplished
us are exempt employees.                                             cannot be standardized in relation to a given period of
                                                                     time; and . . .
  In deciding which of these opinions, issued by the Division
during different administrations, may help decide this case,         (e) Who is compensated for services on a salary or fee
we note that not all opinion letters of an administrative agency     basis at a rate of not less than $170 per week . . . .
are worthy of deference by the courts. However, the Supreme
Court has indicated that an opinion of the Administrator of        29 C.F.R. § 541.3 (1999). In a dispute over whether overtime
the Wage and Hour Division of the Department of Labor has          should have been paid, the employer bears the burden of
persuasive value if the position of the Administrator is well-     showing that the professional exemption applies to the
considered and well-reasoned. In Skidmore v. Swift & Co.,          employees. See Corning Glass Works v. Brennan, 417 U.S.
323 U.S. 134, 140 (1944), the Court noted:                         188, 196-97 (1974); Michigan Ass’n of Governmental
                                                                   Employees v. Michigan Dep’t of Corrections, 992 F.2d 82, 83
    We consider the rulings, interpretations and opinions of       (6th Cir. 1993). In this case, the plaintiffs concede that their
    the Administrator under the Fair Labor Standards Act,          work as registered nurses making home health care visits
    while not controlling upon the courts by reason of their       required knowledge of an advanced type and the consistent
    authority, do constitute a body of experience and              exercise of discretion and judgment and that it was
    informed judgment to which courts and litigants may            predominantly intellectual and varied in character. They
    properly resort for guidance. The weight of such a             contest whether Health Care Ventures has shown that they
    judgment in a particular case will depend upon the             were paid on a “fee basis.”
    thoroughness evident in its consideration, the validity of
    its reasoning, its consistency with earlier                      According to the Department of Labor regulations, courts
    pronouncements, and all those factors which give it            should encounter “[l]ittle or no difficulty” in determining
    power to persuade, if lacking power to control.                whether a particular employment arrangement involves
                                                                   payment on a fee basis:
6        Fazekas, et al. v. The Cleveland                 No. 99-3059        No. 99-3059             Fazekas, et al. v. The Cleveland          7
         Clinic Foundation                                                                                         Clinic Foundation

    Such arrangements are characterized by the payment of                    health care services to clients in their homes. According to
    an agreed sum for a single job regardless of the time                    the employer, “no employee will perform what is essentially
    required for its completion. These payments in a sense                   a single repetitive task . . . over and over. Each patient’s
    resemble piecework payments with the important                           needs and situation [would be] different, and would be
    distinction that generally speaking a fee payment is made                individually assessed and treated by the employee as the
    for the kind of job which is unique rather than for a series             employee deems necessary during each visit. The employees
    of jobs which are repeated an indefinite number of times                 must use independent, professional and largely unsupervised
    and for which payment on an identical basis is made over                 judgment on a case-by-case basis.” In a written opinion letter,
    and over again.                                                          the Acting Administrator agreed that these positions would
                                                                             meet the exemption requirements of 29 C.F.R. § 541.3 and,
29 C.F.R. § 541.313(b).1 In this case, the plaintiffs were paid              in particular, that the per-visit pay plan would qualify as
an agreed-upon sum for each visit regardless of the time spent               compensation on a fee basis within the meaning of 29 C.F.R.
on each visit. The parties dispute, however, whether home                    § 541.313.
health care visits are “unique” and thus whether per-visit
payment for these visits can be considered payment on a fee                    In response, the plaintiffs offer an internal memorandum
basis. Heeding the Supreme Court’s command that the                          dated October 1, 1994, from counsel for the Wage and Hour
Secretary’s interpretation of Department of Labor regulations                Division in response to a request from the National
is controlling unless “plainly erroneous or inconsistent with                Association for Home Care for a formal opinion as to whether
the regulation,” Auer v. Robbins, 117 S. Ct. 905, 911 (1997)                 per-visit compensation of a registered nurse making home
(citations omitted), both parties present Department of Labor                visits constitutes a fee basis of payment under the Department
documents that purportedly articulate the Department’s                       of Labor regulations. In its letter, the Association argues that
official position regarding the uniqueness of each home health               each visit made by a registered nurse to a patient’s home is
care visit.                                                                  necessarily unique. In the response, counsel for the
                                                                             Department’s Wage and Hour Division disagreed,
  Health Care Ventures offers as evidence the June 1992                      concluding:
response of the Acting Administrator of the Wage and Hour
Division of the Department to a request for advice from                        [W]e think that payment on a “per visit” basis is probably
counsel for an employer operating a home health care service.                  not the type of fee payment arrangement contemplated by
In its request for advice, the employer described a scenario in                the regulations. Section 541.313(d) refers to payment
which it paid registered nurses on a per-visit basis to provide                methods made to singers, artists, and illustrator/writers to
                                                                               demonstrate the adequacy of a fee payment, i.e., whether
                                                                               the amount of payment meets the regulation’s
     1
                                                                               requirement that the rate of pay is “not less than $170 per
      Section 541.313 continues, stating that the adequacy of a fee            week to a professional employee”. The use of these
payment to a professional employee will be determined by “whether the          professional occupations to demonstrate this point
payment is at a rate which would amount to at least $170 per week . . . if     suggests to us that the character or nature of the job itself
40 hours were worked.” 29 C.F.R. § 541.313(c). The regulations then
offer examples of how the adequacy of fee payments may be calculated,          must be unique, and not simply that the performance of
including scenarios featuring a singer receiving $50 for performing a          the job vary from day to day. While we recognize that
song, an artist receiving $100 for painting a picture, and an illustrator      the nurse will necessarily make professional judgments
receiving $150 for completing a pamphlet. See 29 C.F.R. § 541.313(d).