Long Island Care v. Coke
127 S. Ct. 2339 (2007)
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Rule of Law:
An agency regulation is valid and binding if it represents a reasonable interpretation to fill a statutory gap Congress left for the agency to define, even if it appears to conflict with another of the agency's general regulations, so long as the agency utilized proper notice-and-comment rulemaking procedures.
Facts:
- In 1974, Congress amended the Fair Labor Standards Act (FLSA) to extend minimum wage and overtime protections to most 'domestic service' employees.
- The 1974 amendments simultaneously created an exemption 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'.
- The statute explicitly authorized the Secretary of Labor to define and delimit the terms used in the exemption.
- The Department of Labor (DOL) promulgated a general regulation defining 'domestic service employment' as services performed in the home of the person by whom the employee is employed.
- The DOL also issued a more specific regulation, labeled an 'interpretation', stating that the companionship services exemption includes workers who are employed by a third-party agency rather than by the household using their services.
- Evelyn Coke worked as a home health aide providing 'companionship services' to elderly and infirm individuals.
- Coke was employed and paid by Long Island Care at Home, Ltd., a third-party agency, not by the individuals for whom she cared.
- Relying on the DOL's third-party regulation, Long Island Care at Home did not pay Coke federal minimum wage or overtime pay.
Procedural Posture:
- Evelyn Coke filed a lawsuit against her employer, Long Island Care at Home, Ltd., in the U.S. District Court for the Eastern District of New York for alleged violations of the FLSA.
- The District Court granted the employer's motion to dismiss, holding that the Department of Labor's third-party regulation was valid and barred Coke's claim.
- Coke, as appellant, appealed to the U.S. Court of Appeals for the Second Circuit.
- The Second Circuit reversed the trial court, finding the regulation to be an 'unenforceable' interpretation that was not entitled to deference.
- Long Island Care at Home, as petitioner, sought a writ of certiorari from the U.S. Supreme Court.
- The Supreme Court granted the petition, vacated the Second Circuit's judgment, and remanded the case for reconsideration in light of a newly issued DOL Advisory Memorandum.
- On remand, the Second Circuit reinstated its prior judgment, again holding the regulation unenforceable.
- Long Island Care at Home again petitioned the U.S. Supreme Court for a writ of certiorari, which the Court granted.
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Issue:
Is the Department of Labor regulation that exempts 'companionship services' workers employed by third-party agencies from the Fair Labor Standards Act's minimum wage and overtime requirements a valid and binding interpretation of the statute?
Opinions:
Majority - Justice Breyer
Yes. The Department of Labor's regulation is a valid and binding interpretation of the statute because it is a reasonable exercise of the agency's congressionally delegated authority to fill a statutory gap. The FLSA's text is ambiguous regarding third-party employment, and it explicitly grants the Department the power to define the scope of the companionship services exemption. The Department's decision to exempt third-party-employed companionship workers is a reasonable policy choice within that grant of authority. Although this specific regulation (29 CFR § 552.109(a)) appears to conflict with a more general regulation defining 'domestic service employment' (§ 552.3), the specific regulation governs the general one. Furthermore, the agency's interpretation of its own conflicting regulations is entitled to deference unless plainly erroneous. The regulation is binding under Chevron because the Department used full notice-and-comment rulemaking procedures, the rule sets forth important individual rights and duties, and it falls within the statutory grant of authority, indicating it is a legislative rule intended to have the force of law, regardless of its 'interpretation' label.
Analysis:
This decision strongly reaffirms the principles of Chevron deference, giving significant leeway to administrative agencies to interpret ambiguous statutes they administer. It clarifies that an agency's characterization of a rule as an 'interpretation' is not dispositive; the use of formal notice-and-comment procedures is a strong indicator that the agency intended the rule to have the binding force of law. The Court's method for resolving conflict between an agency's own regulations—by favoring the specific over the general and deferring to the agency's reasonable resolution—provides a clear framework for future cases. This ruling had a significant real-world impact by validating the exemption of millions of home care workers employed by third-party agencies from federal wage and hour protections, a policy the DOL would later reverse through new rulemaking.
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