Fazekas v. Clev Clinic ( 2000 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
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
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_________________ 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
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... 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
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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.
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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:
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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).