Frederic Fezard v. United Cerebral Palsy etc. , 809 F.3d 1006 ( 2016 )

United States Court of Appeals
For the Eighth Circuit
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No. 14-3601
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Frederic Fezard; Lisa Fezard, Individually and on behalf of all others similarly situated
lllllllllllllllllllll Plaintiffs - Appellants
v.
United Cerebral Palsy of Central Arkansas, doing business as United Cerebral
Palsy of Arkansas
lllllllllllllllllllll Defendant - Appellee
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Appeal from United States District Court
for the Eastern District of Arkansas - Little Rock
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Submitted: September 23, 2015
Filed: January 5, 2016
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Before MURPHY, MELLOY, and SMITH, Circuit Judges.
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SMITH, Circuit Judge.
This case requires us to construe the phrase "private home" in a regulatory
provision of the Fair Labor Standards Act (FLSA). The relevant provision exempts
employers from paying overtime wages to domestic service employees who provide
companionship services in a "private home." 29 U.S.C. § 213(a)(15);
29 C.F.R. § 552.3 (2014). The employees in this case provide services on behalf of
their employer, United Cerebral Palsy of Central Arkansas (UCP), to people who
reside in the employees' private residences. The employees, led by Lisa and Frederic
Fezard, filed this suit seeking overtime pay from UCP, contending that the living
arrangement requires additional work time that should be compensated as overtime.
Ms. Fezard has also claimed that UCP terminated her in retaliation for filing a
complaint with the Department of Labor (DOL). The district court1 granted summary
judgment to UCP, concluding that the homes in which the employees provided
services were "private homes" under the FLSA and that Ms. Fezard failed to establish
pretext in response to the legitimate, nonretaliatory reasons that UCP provided for her
termination. We affirm.
I. Background
UCP is a nonprofit organization that provides services to disabled persons.
UCP employees provide companionship services to UCP's clients at each client's
place of residence. But instead of living on their own or with family members, the
clients in this case live with the UCP employees who provide their care. The
employees have opened their homes and invited their clients to live as roommates or
surrogate family members.
UCP has not dictated that its employees and clients live together. It does not
mandate that clients move into its employees' homes when they become a UCP client.
It does not require them to move out when they stop receiving UCP services. And it
does not control the details of the living arrangement, such as how much rent a client
must pay to live with the employee. Instead, the living arrangements are between the
client and the employee acting as an independent third party—a relationship over
which UCP has exerted no control.
1
The Honorable James M. Moody Jr., United States District Judge for the
Eastern District of Arkansas.
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Pursuant to the domestic-service-employment exception of the FLSA,
29 U.S.C. § 213(a)(15), UCP pays the employees a flat daily rate without overtime.
On March 5, 2012, Ms. Fezard sent an e-mail to UCP demanding that UCP increase
her daily rate from $160 to $200. On March 9, UCP paid her the $160 rate. On March
12, Ms. Fezard told UCP that she had filed a complaint with the DOL. UCP
terminated her on March 15. Unknown to UCP, Ms. Fezard had not actually filed the
complaint.
Prior to her termination, Ms. Fezard experienced other problems with UCP.
Three months before her termination, she wrote a "very hostile and accusatory" e-
mail. In a discussion with UCP's CEO about the e-mail, she told him, "I have no
respect for anybody here at UCP." UCP considered terminating her at that time on the
basis of her insubordination but it decided to continue her employment because her
stepson was a UCP client. Then on February 23, 2012, just weeks before her
termination, a state inspector conducted a home visit for one of Ms. Fezard's clients;
the home inspection revealed numerous performance deficiencies and concerns for
the client's welfare. UCP asserts that it terminated Ms. Fezard on the basis of her
insubordination and deficient performance, not her alleged complaint to the DOL.
The Fezards filed this collective action, seeking certification of an opt-in class
of UCP employees. The district court certified the class, and ten other employees
joined the litigation. As a class, the employees sought overtime pay under the FLSA
and the Arkansas Minimum Wage Act. Ms. Fezard also alleges that UCP wrongfully
terminated her in retaliation for filing a complaint with the DOL. The district court
granted summary judgment to UCP on all claims. The employees appeal. We have
jurisdiction to review the final judgment of the district court pursuant to
28 U.S.C. § 1291.
II. Discussion
The employees challenge the district court's summary judgment on appeal,
arguing that they did not provide services in a "private home" under the FLSA. And
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Ms. Fezard argues that she has satisfied a prima facie claim for employment
retaliation and therefore that the district court's summary judgment was improper.
"We review de novo a grant of summary judgment, considering the facts in the light
most favorable to the nonmoving party. Summary judgment is proper when no
genuine issues of material fact exist and the moving party is entitled to judgment as
a matter of law." Neb. Beef, Ltd. v. Wells Fargo Bus. Credit, Inc., 470 F.3d 1249,
1251 (8th Cir. 2006) (quotation and citation omitted).
A. A "Private Home" Under the FLSA
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).
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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 third-
party employer provision by which UCP was able to take advantage of the domestic-
service-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.
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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
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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 third-
party 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.
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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.
B. Employment Retaliation
The district court granted summary judgment to UCP because Ms. Fezard did
not provide evidence that she filed her claim with the DOL before she was terminated
and because she did not establish that the legitimate, nonretaliatory reasons that UCP
provided for her termination were pretextual. Ms. Fezard successfully challenges the
timing of her DOL claim, but she has not rebutted the legitimate, nonretaliatory basis
for her termination. Accordingly, we affirm.
Ms. Fezard's employment-retaliation claim is evaluated under the McDonnell
Douglas burden-shifting framework. See Smith v. Allen Health Sys., Inc.,
302 F.3d 827, 832 (8th Cir. 2002) (citing McDonnell Douglas Corp. v. Green, 411
U.S. 792, 802–03 (1973)). Under this framework, she must establish a prima facie
claim of retaliation to survive summary judgment by providing evidence from which
a jury could conclude that (1) she engaged in a protected activity, (2) she suffered an
adverse employment action, and (3) a causal connection exists between her protected
activity and the adverse employment action. Id. But if UCP comes forward with
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evidence of a legitimate, nonretaliatory basis for the adverse employment action, she
must then point to some evidence that UCP's asserted basis is pretextual. Id. at 833.
The district court found that Ms. Fezard failed to establish that she engaged in
a protected activity. The court noted that Ms. Fezard did not file a report with the
DOL until after UCP terminated her. But the district court also found that on March
12, 2012, before her termination, Ms. Fezard told UCP employees that she had filed
a DOL complaint. In Saffels v. Rice, 40 F.3d 1546 (8th Cir. 1994), we addressed
"[t]he sole question . . . [of] whether § 15(a)(3) of the FLSA protects employees who
are terminated from their employment based on their employer's mistaken belief that
they reported violations of the law to the authorities or otherwise engaged in
protected activity." Id. at 1548. We held that the FLSA protects an employee when
an employer mistakenly believes that she has engaged in a protected activity.
Id. at 1549. Accordingly, we conclude that Ms. Fezard satisfied the protected-activity
element of a prima face case for retaliatory termination because UCP could well have
believed that she had filed the DOL complaint based on her March 12, 2012
statement. And because UCP terminated her just three days later, she also satisfied
the adverse-employment-action and causal-connection elements of the prima facie
case. See Smith, 302 F.3d at 833.
The prima facie analysis, however, does not end the inquiry. The district court
concluded that UCP had provided evidence of a legitimate, nonretalitory basis for
terminating Ms. Fezard. In particular, the district court recited several instances of
unprofessional and insubordinate communication from Ms. Fezard; a significant,
unfavorable performance report from a state inspector who conducted a home visit
for one of Ms. Fezard's clients; and written evidence that UCP was considering her
termination before she told them about the DOL report. In short, Ms. Fezard was not
performing and was creating significant unrest within the organization. Ms. Fezard
argues that the bases asserted by UCP are pretextual, pointing to the close proximity
of her notice to UCP of her DOL claim and her termination. Although we have held
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that timing may be sufficient to make out a prima facie case, it is not enough to
undermine a preexisting, nonretaliatory basis for the termination. Id. at 834. Here,
Ms. Fezard fails to put forth evidence beyond temporal proximity to show that a
material fact dispute remains as to her termination.
The district court correctly granted summary judgment to UCP because Ms.
Fezard failed to provide evidence from which a jury could conclude that the
nonretaliatory bases for termination asserted by UCP are pretextual.
III. Conclusion
Accordingly, we affirm the judgment of the district court.
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