Long Island Care at Home, Ltd. v. Coke

Supreme Court of the United States · 2007 · Administrative Law

Administrative LawFair Labor Standards Actdomestic service employmentcompanionship servicesthird-party regulationDepartment of Laborgap-filling authorityagency interpretation of own regulations

Facts

The FLSA exempts from minimum wage and overtime rules certain employees employed in domestic service employment to provide companionship services, with those terms to be defined and delimited by the Secretary of Labor's regulations. After the 1974 amendments, the Department of Labor issued one regulation defining domestic service employment and another regulation stating that exempt companionship workers include those employed by an employer or agency other than the family or household using their services. Evelyn Coke provided companionship services to elderly and infirm persons while employed by Long Island Care at Home, a third-party agency. Her FLSA claim depended on whether the statutory exemption applied to companionship workers paid by third-party employers.

Issue

Whether the Department of Labor's regulation providing that the FLSA companionship-services exemption includes workers employed by third-party agencies is valid and legally binding despite the statute's text and history, an apparently conflicting DOL regulation, the regulation's placement in a section labeled "Interpretations," and objections to the rulemaking process.

Rule

When Congress expressly leaves definitional gaps in a statute and authorizes an agency to fill them by regulation, a reasonable regulation adopted through appropriate procedures is legally binding under Chevron. An agency's interpretation of its own regulations is controlling unless plainly erroneous or inconsistent with the regulations. In notice-and-comment rulemaking, the final rule must be a logical outgrowth of the proposed rule and supported by a reasonable explanation.

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Congress amends a federal labor statute to exempt "personal support services" workers, adding that the terms "household employment" and "personal support services" are to be "defined and delimited by regulations of the Secretary of Labor." After full notice and comment, the Department issues a rule in Washington, D.C., providing that the exemption includes workers paid by staffing agencies in Phoenix as well as workers paid directly by families.

A worker employed by Desert Willow Care Staffing sues for overtime, arguing the statute itself unambiguously excludes agency-paid workers because the amendment's overall purpose was to expand wage protection. How should a court most likely rule?

Explanation. When Congress expressly leaves definitional gaps in a statute and authorizes an agency to define and delimit the relevant terms, a reasonable regulation adopted through proper procedures is legally binding. The majority treated whether third-party-paid workers fall within the exemption as one of those delegated details, despite arguments about the amendment's broad protective purpose. Because the agency addressed an interstitial matter within its expertise and used notice-and-comment rulemaking, the rule is entitled to Chevron-style deference and should be upheld.