This case involves an enforcement proceeding brought by the U.S. Department of Labor against Americare Healthcare Services, Inc., and its owner, Dilli Adhikari. Americare operates a home care agency in Ohio that provides services to elderly or disabled clients through Medicaid waiver programs. The agency's business model relies heavily on hiring Nepali workers to care for their own family members, a practice driven by cultural and religious beliefs. The Department alleged that Americare violated the Fair Labor Standards Act (FLSA) by failing to pay overtime wages to these live-in workers between October 2018 and October 2021. Under the FLSA, employers must generally pay overtime for hours worked over 40 in a week, but the statute provides exemptions for certain domestic service workers, including those providing 'companionship services' and 'live-in' workers. In 2013, the Department of Labor issued a regulation stating that third-party employers, like Americare, could not claim these exemptions. Americare and Adhikari challenged the validity of this 2013 regulation under the Administrative Procedure Act, arguing the Secretary lacked the authority to exclude third-party employers. They also attempted to challenge a separate regulation that narrowed the definition of 'companionship services,' but the district court found they lacked standing to do so. The district court granted summary judgment to the Department, and the Sixth Circuit reviewed the validity of the 2013 regulation and the standing issue.
The Sixth Circuit applied the three-step framework for express delegations established in Loper Bright Enterprises v. Raimondo. First, the court determined the delegation was constitutional, finding that the FLSA's text provides an 'intelligible principle' by instructing the Secretary to 'define and delimit' the terms 'domestic service employment' and 'companionship services.' Second, the court defined the boundaries of this authority, noting that the Supreme Court's decision in Long Island Care at Home, Ltd. v. Coke (2007) explicitly held that the Secretary's authority to define these terms includes the power to decide whether to include workers paid by third parties. The court clarified that Loper Bright did not overrule Coke's statutory interpretation because Coke was based on express delegation, not the implied delegation framework of Chevron. Third, the court found the Department's 2013 regulation was a reasoned exercise of this authority. The Department explained that the home care industry had transformed from institutional care to professional home care, necessitating a change in policy to ensure workers were protected by overtime laws. The court rejected the argument that the Live-In Exemption lacked express delegation, reasoning that the delegation in the Companionship Services Exemption extends to the Live-In Exemption to the extent they overlap in regulating live-in companionship workers. Regarding standing, the court held that because the 2013 regulation already excluded Americare from the exemption, the plaintiffs suffered no injury from the separate definition of 'companionship services' that the Department narrowed. Therefore, they could not challenge that definition.
The decision confirms that third-party home care agencies cannot claim the FLSA's companionship or live-in exemptions, meaning they must pay overtime wages to eligible employees. The ruling solidifies the Department of Labor's 2013 regulatory framework despite challenges based on the Loper Bright decision. Americare and Adhikari remain liable for unpaid overtime wages. The decision also closes the door on future challenges by third-party employers to the specific definition of 'companionship services,' as such challenges are now barred by lack of standing. A concurring opinion by Judge Bush agreed with the judgment but criticized the majority's reasoning for extending the delegation from the Companionship Services Exemption to the Live-In Exemption, arguing instead that the definition of 'domestic service employment' should simply apply to both exemptions.
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