A Labor Department rule instrumental to the agency’s $15 million victory in an overtime case is unlawful, the home-care firm subject to the verdict argued to a Sixth Circuit panel Tuesday.
Americare Healthcare Services LLC is one of three home-care firms challenging the DOL’s ability to block third-party employers from taking advantage of a Fair Labor Standards Act overtime exemption for live-in services in multiple suits. The agency doesn’t have the authority to make that decision, which followed approximately 40 years of home-care firms qualifying for the exemption, Boyden Gray PLLC partner James Conde argued for Americare.
Congress gave the DOL “specific authority to define and delimit the terms” of a similar exemption for companionship services, but the live-in exemption is “very different,” Conde told the US Court of Appeals for the Sixth Circuit. The latter’s text is “self-executing and straightforward,” so “Congress emphatically did not” give the agency “any authority to define or delimit” its terms, he added.
The US Supreme Court in a 2007 opinion said the agency had the authority to answer questions about third-party employers’ eligibility for exemptions. But that case applied the Chevron doctrine that defers to agency decisions, so “none of that reasoning is valid” after the justices erased the doctrine in Loper Bright Enterprises v. Raimondo last summer, Conde said.
But the 2007 case—Long Island Care at Home Ltd. v. Coke—was about express delegation of authority, not statutory ambiguity, said Lindsey Rothfeder, the DOL attorney who argued for the agency. Coke only “glancingly” cited Chevron, and it actually asked and answered the same questions contemplated in Loper Bright, she added.
Future Rule Change
Americare hires workers who assist elderly and disabled members of low-income families through the Medicaid Waiver Program, which allows states to cover the costs of in-home care. A 2013 rule change made the firm ineligible for certain FLSA overtime and minimum wage exemptions, and compliance would mean paying its care workers more.
A district judge in Ohio granted the agency summary judgmentand, in January, ordered Americare to hand over $15 million in back pay and liquidated damages for its affected employees. Its workers are employees who must be paid overtime rates for extra work, and no FLSA exemptions apply, the lower court said in a ruling that considered and rejected the Loper Bright argument and prompted Americare’s appeal. The Sixth Circuit scheduled arguments for October but postponed due to the government shutdown.
The company in a separate suit with two other home-care firms sought to block the DOL’s revised regulation after the agency started investigating their alleged wage violations but before it sued them. A federal judge in Pennsylvania booted Americare from that case earlier this month based on the advanced nature of DOL’s enforcement action against Americare.
The department is currently considering changing the rule back to what it was in 2013, when third-party employers such as Americare qualified for the exemption. But it isn’t certain if that change will go through, and even if it does, it won’t be retroactive, Rothfeder said.
Judge John K. Bush said it “seems odd” that it was legal for Americare to skip paying overtime before 2013 and could be legal again soon. “Congress has not done anything to change the statute” in the meantime, so it seems as if the legality changed “kind of at the whim” of the DOL, he said.
It’s true that the statute stayed the same, but the Supreme Court recently affirmed the principle that agencies can sometimes reverse their positions on regulations, Rothfeder said. “The rule was very much in effect during the time period when these violations occurred.”
Judges Jane Branstetter Stranch and Stephanie Dawkins Davis also sat on the panel.
Obermayer Rebmann Maxwell & Hippel LLP served as additional counsel to Americare.
The case is Dep’t of Lab. v. Americare Healthcare Servs. LLC, 6th Cir., No. 25-03128, argued 12/16/25.
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