Courts have been quick to allow one employee claiming to be due overtime to sue on behalf of others in the same job category by certifying a collective action, allowing that employee to represent the class and requiring the employer to provide contact information for others in the same job category. However, in a case with potentially far reaching implications for the home care industry and elsewhere, one court decided to buck the trend and offer a glimmer of hope to employers that find themselves on the receiving end of a wage and hour lawsuit.
Specifically, in Cowell v. Utopia Home Care, Inc., 2:14-cv-736 (LDW)(SIL), Judge Steven Locke of the Eastern District of New York denied plaintiff’s motion for conditional certification of a collective action consisting of 5,000 home care workers and held that misclassification-based overtime claims involving the “companionship services” exemption under the FLSA are not suitable for a collective action where (a) the nature of the plaintiff’s underlying claim requires proof that he/she spent more than 20% of his/her workdays performing non-exempt work (here, “general household work” unrelated to the provision of care to the patient), and (b) the specific job tasks performed by the workers in the proposed collective action, as well as the amount of time spent on each task, vary from employee to employee, due to the different needs of each patient.
This is a significant decision for a few reasons. First, for those employers who operate in the home health industry, the decision provides some much needed cover from a plaintiffs’ bar that has been filing lawsuit after lawsuit challenging the propriety of employers’ classification of their home care workers as exempt from the FLSA’s overtime requirements pursuant to the “companionship services” exemption. This is because the fundamental hurdle that the plaintiff in Cowell was unable to clear, i.e., that the amount of time each home health aides spends on general housework unrelated to the provision of care is based on the needs of the patient and, therefore, varies from day to day and employee to employee, would presumably be present in most (if not all) misclassification cases pertaining to this particular exemption. Accordingly, the Cowell decision should provide a useful tool for employers in the home health care industry who find themselves on the receiving end of a motion for conditional certification of a collective action.
Second and perhaps more importantly, the underlying rationale employed by the court in Cowell could presumably be invoked just as easily to deny conditional certification of a collective action in any misclassification case involving the DOL’s so-called “80/20” rule, under which an employee should not be classified as exempt if more than 20% of his work time is spent performing non-exempt job duties. Indeed, because this rule is used by the DOL to determining the propriety of various exempt classifications (not just the companionship services exemption), and by its very nature, requires an individualized assessment of the amount of time each employee spends performing one category of job tasks versus another, the Cowell court’s conclusion that conditional certification was inappropriate in that case could easily be extended to any other case in which the plaintiff is asserting a misclassification claim (in any industry) based upon the assertion that he spent more than 20% of his day performing non-exempt work.
Accordingly, the decision may provide a roadmap for defeating conditional certification in misclassification cases that arise outside the home health care industry as well.