The opinion of the court was delivered by: Katz, District Judge.
The plaintiffs, an opt-in class of fourteen current and former
employees of defendant Resources for Human Development, Inc.
(RHD), claim that RHD underpays its employees for overtime
because it does not include bonuses and its contributions to the
employees' benefit plan in the employees' regular pay rate as
required by the Fair Labor Standards Act (the FLSA). Before the
court is the defendant's motion for summary judgment.*fn1
The Fair Labor Standards Act is intended to guarantee to
employees certain minimum labor standards. See Mitchell v. Robert
DeMario Jewelry, Inc., 361 U.S. 288, 292, 80 S.Ct. 332, 4 L.Ed.2d
323 (1960). It does so principally by requiring the payment of a
minimum wage and the payment of an overtime premium of one and
one half times the employee's regular rate of pay for hours
worked in excess of forty in a given week. See 29 U.S.C. § 206,
207(a). At issue in this case is whether the defendant is
properly calculating its employees' regular rate. It uses their
hourly wage, but plaintiffs argue it should be higher because it
should include contributions to the benefit plan and bonuses.
Preliminary to those issues, though, RHD argues that the FLSA's
overtime pay rule is not applicable to plaintiffs at all because
they are a type of employee exempted from the Act's coverage.
RHD argues that the plaintiffs are not covered by the FLSA
because they are members of a class of employees exempted by
statute. Specifically, the Act excludes from coverage "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."
29 U.S.C. § 213(a)(15). To fit within the exemption, then, the statute
requires that three elements must be met: (1) the employees must
be employed in domestic employment, (2) the employees must
provide companionship services, and (3) the services must be for
qualified aged or infirm individuals.
Exemptions from the FLSA are to be construed narrowly against
the employer. It is the employer's burden to prove that its
employees come within the scope of the exemption, and "any
exemption from the Act must be proven plainly and unmistakenly."
Friedrich v. U.S. Computer Servs., 974 F.2d 409, 412 (3d Cir.
1992). The specific requirements of the elements of the companion
exemption are not set forth in the statute. Rather, they are
articulated in the regulations and interpretations of the
Secretary of Labor.*fn2 The regulations define "domestic service
employment" as follows:
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.*fn3 The term includes employees
such as cooks, waiters, butlers, valets,
maids, housekeepers, governesses,
nurses, janitors, laundresses, caretakers,
handymen, gardeners, footmen, grooms,
and chauffeurs. . . . This listing is illustrative
and not exhaustive.
29 C.F.R. § 552.3. To restate, to be employed in domestic
employment, employees must perform household services in a
Defendant cannot satisfy its burden of proving that its
employees meet this test for domestic employment, because RHD's
clients' homes are sufficiently institutionalized that they are
not "private homes" within the meaning of the statute. The
court's decision is informed by the similar analyses performed by
other district courts in Linn v. Developmental Serve, of Tulsa,
Inc., 891 F. Supp. 574, 577-80 (N.D.Okla. 1995), and Lott v.
Rigby, 746 F. Supp. 1084, 1086-89 (N.D.Ga. 1990), as
well as Terwilliger v. Home of Hope, Inc., 21 F. Supp.2d 1294,
1300 (N.D.Okla. 1998). See also Bowler v. Deseret Village Assoc.,
Inc., 922 P.2d 8 (Utah 1996). Each of these cases makes it clear
that the private home determination is highly fact-specific and
to be made on a case-by-case basis, and that no one factor is
dispositive. To engage in the required analysis of the facts, it
is first necessary to set forth a somewhat detailed description
of the RHD program.*fn4
RHD is a non-profit corporation engaged in providing human
services programs including head-start programs, community health
centers, low income housing, transportation services, community
living programs for adults with mental health and mental
retardation challenges, drug and alcohol abuse programs, and
assistance to homeless people. To do so, it is subdivided into
several programs, and it employs a total of approximately 2,400
people. Plaintiffs are or were residential advisors in RHD's
"Mandela" and "Visions" programs. These programs provide
assistance, support, and training to adults who face mental
health or mental retardation challenges. Stip. ¶¶ 1-4.
These RHD programs serve adults released from state mental
hospitals or referred by other agencies who are not able to care
for themselves on their own but do not need hospitalization. See
Def.Ex. 1 (Bligen.Decl.) ¶ 2; Def.Ex. 3 (Johnson Decl.) ¶
2. The case managers overseeing the individuals'
de-institutionalization must find a service provider that will
provide community living arrangements in a controlled setting.
RHD, through its Mandela and Visions programs, is one such
provider in the Philadelphia area. The RHD community living
arrangements are considered a middle step to independence. Some
of the clients can learn to live on their own, through a long and
Each individual receives the services of a county case
management team, which oversees the use of government funds based
on a treatment plan developed by the county mental health
professionals on the team, with the input of the individual, the
individual's advocate, and family members. When a service
provider such as RHD is involved, it also has input into the
development of the treatment plan. The plan, the contents and
implementation of which are controlled by state and federal
regulations, specifies the individual's appropriate living
arrangement. If RHD and the individual agree to place the person
in the program after a referral from the case manager, state and
federal resources that supported that person in the institution
or prior living arrangement follow him or her into the RHD
community living arrangement. See Pl.Ex. 2 (Bligen Dep.) at 5-7.
Once RHD enters into a contract with the county undertaking to
provide services for the individual, it must comply with the
requirements of the plan to receive funding. County case managers
and other county officials assess compliance through periodic
review of documentation and quarterly and yearly inspections. See
Pl.Ex. 4 (Cox — Scales Dep.) at 35.
RHD clients pay up to seventy-two percent of their monthly
Social Security Disability payments to RHD, which goes toward
rent and other ordinary household expenses such as food and
utilities. See Def.Ex. 1 (Bligen Decl.) ¶ 6; Def.Ex. 3
(Johnson Decl.) ¶ 6. In the case of at least one residence,
the amount paid by the client does not cover the lease expenses
of the home.*fn5 For an apartment at the 1705 Hamilton Building
for which RHD pays monthly rent of $649, the one client who lives
there pays $375.41 monthly, which goes not only to rent but for
food and utilities. The difference is made up by state and county
funds. See Pl.Ex. 2 (Bligen Dep.) at 39. Utilities are frequently
registered in the resident's name, see Def Ex. 1 (Bligen Decl.)
¶ 8; Def.Ex. 3 (Johnson Decl.) ¶ 8, but under the terms
of the lease the utility charges are included as part of the
client' room and board payment to RHD. See Def.Ex. 1B.
All residents of RHD housing are bound by the house rules,
which include the following: no drugs or alcohol, no loud music,
residents must be dressed if outside their bedrooms between 8:30
a.m. and 10:00 p.m., and residents are to "keep the staff of
Mandela apartments informed as to their whereabouts at all
times." These rules are in the rental agreement the client signs
with RHD. See Def.Ex. lB.
RHD employees handle the personal spending money of some
clients. Fifteen dollars per week (Social Security Disability
provides thirty dollars each month, which amount is supplemented
by the county) is disbursed by the county case manager to an RHD
staff member, and the RHD staff then disburses the money to the
client as provided in the individual's treatment plan. For
clients who can handle fifteen dollars at a time, the whole
amount is given to them once a week; for individuals who cannot
manage such a sum of money all at once, it is disbursed in three
dollar increments over the course of the week, See Pl.Ex. 2
(Bligen Dep.) at 22-25. RHD maintains a custodial account for
receipt of the clients' Social Security benefits. Often, RHD is
made the payee of the Social Security checks. See Pl.Ex. 5
(Jackson Dep.) at 40-41.
To the extent they are physically and mentally able, the
residents are responsible for maintenance and upkeep of the
homes, cooking their own meals, and washing themselves and their
own clothes. See Def.Ex. 1 (Bligen Decl.) ¶ 8; Def.Ex. 3
(Johnson Decl.) ¶ 8; Def.Ex. 16 (Richards Dep.) at 64. The
residents choose the food they purchase and meals they eat on a
given day, as well as the clothes they purchase and the outfits
they wear on any given day. See Def.Ex. 1 (Bligen Decl.)
¶ 9; Def.Ex. 3 (Johnson Decl.) ¶ 9.
A set of keys is kept at each location for use by the RHD staff
while on duty. The RHD staff must knock before entering. Each
client has keys to his or her house if able to do so. See Def.Ex.
3 (Johnson Decl.) at 7. Only six out of the eleven clients in the
Mandela program have keys to the houses. Only three out of the
eleven residents are ...