B.   Section 552.6 Is A Reasonable Interpretation Of The Statute.

The district court correctly concluded that the definition of "companionship services" contained in section 552.6 -- which includes both "household work related to the care of the aged or infirm" as well as "general household work" that is "incidental" -- is reasonable and in accordance with the statute.  To support its holding in this regard, the court referred to legislative history quoted by the Ninth Circuit in McCune:

The fact that persons performing casual services as baby-sitters or services as companions do some incident of household work does not keep them from being casual baby-sitters or companions for purposes of this exclusion.  

894 F.2d at 1111 (quoting H.R. Rep. No. 913, 1974 U.S.C.C.A.N. at 2845).  The district court further stated that the 20 percent limitation on the amount of general household work that can be performed "keep[s] the exemption limited to those who predominately provide companionship, which is consistent with the legislative history."  267 F. Supp.2d at 340.  Congress clearly intended that the performance of some general, incidental household work, as well as household work related to the care of the aged or infirm, would not disqualify an employee from the section 13(a)(15) exemption.  Because the statute refers to "companionship services" for individuals who "are unable to care for themselves," 29 U.S.C. 213(a)(15) (emphasis added), it is manifestly reasonable for the regulatory definition of "companionship services" to include a significant "care" component that allows for the performance of some associated household work (be it household work directly related to the care of the individual or general household work that is incidental to such care).

     Although this Court has not addressed the validity of section 552.6, both the Sixth and Ninth Circuits have upheld the validity of the regulation's definition of "companionship services."  In Salyer, the Sixth Circuit affirmed the regulation's inclusion within "companionship services" of "'household work related to the care of the aged or infirm person such as meal preparation, bed making, washing of clothes, and other similar services.'"  83 F.3d at 787 (quoting 29 C.F.R. 552.6).  As the Sixth Circuit stated, "[W]e cannot say that this regulatory definition of 'companionship services' is either 'arbitrary, capricious, or manifestly contrary to the statute' that it elucidates."  Id. (quoting Chevron, 467 U.S. at 844).  In McCune, the Ninth Circuit held that the 20 percent limit on general household work was reasonable, and upheld the district court's conclusion that any household work "related" to the care of the individual would not be counted towards the 20 percent threshold.

     The only contrary authority may be easily discounted.  In Harris, the plaintiffs were "homemakers" who were employed by an agency that instructed them "to go to clients' homes and work a set number of hours for the clients."  The plaintiffs were required to perform a certain amount of housework, as well as "prepare meals, wash laundry, and run errands for clients."  In determining that section 552.6 was invalid to the extent it covers "homemakers," such as the plaintiffs in that case, the court relied heavily upon the Department's 2001 proposed amendments.  See 2001 WL 78448, at *4, 5 ("The evidence most damaging to Sims' contention that Congress intended to exempt homemakers from coverage is the DOL's recent proposal to amend the regulations pertaining to the companionship exemption. . . .   It is obvious from the proposed amendments that the DOL agrees the current definition of 'companionship services' under § 552.6 is unreasonable.  This alone is sufficient reason to disregard the current version of § 552.6.").  But, subsequent to the decision in Harris, the Secretary withdrew this regulatory proposal.  By doing so, the Department, in effect, reaffirmed the "companionship services" regulations as they currently stand.  Thus, because the court relied upon a proposed regulatory interpretation that was subsequently withdrawn by the Department, and given the reasonableness of the regulation as it stands, the Harris decision is unpersuasive authority.[5] 

Coke's primary argument against the validity of section 552.6 is that its definition of "companionship services" is contrary to the plain language of the statute, under a Chevron "step one" analysis.  See Chevron, 467 U.S. at 842-43.  Here, however, Congress did not expressly define "companionship services," as indicated by its injunction to the Secretary to "define[] and delimit[] [such term and others in section 13(a)(15)] by regulations."  29 U.S.C. 213(a)(15).   

Coke also appears to argue that section 552.6 is unreasonable because its definition of "companionship services" would include "employees whose sole function is to perform 'household work' as companions even if they provide no supervision or fellowship."  Appellant's Brief, p. 22.  This argument is based on a misreading of the regulation.  Under section 552.6, an employee must "provide fellowship, care, and protection" for a person unable to care for himself in order to meet the requirements of the "companionship services" exemption.  While the regulation allows for the performance of some household work, it must be either "related to" or "incidental" to the "care of the aged or infirm person."  See 29 C.F.R. 552.6.  See discussion supra supporting the "care" component. Thus, contrary to Cokes' suggestion, an employee hired only to perform household work or as a "full-time cook" would not meet the requirements of the regulation.  See Appellant's Brief, p. 16.  An employee who has not been hired primarily to provide "fellowship, care, and protection" will not be considered exempt under the Act or the regulations.  See 29 C.F.R. 552.6.

C.   Section 552.109(a) Is A Reasonable Interpretation Of The Statute.

The district court properly upheld section 552.109(a) because it promotes "the reasoning behind the companionship services exemption" -- "to allow those in need of such services to be able to find such assistance at a price they can afford.  Whether that service is provided by the direct hiring of an employee or through the use of an agency, the objective is still the same; to allow for the procurement of companionship services without being required to meet the minimum wage and overtime provisions of the FLSA."  267 F. Supp.2d at 340. 

This rationale for upholding section 552.109(a) is consistent with that provided by the Ninth Circuit in McCune.  As the Ninth Circuit stated,

[T]hese critical services reach more elderly or infirm individuals than they otherwise would precisely because the care-providers are exempt from the FLSA.  We also note that many private individuals, who do not benefit from federal and state assistance, may also be forced to forego the option of receiving these services in their homes if the cost of the services increases.  The only alternative for these individuals may be institutionalization.

894 F.2d at 1110.  See also Lott v. Rigby, 746 F. Supp. 1084, 1087 (N.D. Ga. 1990) (noting, after reviewing a Department of Labor administrative opinion, that "Congress created the 'companionship services' exemption to enable guardians of the elderly and disabled to financially afford to have their wards cared for in their own private homes as opposed to institutionalizing them"); Salyer, 83 F.2d at 788 (same).  In this case, the district court correctly noted that this underlying congressional policy is served regardless of "[w]hether that service is provided by the direct hiring of an employee or through the use of an agency."  267 F. Supp.2d at 340.

     Coke argues that section 552.109(a) is entitled to no deference because it is inconsistent with other regulatory interpretations of the "companionship services" exemption.  Specifically, Coke argues that the inclusion of employees of third parties within the exemption under section 552.109(a) is inconsistent with the Department's definition of "domestic service employment," i.e., "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."  29 C.F.R. 552.3 (emphasis added). 

While this argument may have some superficial appeal, federal courts have nonetheless given deference to the Secretary's interpretation in section 552.109(a).  Thus, in denying a challenge to the validity of section 552.109(a), the Tenth Circuit expressly held that "the fact that domestic service employees are not employed by the individual receiving care does not alone exclude them from the exemption."  Johnston, 213 F.3d at 562.  In reaching this conclusion, the court noted that all other courts that have been confronted with the question have rejected challenges to the validity of section 552.109(a).  See, e.g., Madison v. Resources for Human Development, Inc., 39 F. Supp.2d 542, 545 n.3 (E.D. Pa. 1999) (holding that, under section 552.109(a), "[a]lthough the plaintiffs are employed by RHD rather than the individuals they serve, that by itself does not exclude them from the exemption."), vacated and remanded on other grounds, 233 F.3d 175 (3^rd Cir. 2000); Terwilliger v. Home of Hope, Inc., 21 F. Supp.2d 1294, 1299 n.2 (N.D. Okla. 1998) (rejecting, as inconsistent with section 552.109(a), the plaintiffs' argument that they were not engaged in "domestic service employment," as defined in 29 C.F.R. 552.3, because they were employed by an agency and not the individual clients).[6]

The Administrator of the Wage and Hour Division also has, in effect, rejected this argument in a recent opinion letter dated August 16, 2002 (copy attached).  The Administrator noted that, in an attempt to reconcile section 552.109(a) with section 552.3, two previous opinion letters "appear to indicate that employees of a third party employer working as domestic service employees in private homes may not qualify for the Section 13(a)(15) exemption unless they are jointly employed by the third party employer and the household where they are employed."  Based on federal case law upholding the validity of 29 C.F.R. 552.109(a) as written, however, the Administrator clarified that "under 29 C.F.R. 552.109(a), an employee who is engaged in providing companionship services in private homes and who is employed by a third party employer other than the family or household receiving the worker's services is exempt from the minimum wage and overtime requirements under Section 13(a)(15) of the Fair Labor Standards Act."  (Emphasis added.)  The Administrator rescinded and withdrew all prior opinions expressing a contrary view. 

This 2002 opinion letter is consistent with the case law and the policy reasons underlying the "companionship services" exemption, and is therefore entitled to deference.  See Reich v. Miss Paula's Day Care Center, Inc., 37 F.3d 1191, 1194 (6^th Cir. 1994) ("Because DOL's Wage and Hour Administrator is the primary federal authority entrusted with determining the FLSA's scope, these interpretations [set forth in a Wage-Hour opinion letter and Wage-Hour's Field Operations Handbook], while not controlling upon the courts by reason of their authority, do constitute a body of experience and informed judgment to which the courts and litigants may properly resort for guidance.") (internal quotation marks omitted).  See also Christensen v. Harris County, 529 U.S. 576, 587 (2000); Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944); Freeman v. National Broadcasting Company, Inc., 80 F.3d 78, 84 (2^nd Cir. 1996).

     Coke also argues that section 552.109(a) is invalid because it excludes from coverage home healthcare workers who had been subject to "enterprise coverage" prior to the 1974 Amendments.[7]  A review of the history of the "companionship services" regulations demonstrates that the Secretary has already considered and resolved this question under her rulemaking authority.  Section 552.109, as originally proposed, stated that employees providing companionship services, who are employed by third party employers meeting the Act's "enterprise coverage" requirements, are not exempt under section 13(a)(15) because "their employment was subject to the Act prior to the 1974 Amendments and it was not the purpose of those Amendments to deny the Act's protection to previously covered domestic service employees."  See 39 Fed. Reg. 35382, 35385 (September 25, 1974).  The Department ultimately determined, however, that the specific language of the statute that exempts, without qualification, "any employee employed in domestic service employment to provide companionship services" outweighed any concern for the continuation of coverage of some employees under an "enterprise coverage" theory.  See 40 Fed. Reg. 7404, 7505-06 (February 20, 1975) ("This interpretation is more consistent with the statutory language and prior practices concerning other similarly worded exemptions."); cf. Mitchell v. Gammill, 245 F.2d 207, 208-09, 211 (5^th Cir. 1957) (holding that the section 13(a)(2) "retail and service establishment" exemption (since repealed) applied without qualification to "any employee" of such an establishment, including those who did no retail or service work); McComb v. Union Stock Yards, 168 F.2d 375, 377 (7^th Cir. 1948) (applying the section 13(b)(2) "rail carrier" exemption to "any employee" of a rail carrier regardless of the type of work performed by that employee).  Thus, the Secretary provided a reasonable explanation for including those employees hired by third-party agencies within the section 13(a)(15) exemption. 

Coke further argues that the 1975 promulgation of section 552.109(a) violated the notice and comment requirements of the Administrative Procedure Act ("APA") because "the final regulation was the exact opposite of the proposed regulation."  Appellant's Brief, p. 34.  The district court declined to consider this argument because it was not properly raised.  See 267 F. Supp.2d at 336 n.3.  Because this issue was not raised in the district court, it is waived.  See, e.g., Local 538 United Brotherhood of Carpenters and Joiners of America v. United States Fidelity and Guaranty Co., 70 F.3d 741, 743 (2d Cir. 1995). See also Singleton v. Wulff, 428 U.S. 106, 120 (1976) ("It is the general rule . . . that a federal appellate court does not consider an issue not passed upon below.") (quoted in Christensen v. Kiewit-Murdock Investment Corp., 815 F.2d 206, 215 (2^nd Cir.), cert. denied, 484 U.S. 908 (1987)).  However, even if this Court were to consider this argument, it has no merit.[8]

In support of her APA argument, Coke cites National Black Media Coalition v. FCC, 791 F.2d 1016, 1022 (2^nd Cir. 1986), and AFL-CIO v. Donovan, 757 F.2d 330, 338 (D.C. Cir. 1985), which stand for the proposition that "if the final rule deviates too sharply from the proposal, affected parties will be deprived of notice and an opportunity to respond to the proposal."  These cases also state that "the final rule must be a 'logical outgrowth' of the rule proposed," and "[t]he test that has been set forth is whether the agency's notice would 'fairly apprise interested persons of the subjects and issues' [of the rulemaking]."  National Black Media, 791 F.2d at 1022 (quoting AFL-CIO, 757 F.2d at 338).  The Department's promulgation of section 552.109(a) meets these standards.

In National Black Media, the court concluded that agency notice was inadequate because the agency's final rule, abandoning a policy set forth in the proposed rule, was based on "critical, yet unpublished, data" that had not been disclosed to the public for review and comment.  791 F.2d at 1023-24.  In AFL-CIO, the court concluded that notice and comment requirements were violated because the agency had provided no notice that any change was proposed, or even contemplated, with respect to the existing regulation that was substantially modified by the final rule. 

This case is unlike either National Black Media or AFL-CIO.  The Department, by proposing to amend 29 C.F.R. Part 552, was exercising its authority to "define and delimit" the terms of the "companionship services" exemption.  The notice of proposed rulemaking and requests for comments expressly stated that "the current regulation [at 29 C.F.R. 552.109] impermissibly extends the exemption for companionship services and for live-in workers to employees who do not qualify as domestic service employees, because they are not working in the home of their employer, i.e., the third party employer."  66 Fed. Reg. 5481, 5485 (Jan. 19, 2001).  This was subject to public comment.  The Department's ultimate conclusion, that including employees of third-party employers within the exemption is "more consistent" with the statutory language and past practices, is a "logical outgrowth" of the proposed rule.  In fact, the process here illustrates effective use of notice and comment, i.e., the agency made a considered judgment after reviewing the comments on a clearly identified proposed regulatory provision.  See City of Waukesha v. Environmental Protection Agency, 320 F.3d 228, 245 (D.C. Cir. 2003) ("As we noted in International Harvester Co. v. Ruckelshaus, 478 F.2d 615, 632 n.51 (D.C. Cir. 1973), '[a] contrary rule [than that giving the agency the authority to promulgate a final rule different in some particulars from the proposed rule] would lead to the absurdity that . . . the agency can learn from the comments on its proposal only at the peril of starting a new procedural round of commentary.'") (ellipsis in original).

D.   The Longstanding Nature Of The Department's Regulations Weighs In Favor Of Upholding Them.

     The regulations in question were promulgated in the year following the 1974 statutory amendments, and have now been in effect for over 28 years.  The Supreme Court has stated that "a long-standing, contemporaneous construction of a statute by the administering agencies is entitled to great weight."  Leary v. United States, 395 U.S. 6, 25 (1969) (internal quotation marks omitted).  The Supreme Court has also held that "[w]hen Congress revisits a statute giving rise to a longstanding administrative interpretation without pertinent change, the 'congressional failure to revise or repeal the agency's interpretation is persuasive evidence that the interpretation is the one intended by Congress.'"  CFTC v. Schor, 478 U.S. 833, 846 (1986) (quoting NLRB v. Bell Aerospace Co., 416 U.S. 267, 274-75 (1974)).  Despite numerous opportunities to do so, Congress has not acted to "correct" the Department's regulatory interpretations of the "companionship services" exemption, which have been in effect since 1975.  Furthermore, the Department's withdrawal of the amendments proposed in January 2001 demonstrates that the Department "still believes that these long-standing regulations are appropriate in the current home healthcare environment."  267 F. Supp.2d at 341.

CONCLUSION