THOMAS L. LUDINGTON, District Judge.
Plaintiff James Newsome brought this action under the Family & Medical Leave Act ("FMLA"), 29 U.S.C. § 2601 et seq., alleging that Young Supply Company, Staffing Source Personnel, Inc. d/b/a Driver Source, Inc., and Driver Source, Inc. (collectively, "Defendants") violated his job restoration rights under the FMLA when they refused to restore his original job position as a truck driver, or an equivalent position required by the FMLA. ECF No. 1. In lieu of filing an answer to the complaint, Defendants filed a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), or alternatively for summary judgment pursuant to Federal Rule of Civil Procedure 56. ECF No. 6. The Court entered an order construing Defendants' motion as one for summary judgment, and permitting the parties to engage in limited discovery regarding whether Defendants have 50 or more employees within a 75 mile radius of Plaintiff's worksite. ECF No. 10.
Defendants admit that they each employed 50 or more employees, ECF No. 6 at 4-5, that they were both "joint employers" of Plaintiff within the meaning of the FMLA, id. at 6, n. 5, that Staffing Source, whose primary place of business is located in Dearborn, Michigan, was the primary employer within this joint employment enterprise, id., and that if Staffing Source's facility is deemed to be Plaintiff's "work site" under the joint employment enterprise, Defendants are liable to Plaintiff under the FMLA, id. at 3, 5.
Defendants, however, challenge the authority of 29 C.F.R. § 825.111(a)(3) (1995), which is the Department of Labor regulation establishing Staffing Source's facility
A hearing was held on October 6, 2011, to address Defendants' motion. For the reasons provided herein, Defendants' motion will be denied.
Staffing Source Personnel, Inc. ("Staffing Source")
Plaintiff was hired by Staffing Source in October of 2002 to work as a truck driver. Nine months later, Staffing Source assigned Plaintiff to work for defendant, Young Supply Company, as a truck driver. In September of 2008 Plaintiff provided notice to Defendant of his need for a medical leave of absence in order to undergo surgery in January of 2009. Defendants concede that plaintiff's medical condition constituted a "serious health condition" under the FMLA. ECF No. 6. at 5. Plaintiff commenced his leave of absence on January 12, 2009. At the completion of his medical leave of absence, Defendants refused to reinstate Plaintiff into his original job position, or an equivalent job position.
Where, as here, a determination of a motion to dismiss involves consideration of evidence beyond the face of the complaint, the motion cannot be treated as a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), but rather must be treated as a motion for summary judgment pursuant to Rule 56. Fed.R.Civ.P. 12(d). A motion for summary judgment should be granted if the movant shows that "there is no genuine dispute as to any
The court must view the evidence and draw all reasonable inferences in favor of the nonmoving party and determine "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson, 477 U.S. at 251-52, 106 S.Ct. 2505. The party opposing the motion may not "rely on the hope that the trier of fact will disbelieve the movant's denial of a disputed fact" but must make an affirmative showing with proper evidence in order to defeat the motion. Street v. J.C. Bradford & Co., 886 F.2d 1472, 1479 (6th Cir. 1989). A party opposing a motion for summary judgment must designate specific facts in affidavits, depositions, or other factual material showing "evidence on which the jury could reasonably find for the plaintiff." Anderson, 477 U.S. at 252, 106 S.Ct. 2505.
The FMLA allows an employee to take up to 12 weeks of leave in a 12 month period for, among other things, the employee's own "serious health condition." 29 U.S.C. § 2612(a)(1). Upon completion of the leave, the employee is entitled to be reinstated into his or her original job position, or an equivalent job position. 29 U.S.C. § 2614(a)(1). Employers are prohibited from interfering with an employee's rights under the FMLA, and are prohibited from retaliating against employees who invoke their rights under the FMLA. 29 U.S.C. § 2615(a)(1) and (2); Edgar v. JAC Products, Inc., 443 F.3d 501 (6th Cir.2006).
For the protections of the FMLA to apply, the employee must be an "eligible employee." 29 U.S.C. § 2612(a)(1). An eligible employee is one who is employed by the employer for at least 12 months, and who has worked at least 1,250 hours for the employer within the 12 month period preceding the leave. 29 U.S.C. § 2611(2)(A)(i)-(ii). Defendants concede that Plaintiff is an eligible employee. However, the text of the FMLA provides for an "exclusion" to coverage under the Act: If the employer employs less than 50 employees at the employee's "worksite," or within 75 miles of the employee's "worksite." 29 U.S.C. § 2611(2)(B)(ii).
FMLA is a remedial statute, and as such, its coverages and protections must be construed and interpreted broadly in favor of the plaintiff. Cobb v. Contract Transport, Inc., 452 F.3d 543, 559 (6th Cir.2006). Furthermore, the 50/75 "worksite" provision is, by the very text of the
The term "worksite" is not defined in the FMLA. See 29 U.S.C. § 2601-2654; O'Dea-Evans v. A Place for Mom, Inc., 2009 WL 2143739, at *5 (N.D.Ill.2009). However, Congress specifically delegated the rule-making authority to the Secretary of Labor to "prescribe such regulations as are necessary to carry out" the FMLA. 29 U.S.C. § 2654. The Secretary of Labor utilized full notice and comment rule-making procedures when promulgating the regulations implementing the FMLA. O'Dea-Evans, 2009 WL 2143739, at *5. Pursuant to its rule-making authority specifically authorized by 29 U.S.C. § 2654, the Department of Labor enacted 29 C.F.R. § 825.111(a)(3) (1995), which defines the "worksite" for an employee of "joint employers," and will be discussed more fully below. Defendants argue that the 1995 version of subsection (a)(3) should not be applied to the instant case, or, alternatively, that subsection (a)(2) is more appropriately applicable than subsection (a)(3).
29 C.F.R. § 825.111(a)(2) states:
There is no exception in this section for employees of joint employers, but Defendants request that the Court determine that this section always applies to any transportation employee and conclude that Plaintiff's worksite was his home base, where he reported, where he was dispatched, departed and returned in Saginaw. Defendants assert that this more "specific" section pertaining to transportation employees should prevail over the "general" language pertaining to employees of joint employers whether they have changing or fixed worksites or are on short term or long term assignments. Morales v. Trans World Airlines, Inc., 504 U.S. 374, 384, 112 S.Ct. 2031, 119 L.Ed.2d 157 (1992) (noting that "it is commonplace of statutory construction that the specific governs the general").
Defendants do not explain why subsection (a)(2) is more specific than subsection (a)(3) governing employees of joint employers. Defendants offer no legal support for their contention that subsection (a)(2) was meant to apply to all transportation employees and preempt the regulation relating specifically to employees of joint employers. Indeed, the language of 29 C.F.R. § 825.111(a)(2) only appears to address single-employer situations where an employee has no fixed worksite. Extending 29 C.F.R. § 825.111(a)(2) to apply to
The current version of 29 C.F.R. § 825.111(a)(3), which went into effect on January 16, 2009, provides:
The prior version of 29 C.F.R. § 825.111(a)(3), however, provides that "when an employee is jointly employed by two or more employers (see § 825.106), the employee's worksite is the primary employer's office from which the employee is assigned or reports." Under both the old and new version of the regulations, the date upon which application of the 50/75 exclusion is determined is the date the employee provides notice of the need for leave. 29 C.F.R. § 825.110(f) (1995) and 29 C.F.R. § 825.110(e) (2009).
Defendants first argue that the current regulation should apply because it was intended to replace the older version which was declared invalid by Harbert v. Healthcare Servs. Group, Inc., 391 F.3d 1140 (10th Cir.2004), cert. denied 546 U.S. 822, 126 S.Ct. 356, 163 L.Ed.2d 65. In Harbert, the plaintiff had been employed as a housekeeping supervisor at a nursing home, Sunset Manor, in Brush, Colorado, when a national cleaning company, Healthcare Services Group, Inc. ("Healthcare") contracted to provide cleaning services at the nursing home. The plaintiff's employment was transferred to Healthcare, but she continued to report for work and provide the same services at Sunset Manor. Sunset Manor's administrator exercised supervision and control over the plaintiff when she was employed by Sunset Manor, and this did not change after the plaintiff became an employee of Healthcare. Id. at 1143. The plaintiff still reported to her district manager at Healthcare at its regional office in Golden, Colorado. "Such reports were almost always by telephone or through the submission of written reports; the plaintiff went to the Golden office only for an occasional district meeting of account managers." Id. When the plaintiff sought leave, she invoked the prior version § 825.111(a)(3), alleging that this was a joint employment between Healthcare and Sunset Manor, that Healthcare was the primary employer, and that, if its regional office in Golden were considered her worksite rather than the nursing home in Brush where she actually worked, Healthcare would be liable. Healthcare had 50 or more employees within 75 miles of Golden, but not Brush.
The court explained that the rationale behind the 50/75 rule was Congress's recognition that even potentially large employers, i.e. those with more than 50 employees, may have difficulty finding temporary replacements for employees who work at geographically scattered locations. Congress thus determined that if an employer did not have a significant pool of employees nearby to cover for an absent employee, that employer should not be required to provide FMLA leave to that employee. The 75-mile radius that applies to the aggregation of employees at different facilities recognizes the difficulties an employer may have in reassigning workers to geographically
The court also noted that the prior version of § 825.111(a)(3) would fictionalize an employee's worksite to a location where a plaintiff rarely, if ever, reported and would create an arbitrary distinction between sole and joint employers. The court reasoned that
Id. at 1150. Based on this reasoning, as well as the contravention of the statutory purpose brought about by applying subsection (a)(3) to create an artificial worksite, the court held the regulation invalid and concluded that the plaintiff was not an eligible employee under the FMLA. Defendants argue that because the court in Harbert declared the old version of the regulation invalid, the new version should apply retroactively to the instant case.
Moreover, Defendants contend that the new version of the regulation was intended to repair the problem with the old version. The "Notice of Proposed Rule Making" proposed the change to the prior version of § 825.111(a)(3) as a response to "the courts decision in Harbert .... [holding] that the current regulation is arbitrary and capricious as applied to an employee with a long-term fixed worksite." 73 Fed.Reg. 67934, November 17, 2008. The comments to the rule change further explained that the general FMLA principle that an employer with fewer than 50 employees within 75 miles should not have to find temporary replacements for employees on leave, and the interest in having consistency between sole and joint employers counseled in favor of a different rule in that situation. Id. Defendants assert that the comments to the rule change make clear that the new version of the regulation was an acknowledgment by the Secretary of Labor that the prior rule was invalid pursuant to the holding in Harbert, and that the new version of the regulation was intended to cure that invalidity. Under these circumstances, Defendants argue that the Court can give retroactive application to the new regulation.
Defendants acknowledge that retroactivity is not favored in the law, Bowen v. Georgetown University Hosp., 488 U.S. 204, 208, 109 S.Ct. 468, 102 L.Ed.2d 493 (1988), but contend that retroactive application of the new version of the regulation is appropriate. Generally, "congressional enactments and administrative rules will not be construed to have retroactive effect unless their language requires this result." Id. However, when a statute or rule does not substantively change the law but merely clarifies existing law, corrects a misinterpretation by a court, or overrules a wrongly decided case, the statute or rule may be applied retroactively. See Brown v. Thompson, 374 F.3d 253, 259 (4th Cir.2004). In determining whether a revision of a rule changes or merely clarifies existing law, the Court "looks to statements of intent made by [the enacting body]." Id. (citing Piamba Cortes v. Am. Airlines, Inc., 177 F.3d 1272, 1284 (11th Cir.1999)).
Even if the Court concludes that giving retroactive effect to the statute is improper, Defendants urge the Court to look to the new version of the regulation as an aid in both interpreting the prior regulations and the statute, Victorelli v. Shadyside Hosp., 128 F.3d 184, 186 (3d Cir.1997); Scamihorn v. General Truck Drivers, et al., 282 F.3d 1078 (9th Cir.2002), and that proper interpretation of the entire regulation, taken as a whole, is that Plaintiff's worksite was Saginaw.
Plaintiff asserts that 29 C.F.R. § 825.111(a)(3) (1995) is a valid exercise of the Department of Labor's rule-making authority delegated to it by Congress, and as such is entitled to deference under Chevron U.S.A. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Plaintiff contends that Harbert does not apply to the application of § 825.111(a)(3) (1995) to employees with no fixed worksite who are employed by employee leasing agencies. Harbert, 391 F.3d at 1153. To the contrary, Plaintiff submits that the court in Harbert limited its decision to circumstances where an employee of joint-employers works at a fixed location every day and does not routinely leave that location. Id.
More specifically, in concluding that 29 C.F.R. § 825.111(a)(3) (1995) was not entitled to Chevron deference, the court emphasized that it was limiting its decision concerning the regulation to the unique situation presented in that case where the joint employee physically reported to and remained nearly exclusively at a fixed location of employment. Harbert, 391 F.3d at 1149, 1151 ("we conclude that § 825.111(a)(3), as applied to the situation of an employee with a fixed place of work, is arbitrary, capricious and manifestly contrary to the FMLA" and stating that the Chevron deference factors militate against deference "as applied to plaintiff").
The court also made clear that its invalidation of § 825.111(a)(3) did not apply to employees with no fixed worksite such as temporary and leased employees. See Harbert, 391 F.3d at 1153. This point distinguishes Harbert from the instant case, in which Plaintiff, as a truck driver, had no fixed worksite under the FMLA
Moreover, even if the holding Harbert did apply to the facts of this case, this Court is not bound by the Tenth Circuit's decision in Harbert. Nixon v. Kent County, 76 F.3d 1381, 1388 (6th Cir.1996) (en banc). To the contrary, the Court is required to "independently decide [its] own cases," even if it results in disagreement with courts in other circuits, id., and Plaintiff submits that the holding in Harbert should not be followed. Under Chevron, courts apply a two-step analysis to determining the validity of an agency's regulation promulgated pursuant to Congressional rule-making delegation. "First always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress." Chevron, 467 U.S. at 842-43, 104 S.Ct. 2778. This is determined by resort to the traditional tools of statutory construction. Id. at 843, 104 S.Ct. 2778. "If ... the court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction of the statute, as would be necessary in the absence of an administrative interpretation." Id. "Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute." Id. An agency's answer is permissible, and therefore controlling, unless found to be arbitrary, capricious or manifestly contrary to the statute. Id. at 843-44, 104 S.Ct. 2778. "It is not [the court's] role to determine the most appropriate interpretation of the statute, but simply to assess whether the regulation reflects a reasonable construction." Khan v. United States, 548 F.3d 549, 554-55 (7th Cir.2008). Furthermore, where, as with the FMLA regulations, the Secretary of Labor has closed the gap using notice and comment rule-making, Chevron deference should ordinarily be afforded. See United States v. Mead Corp., 533 U.S. 218, 228-29, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001) (holding that the use of notice and comment rule-making is "a very good indicator" of rulemaking meriting Chevron deference).
Here, the FMLA is silent as to what constitutes a "worksite." O'Dea-Evans, 2009 WL 2143739, at *5. The analysis then proceeds to step two of the Chevron framework. In Harbert, the court found that the reasonableness of the prior version of § 825.111(a)(3) was "a very close question." Harbert, 391 F.3d at 1149. Plaintiff contends that the question that must then be asked is: If the reasonableness of the Department of Labor's interpretation of FMLA's definition of "worksite" is "a very close question," then how can it be that the regulation is "arbitrary," "capricious," or "manifestly contrary" to the statute?
Regardless of the approach taken by the Tenth Circuit, the Sixth Circuit takes a
In the instant case, Defendants entered into an employee leasing contract retaining absolute control over the leased employee, providing for paying the employee's wages, and specifically retaining "full and direct control" in regard to "employee law matters." ECF No. 13 Ex. A. Even if such a contract did not exist in this case, the interpretation of "worksite" contained in the prior version of § 825.111(a)(3) for an employee with no fixed worksite, such as truck drivers, who are employed by temporary or leasing agencies, would nonetheless be a reasonable and valid exercise by the Secretary of Labor of the rule-making authority delegated to her by Congress. The Secretary was within reason to conclude that any hardship caused by designating the leasing agency's office as the employee's "worksite," even when the employee physically reports to the secondary employer's facility, would ordinarily be alleviated by the additional resources inherent in a joint-employer arrangement. In a joint-employer arrangement, the manpower and resources of two employers are at play, not merely one. Thus, the Secretary was well within reason to conclude that any hardship occasioned by designating the employee's "worksite" as the primary employer's facility would ordinarily be alleviated by the ability of the leasing agency and/or the secondary employer to more easily find a replacement for the employee while on leave which is exactly what occurred in the instant case. Therefore, Plaintiff argues that it cannot be said that the interpretation of "worksite" contained in the prior version of § 825.111(a)(3) for an employee with no fixed worksite, such as truck drivers, who are employed by temporary or leasing agencies lacks any rational basis, so as to be "arbitrary," "capricious," or "manifestly contrary" to the FMLA.
Although the Court agrees with the Tenth Circuit in Harbert that this issue presents "a very close question," the Court, pursuant to the rules of statutory construction applicable to the FMLA as a remedial statute, must construe and interpret its coverages and protections broadly in favor of Plaintiff. Cobb, 452 F.3d at 559. Furthermore, the 50/75 "worksite" provision is, by the very text of the FMLA, an "exclusion" to coverage. 29 U.S.C. § 2611(2)(B)(ii); Cobb, 452 F.3d at 559. As such, the 50/75 provision must be construed "narrowly." Id. With these rules of statutory construction in mind, the Court will afford Chevron deference to 29 C.F.R. § 825.111(a)(3) (1995), and hold that Plaintiff's "worksite" under the FMLA was Staffing Source's office in Dearborn, Michigan.
Additionally, the Court will not give retroactive effect to the new version of § 825.111(a)(3) because the retroactive application of amendments to regulations is disfavored. See Woodward v. Dep't of Justice, 598 F.3d 1311 (Fed.Cir.2010). Regulations, and amendments thereto, are ordinarily presumed not to have retroactive effect. Bauer v. Varity Dayton-Walther Corp., 118 F.3d 1109 (6th Cir. 1997). Specific to the FMLA, Congress did not extend the Secretary of Labor the authority in 29 U.S.C. § 2654 to make its
The prohibition against giving retroactive effect to the amended version of the regulation is likewise supported by the text of the 2009 amended regulations. Eligibility for FMLA protection under the 50/75 exclusion, under both versions of the regulations, is determined as of the date the employee gives notice of the need for leave. 29 C.F.R. § 825.110(f) (1995) and 29 C.F.R. § 825.110(e) (2009). Under both sets of regulations, the date upon which application of the 50/75 exclusion is determined is the date the employee provides notice of the need for leave. 29 C.F.R. § 825.110(f) (1995) and 29 C.F.R. § 825.110(e) (2009). Defendants concede that Plaintiff provided notice of his need for leave in September 2008, ECF No. 6 at 5, which is before the amended regulations took effect on January 16, 2009. As such, the original version of 29 C.F.R. § 825.111(a)(3) (1995) must be applied, and the amended 2009 version cannot be given retroactive effect.
Accordingly, it is
