Hilda L. Solis, US Department of Labor v Jasmine Hall Care Homes Inc, Hall Care Homes, George Hall, Estela Hall
Case No. 08-15223 D.C. No. CV-05-01306-GEB
Filed July 1, 2010
Ninth Circuit Court of Appeal

Court Reverses Verdict on Union’s Unfair and Unlawful Competition Lawsuit

This case involves Jasmine Hall Care Homes and two individuals, George and Estela Hall, who operate residential care facilities for developmentally disabled adults.

The lawsuit was initiated by the Secretary of Labor for alleged violations of the Fair Labor Standards Act after the defendants were found to have “willfully violated” overtime compensation requirements.

The lawsuit was based on an investigator’s report that showed that Jasmine Hall’s timekeeping records were inadequate. The report also observed the following:

• That employees have rotating shifts and they sleep at the facility when they were supposed to be off-duty
• That although only one employee in an 8-hour duty, more than one employee is attending to clients
• Employees were not free to leave during their five 24-hour shifts a week, except on authorized business.

In addition to this, live-in residential staff members were required to share rooms with other staff members and staff aides often had to interrupt their personal time to attend to clients.

Despite all these work, the employees were paid only for eight hours of the whole day they spent on duty.

In response, however, Jasmine Hall invoked some provisions of the state law, specifically DOL Regulation, 29 C.F.R. section 785.23, which also addresses the application of the Fair Labor Standards Act, regarding employees who reside on company premises and points out the difficulty of determining the hours worked by workers. This regulation allows the employer to make reasonable agreement with the employees regarding which hours will be paid.

The district court however held that Jasmine Hall Care homes cannot invoke that regulation to avoid wage and hour obligations. The defendants appealed the partial summary judgment while the DOL moved to dismiss for lack of jurisdiction.

The Ninth District Court of Appeal therefore denied the motion to dismiss without prejudice.