Ray v. County of Los Angeles

The panel affirmed the district court’s order denying a defendant county’s motion to dismiss, on Eleventh Amendment immunity grounds, a putative collective action under the Fair Labor Standards Act; reversed the district court’s order regarding the putative collective period; and remanded.

Plaintiff homecare providers were employed through California’s In-Home Supportive Services program, which is implemented and run by the State and its counties. In October 2013, the Department of Labor promulgated a new rule providing that homecare providers would be entitled to overtime pay under the FLSA. The final rule had an effective date of January 1, 2015. In 2014, the District Court for the District of Columbia vacated the rule. On August 21, 2015, the D.C. Circuit reversed and ordered the district court to enter summary judgment for the Department of Labor. On September 14, 2015, the Department of Labor announced that it would not bring enforcement actions against any employer for violations of the new rule for 30 days after issuance of the mandate of the D.C. Circuit. On October 27, 2015, the Department of Labor said it would not begin enforcing the new rule until November 12, 2015. The State began paying overtime wages on February 1, 2016.

Affirming in part, the panel held that the County of Los Angeles was not entitled to Eleventh Amendment immunity. The panel assumed without deciding that a county might be entitled to immunity if acting as an arm of the state. The panel held that, under the five-part Mitchell test, the County was not an arm of the State when it administered the IHSS program because the state-treasury factor, which is the most important, and all but one of the other Mitchell factors weighed against immunity. The panel held that a later Supreme Court case, Hess v. Port Auth. Trans-Hudson Corp., 513 U.S. 30 (1994), did not undermine Mitchell such that it should be overruled.

Reversing in part, the panel held that the effective date of the Department of Labor’s rule was January 1, 2015, because the legal effect of the D.C. Circuit’s vacatur was to reinstate the original effective date. The panel held that the Department of Labor’s choice against enforcing the rule until November 12, 2015, did not eliminate the availability of private rights of action until that date. Accordingly, the beginning of the putative collective period was January 1, 2015.

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