United States District Court, W.D. Wisconsin
KATY PACZKOWSKI, individually and on behalf of all others similarly situated, Plaintiffs,
MY CHOICE FAMILY CARE, INC., Defendant.
OPINION AND ORDER
STEPHEN L. CROCKER, MAGISTRATE JUDGE
Katy Paczkowski brings this action on behalf of herself and
all other similarly situated employees, as a collective and
class action against her former employer, defendant My Choice
Family Care, Inc. (“My Choice”), for violations
of the Fair Labor Standards Act, 29 U.S.C. § 201, et
seq., and Wisconsin wage and hour laws. Paczkowski is a
former Care Manager at My Choice, a non-profit managed care
organization. In this suit, Paczkowski contends that My
Choice violated the FLSA and Wisconsin law by failing to pay
overtime compensation to her and other Care Managers.
the court is My Choice's motion to dismiss
Paczkowski's state law claim on the ground that My Choice
is a nonprofit organization to which Wisconsin's overtime
regulation, Wis. Admin. Code § DWD 274.03, does not
apply. Dkts. 12, 13. Paczkowski does not dispute
My Choice's nonprofit status but disagrees with its
contention that nonprofits generally are not covered by
Wisconsin's overtime regulation. Because I agree that the
terms of the regulation do not apply to My Choice, I am
granting My Choice's motion for partial dismissal.
My Choice is a private “managed care
organization” that provides various healthcare and
related services to adults and seniors with disabilities. Am.
Compl., dkt. 23-1, ¶ 12. My Choice provides this care
through its Care Managers, such as plaintiff, who provide
ongoing, day-to-day case management services for its members.
Id. at ¶ 17. Since its inception in 2016, My
Choice has been approved by the IRS as a 501(c)(3) nonprofit
contends that as a nonprofit, it is not covered by
Wisconsin's overtime regulation, Wis. Admin. Code §
DWD 274.03, and therefore plaintiff's state law claims
must be dismissed. Defendant's motion, which appears to
present a question of first impression in Wisconsin, requires
this court to interpret provisions of Wisconsin's
administrative code. In doing so, the court employs ordinary
principles of statutory construction. Orion Flight
Servs., Inc. v. Basler Flight Serv., 2006 WI 51, ¶
18, 290 Wis.2d 421, 435, 714 N.W.2d 130, 137; Basinas v.
State, 104 Wis.2d 539, 546, 312 N.W.2d 483 (1981).
“Statutory interpretation begins with-and, absent
ambiguity, is confined to-the language of the statute,
” and statutory words and phrases, unless technical in
nature or carrying a peculiar legal meaning, are construed
according to common and ordinary usage. Fuchsgruber v.
Custom Accessories, Inc., 2001 WI 81, ¶ 10, 244
Wis.2d 758, 628 N.W.2d 833; Peterson v. Midwest Sec. Ins.
Co., 2001 WI 131, ¶ 19, 248 Wis.2d 567, 636 N.W.2d
727; see also Wis. Stat. § 990.01(1). In
determining a term's ordinary and common meaning, a court
may consult a dictionary. Rouse v. Theda Clark Med. Ctr.,
Inc., 2007 WI 87, ¶ 21, 302 Wis.2d 358, 735 N.W.2d
30. In addition, the court should consider the statute's
context and structure. State ex rel. Kalal v. Circuit
Court for Dane Cty., 2004 WI 58, ¶ 46, 271 Wis.2d
633, 663, 681 N.W.2d 110, 124. “[S]tatutory language is
interpreted in the context in which it is used; not in
isolation but as part of a whole; in relation to the language
of surrounding or closely-related statutes; and reasonably,
to avoid absurd or unreasonable results.” Id.
rule's meaning is plain, then the court's inquiry
ends. State v. Reed, 2005 WI 53, ¶ 13, 280
Wis.2d 68, 695 N.W.2d 315. If, on the other hand, an
administrative regulation is ambiguous, then the court may
resort to extrinsic aids to determine the agency's
intent. Williams v. Integrated Community Services,
Inc., 2007 WI.App. 159, ¶ 13, 303 Wis.2d 697, 736
N.W.2d 226. A regulation is ambiguous if “it is capable
of being understood by reasonably well-informed persons in
either two or more senses.” Hacker v. State
Dep't of Health & Soc. Servs., 197 Wis.2d 441,
454, 541 N.W.2d 766, 770 (1995). In resolving the ambiguity,
the court defers to the agency's interpretation and
application of its own regulations unless the interpretation
is inconsistent with the regulation or is clearly erroneous.
Williams, 2007 WI.App. at ¶ 13. When
interpreting a state regulation, this court's task is to
predict how the Wisconsin Supreme Court would answer the
question. Liberty Mut. Fire Ins. Co. v. Statewide Ins.
Co., 352 F.3d 1098, 1100 (7th Cir. 2003).
The Rule at Issue
Department of Workforce Development (DWD) is charged with
promulgating “rules fixing a period of time, or hours
of beginning and ending work during any day, night or week,
which shall be necessary to protect the life, health, safety
or welfare of any person[.]” Wis.Stat. §§
103.001, 103.02. Weissman v. Tyson Prepared Foods,
Inc., 2013 WI.App. 109, ¶ 6, 350 Wis.2d 380,
384-85, 838 N.W.2d 502, 504. Pursuant to that authority, DWD
enacted Wis. Admin. Code § DWD 274.03, which requires
“each employer subject to this chapter” to pay
its employees “time and one-half the regular rate of
pay for all hours worked in excess of 40 hours per
week.” By its terms, Chapter 274 applies only to
employees employed in manufactories, mechanical or mercantile
establishments, beauty parlors, laundries, restaurants,
confectionary stores, telegraph or telephone offices or
exchanges or express or transportation establishments,
hotels, and by the state, its political subdivisions and any
office, department, independent agency, authority,
institution, association, society or other body in state or
local government created or authorized to be created by the
constitution or any law, including the legislature and the
courts . . .
Wis. Admin. Code § DWD 274.015.
parties agree that the only term in this regulation that
might apply to My Choice is “mercantile
establishment.” “Mercantile” happens to be one
of only five defined terms in Chapter 274, but as discussed
below, DWD's definition is so turbid that it defies
unequivocal exegesis. According to DWD's rules,
“pertaining to merchants or trade, ” and is
synonymous with the word commercial. Commercial is viewed
with regard to profit or designed for profit; designed for
mass appeal, emphasizing skill and subjects useful in
business. “Trade” means the business or work in
which one engages regularly, an occupation requiring manual
or mechanical skill; the persons engaged in an occupation,
business, or industry, dealings between persons or groups;
the business of buying and ...