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Paczkowski v. My Choice Family Care, Inc.

United States District Court, W.D. Wisconsin

April 24, 2019

KATY PACZKOWSKI, individually and on behalf of all others similarly situated, Plaintiffs,
v.
MY CHOICE FAMILY CARE, INC., Defendant.

          OPINION AND ORDER

          STEPHEN L. CROCKER, MAGISTRATE JUDGE

         Plaintiff 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.

         Before 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.[1] 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.

         UNDISPUTED FACTS

         Defendant 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 organization.

         OPINION

         I. Legal Standard

         Defendant 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.

         If the 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).

         II. The Rule at Issue

         Wisconsin's 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.

         The parties agree that the only term in this regulation that might apply to My Choice is “mercantile establishment.”[2] “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, “mercantile” means

“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 ...

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