The U.S. Court of Appeals for the Third Circuit has affirmed a district court's summary judgment ruling in favor of the Department of Labor in *Martin J. Walsh v. Wicare Home Care Agency LLC* (3d Cir. 2026). The decision, filed Jan. 6, represents a victory for federal labor enforcement against home care agencies that allegedly failed to comply with wage and hour requirements.
The case centers on allegations that Wicare Home Care Agency LLC, an employer of in-home care providers, violated the Fair Labor Standards Act by failing to pay employees required minimum wages and overtime premiums. The company and its principal, Luis D. Hernandez, appealed after the U.S. District Court for the Middle District of Pennsylvania granted summary judgment for then-Labor Secretary Martin Walsh.
At the heart of the legal dispute is Wicare's challenge to a federal regulation that denies third-party employers the benefit of the FLSA's "companionship services" exemption. Under 29 U.S.C. § 213(a)(15), certain companionship services workers are exempt from the Act's wage and hour protections. However, Wicare argued that a regulation preventing third-party employers from claiming this exemption is inconsistent with the FLSA and therefore unlawful.
The Third Circuit panel, consisting of Chief Judge Michael Chagares and Circuit Judges Justin Porter and Jane Roth, rejected Wicare's arguments. In the opinion authored by Chief Judge Chagares, the court noted that "Congress expressly delegated to the Secretary" the authority to implement FLSA regulations, suggesting the regulatory framework challenged by Wicare falls within the Department of Labor's statutory authority.
The companionship services exemption has been a contentious issue in labor law, particularly as the home care industry has grown substantially in recent years. The exemption traditionally allowed certain domestic workers providing companionship services to elderly or infirm individuals to be excluded from federal minimum wage and overtime requirements. However, regulatory changes have limited when third-party agencies can claim this exemption for their employees.
The underlying district court case began in 2022 when the Department of Labor filed suit in the Middle District of Pennsylvania under case number 1:22-cv-00224. District Judge Yvette Kane presided over the proceedings that culminated in summary judgment for the government. The case was submitted to the Third Circuit under Local Appellate Rule 34.1(a), which governs certain streamlined appeals procedures.
This ruling adds to the growing body of federal appellate decisions addressing wage and hour compliance in the home care industry. As demand for in-home care services continues to increase with an aging population, federal enforcement agencies have intensified scrutiny of employment practices in this sector.
The decision carries particular significance for home care agencies operating in Pennsylvania, New Jersey, Delaware, and the U.S. Virgin Islands - the states within the Third Circuit's jurisdiction. While the opinion is marked as "not precedential" and cannot be cited as binding authority in future cases, it demonstrates the appellate court's willingness to uphold district court rulings favoring Department of Labor enforcement actions.
For Wicare and Hernandez, the affirmance means the summary judgment ruling stands, likely requiring compliance with any monetary judgments or injunctive relief ordered by the district court. The ruling also suggests that challenges to the regulatory framework governing third-party employer exemptions under the FLSA face an uphill battle in federal court.
The case reflects broader tensions in employment law as traditional worker classifications and exemptions are tested against evolving business models in sectors like home care, where third-party agencies increasingly serve as intermediaries between workers and clients.
Home care agencies and their legal counsel should note that this decision reinforces federal courts' deference to Department of Labor interpretations of FLSA exemptions, particularly where Congress has granted explicit regulatory authority. The ruling suggests that third-party employers seeking to claim companionship services exemptions will need to navigate carefully within existing regulatory frameworks rather than challenging those frameworks in court.
The decision also underscores the importance of proper wage and hour compliance for home care agencies, as federal enforcement actions in this area continue to result in favorable outcomes for the Department of Labor. Agencies in the Third Circuit and elsewhere should ensure their pay practices align with current FLSA requirements and regulations to avoid similar enforcement actions.