General practitioners and non-attorneys may or may not be aware that the applicability of the FLSA’s overtime provision to various aspects of a business is not always uniform across the “establishment.” This is because the FLSA’s implementing regulations contemplate multiple distinct “establishments” even within the same physical premises. 29 C.F.R. § 779.305.Two new District Court decisions highlight this analysis and how it can impact specific claims under the so-called “seasonal recreation and amusement exemption.” Feagley v. Tampa Bay Downs, Inc., 2012 U.S. Dist. LEXIS 81757 (M.D. Fla. June 13, 2012); McMillan v. Bsa Aloha Council, 2012 U.S. Dist. LEXIS 83346 (D. Haw. June 15, 2012). This exemption excludes from overtime protection “any employee employed by an establishment which is an amusement or recreational establishment, organized camp, or religious or non-profit educational conference center if (A) it does not operate for more than seven months in any calendar year, or (B) during the preceding calendar year, its average receipts for any six months of such year were not more than 33 1/3 per centum of its average receipts for the other six months of such year.”
In Feagley, the parties did not dispute whether the Tampa Bay Downs racetrack was a recreational establishment within the meaning of 29 U.S.C. § 213(a)(3), and thus its employees exempt from overtime. Rather, the plaintiff, a card dealer in the Silks Poker Room operated on the premises, alleged that the poker room was a separate establishment not so exempt, and that the poker room establishment had violated his FLSA rights by forcing him and other dealers to “share their tip pool with non-tipped employees such as card room supervisors.” When addressing this issue on Tampa Bay Downs’ motion for summary judgment, the court found questions of fact requiring trial to determine whether the two establishments truly were separate under the legal test set forth in the regulations, namely “1) whether Tampa Bay Downs is physically separated from the Silks Poker Room; (2) whether there is functional separation between the two units; and (3) whether there is interchange of employees between the poker room and the operation at large.”
In McMillan, plaintiff camp ranger alleged that that the day camp operated by the Boys Scouts for which he worked was “actually two separate establishments [under the FLSA]: a four-week summer program [which qualified for the exemption], and the rest of Camp Pupukea’s operations [which did not].” He alleged that the non-summer camp “establishment” operated year round, and thus on its own could not meet the seasonal exemption test. The Court rejected this challenge, citing the lack of any “indication that [Boy Scouts] Aloha Council operates the four-week program as a unit separate from any other activities at Camp Pupukea, or that the four-week program does not interchange employees with the rest of Camp Pupukea’s operations.” Because the operative “establishment” met the exemption test, and because the ranger plaintiff’s duties, “which generally called for maintaining the campgrounds and their facilities, constituted an integral part of operating campsites,” the exemption applied.
FLSA questions involving application of the establishment-based exemptions, recently discussed here, can be highly technical and, in certain industries, there is little guiding authority. Employers must begin with the FLSA regulations and a detailed analysis of their establishment with counsel to determine what exposures exist. And of course state law must be reviewed in conjunction with any federal analysis.