William A. Hill and Tanica Brown, individually and on behalf of all others similarly situated, Plaintiffs-Appellants,
Delaware North Companies Sportservice, Inc., Defendant-Appellee, Baltimore Orioles Limited Partnership, Intervenor.
Argued: April 4, 2016
from the United States District Court for the Western
District of New York. No. 11-cv-753 (WMS) (JJM) ―
William M. Skretny, Judge.
William A. Hill and Tanica Brown appeal from a judgment of
the United States District Court for the Western District of
New York (William M. Skretny, Judge). The district
court granted summary judgment to Defendant-Appellee Delaware
North Companies Sportservice, Inc., whose subsidiary owns the
concessions at Oriole Park at Camden Yards, as to Hill and
Brown's claims for overtime compensation under the Fair
Labor Standards Act, on the ground that Appellee is an
"amusement or recreational establishment" exempt
from the overtime requirement. We hold that an establishment
that operates on the premises of an amusement or recreational
host, selling goods or services to the host's customers
for their consumption or use as they engage in the host's
amusement or recreational activities, is a
"concessionaire" with an "amusement or
recreational" character. We determine that
Appellee's subsidiary is such a
"concessionaire" and also that its receipts reflect
that its business is seasonal, so that it qualifies for the
overtime exemption. Accordingly, we AFFIRM the judgment of
the district court.
Lynch, Carlson Lynch Sweet & Kilpela, LLP, Pittsburgh, PA
(Jamisen A. Etzel, Carlson Lynch Sweet & Kilpela, LLP,
Pittsburgh, PA, Edward David Hoskins, Law Offices of E. David
Hoskins, LLC, on the brief) for Plaintiffs-Appellants.
Pritchard (Brian M. Hentosz, on the brief), Littler
Mendelson, P.C., Pittsburgh, PA, Terrence M. Connors, Connors
LLP, Buffalo, NY, for Defendant-Appellee.
Celeste Bruce, Rifkin Livingston Levitan & Silver LLC,
Bethesda, MD, James R. Grasso, Phillips Lytle LLP, Buffalo,
NY, for Intervenor.
Pooler, Parker, and Livingston, Circuit Judges.
Barrington D. Parker, Circuit Judge
Fair Labor Standards Act ("FLSA"), 29 U.S.C. §
201 et. seq., strives to combat "labor
conditions detrimental to the maintenance of the minimum
standard of living necessary for health, efficiency, and
general well-being of workers." Id. § 202.
To that end it requires most employers to pay an overtime
premium of one and one-half times the regular rate of pay for
those hours that an employee works in excess of the standard
forty-hour work week. Id. § 207(a)(1). However,
any "amusement or recreational establishment" is
exempt from paying overtime if its operations or receipts
show that its business is seasonal. Id. §
213(a)(3). Plaintiffs- Appellants William A. Hill and Tanica
Brown, who worked at the concessions at Oriole Park, the home
field of the Baltimore Orioles, seek overtime compensation,
which Defendant-Appellee Delaware North Companies
Sportservice Inc. ("DNC Sportservice"), the owner
of these concessions, chose not to pay on the basis of this
exemption. The United States District Court for the Western
District of New York (William N. Skretny, Judge),
granted summary judgment in favor of DNC Sportservice,
reasoning that it was exempt.
appeal calls on us to decide whether a concessions operator
at a place of amusement or recreation qualifies in its own
right as "amusement or recreational, " even though
it does not directly provide the amusement or the recreation.
We determine that it does qualify. Though FLSA does not
define "amusement or recreational, " the
legislative history and an interpretative rule from the
Department of Labor ("DOL") indicate that
"concessionaires" at amusement or recreational
establishments are themselves typical examples of such
establishments. Using the common understanding and definition
of "concessionaire, " we hold that an establishment
at an amusement or recreational host that sells goods or
services to the host's customer's for their
consumption or use during the host's amusement or
recreational activities is a concessionaire that qualifies as
an "amusement or recreational establishment" under
qualify for the exemption, DNC Sportservice must also have
satisfied at least one of the two tests for seasonality.
Under "Test A, " the seasonal operations test, it
must "not operate for more than seven months in any
calendar year." 29 U.S.C. § 213(a)(3). Under
"Test B, " the receipts test, it must be the case
that, "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." Id. We conclude that DNC
Sportservice satisfied the receipts test during the relevant
period and do not rely on the operations test. For all these
reasons, we affirm the judgment of the district court.
relevant facts are undisputed. In November 2010, Maryland
Sportservice, Inc., a wholly-owned subsidiary of DNC
Sportservice, entered into a concession agreement with the
Baltimore Orioles Limited Partnership, which has intervened
in this case. This agreement grants Maryland Sportservice the
right to operate the food, beverage and merchandise sales
concessions at Oriole Park. Oriole Park consists of two
structures: the baseball stadium itself and part of an old
Baltimore & Ohio Railroad warehouse, separated by a
pedestrian promenade known as Eutaw Street.
Sportservice operates entirely within Oriole Park. On game
days Maryland Sportservice operates on every level dozens of
stands (which are hard stands with three cinderblock walls
and a roll-up shutter, where customers walk up to the stand
to make their purchase) throughout the ballpark, selling food
and beverages, or souvenirs and merchandise. Television
monitors in the concourses show the baseball game live so
that baseball fans need not miss any of the action on the
field when purchasing concessions at a stand. Maryland
Sportservice also operates numerous portable concession carts
throughout the ballpark, and its vendors walk through the
seating areas of the ballpark, selling food and beverages.
These services are available only in connection with home
baseball games being played at Oriole Park, and only to
ticket holders who are at Oriole Park to watch a Major League
parts of Maryland Sportservice's operations at Oriole
Park occur on non-game days. It operates a number of clubs
and lounges in the ballpark, which on game days are available
only to ticket holders but are also available for rental on
other days with food that it caters. In addition, it operates
the Orioles Team Store, which sells Orioles apparel and team
souvenirs, and Dempsey's Brew Pub and Restaurant. Both of
these are in the warehouse section at Oriole Park and are
likewise open only to ticket holders on game days. However,
they are also open on non-game days and during the
off-season, and individuals do not require a game ticket to
enter them on these days.
Maryland Sportservice has some operations on non- game days,
the parties agree that "the overwhelming majority of its
business is conducted exclusively with ticket holders during
game baseball games." J.A. 186; see id. at 312.
Appellants do not dispute that its average receipts at Oriole
Park for the six months of 2011 in which receipts were
smallest were not more than 33 1/3% of the average receipts
for the other six months when receipts were the largest.
Receipts in 2010 yield an even more stark comparison between
the busiest six months and the others. Before Maryland
Sportservice started operating the concessions at Oriole Park
in 2010, ARAMARK operated them under substantially the same
conditions. When the 2010 receipts for ARAMARK and Maryland
Sportservice are considered together, the result is that the
average receipts of these entities during the off-season
months of January through March and October through December
are a mere 4.86% of the average receipts for the baseball
season months of April through September. This disparity
between the baseball season and the off- season is consistent
with the fact that Maryland Sportservice has around 600
employees working at its operations on game days but as few
as 12 employees working at the Team Store and Dempsey's
on non-game days. This disparity is also typical of the
concessions that DNC Sportservice operates at baseball
stadiums through various subsidiaries. Its concession
services at the Great American Ball Park in Cincinnati, Ohio,
Progressive Field in Cleveland, Ohio, and Metro Bank Park in
Harrisburg, Pennsylvania all had average receipts for the six
months in 2010 with the smallest receipts that were not more
than 33 1/3% of the average receipts for the other six months
of 2010. Like Oriole Park, each of these other facilities is
a baseball-only ballpark.
were employees of Maryland Sportservice's concessions.
Hill was employed from March through most of June 2011, and
Brown was employed from February to June 2011. individuals
worked primarily as retail supervisors primarily at the
Orioles Team Store but also did some work at the mini-gift
and souvenir stands in Oriole Park. Appellants regularly
worked in excess of forty hours, but Maryland Sportservice
classified them as exempt from FLSA's overtime provision
pursuant to the "amusement or recreational
establishment" exemption and paid them only their
regular hourly rate for the excess hours. investigated
Maryland Sportservice's use of the exemption in 2012, but
informed it on January 2, 2013 that DOL had found no
violation of FLSA. The DOL provided no further explanation.
September 2011, Hill commenced a putative class action,
alleging that DNC Sportservice failed to pay him and other
similarly-situated employees overtime compensation in
violation of FLSA. In the same month, Brown filed a written
consent to join this action. In March 2013, the Baltimore
Orioles Limited Partnership successfully moved to intervene.
separate reports and recommendations on July 28, 2014 and
December 15, 2014, the magistrate judge to whom the case was
referred recommended that the district court grant DNC
Sportservice's motions for summary judgment. The
magistrate judge reasoned that DNC Sportservice qualified for
the "amusement or recreational establishment"
exemption from FLSA's overtime requirement because the
concession activities "were an integral part of the
amusement and recreational character of Oriole Park."
Special App. 6. Turning to seasonality, it decided that DNC
Sportservice "satisfied Test A of § 213(a)(3) since
it did not operate for more than seven months in 2011"
and declined to reach Test B. Id. at 8.
district court adopted the respective reports and
recommendations, and entered judgment. The Plaintiffs
review of the district court's grant of summary judgment
is de novo. Pippins v. KPMG, LLP, 759 F.3d 235, 239
(2d Cir. 2014). We may affirm summary judgment on any grounds
with sufficient support in the record, even if they differ
from the ones on which the district court relied. McElwee
v. Cty. of Orange, 700 F.3d 635, 640 (2d Cir. 2012).
Whereas the district court appeared to suggest a general
principle that an establishment can qualify if its operations
are an integral part of a host establishment's amusement
or recreational character, we adopt a narrower rule that a
"concessionaire, " as defined below, has the
amusement or recreational character of its ...