Hill v. Delaware North Companies Sportservice, Inc.
838 F.3d 281
2d Cir.2016Background
- Maryland Sportservice (a DNC subsidiary) operated food, beverage, and merchandise concessions exclusively within Oriole Park (home of the Baltimore Orioles) under a concession agreement beginning November 2010.
- Most concession sales occurred on game days to ticket holders; non‑game operations (Team Store, Dempsey’s, clubs) were minimal by comparison.
- Plaintiffs Hill and Brown worked for Maryland Sportservice, regularly worked overtime, and sued for unpaid overtime under the FLSA.
- DNC asserted the § 213(a)(3) exemption for "amusement or recreational establishments" because the concessions were seasonal; the district court granted summary judgment for DNC.
- The Second Circuit considered whether a concessions operator at an amusement/recreational host can qualify on its own as an "amusement or recreational establishment," and whether the seasonality tests (Test A: ≤7 months operation; Test B: receipts test) are met.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a concessions operator at an amusement/recreation host qualifies as an "amusement or recreational establishment" under § 213(a)(3) | Concessions selling only food/retail lack recreational/amusement character and thus cannot claim the exemption on their own | Concessionaires that sell goods/services to host customers for use during the host's recreational activity are themselves "amusement or recreational establishments" | A concessionaire that operates on the host's premises selling goods/services to the host's customers for use/consumption during the host's amusement qualifies as an "amusement or recreational establishment" |
| How to define "concessionaire" for exemption purposes | (Implicit) concessionaires must be combined with the host or otherwise cannot qualify independently | Concessionaires are establishments selling goods/services on the host's premises to host customers for consumption/use during the host's activities | Court adopts narrow definition: concessionaire = establishment with contractual arrangement to sell to host's customers on premises for use during host's amusement/recreation |
| Whether Maryland Sportservice is a concessionaire given limited non‑game operations | Non‑game revenue and separate warehouse facilities show it is not wholly a concessionaire and should be treated as part of a single integrated establishment with the host | Operates entirely within Oriole Park and primarily serves ticket‑holding fans during games; non‑game activity is de minimis | Maryland Sportservice is a concessionaire; off‑season, non‑game activity is de minimis and does not negate concessionaire status |
| Whether the seasonal exemption applies (Test A or Test B) | Even if concessionaire, genuine factual dispute exists about seasonality of the combined operation so exemption uncertain | Maryland Sportservice meets seasonality under Test B (receipts test) using DOL guidance for new establishments and receipts from comparable stadium operations and predecessor ARAMARK | Court affirms exemption on Test B grounds: receipts for slow six months ≤ 33 1/3% of other six months (including use of comparable establishments and predecessor receipts for a partial preceding year) |
Key Cases Cited
- Chen v. Major League Baseball Properties, 798 F.3d 72 (2d Cir. 2015) (interpreting "establishment" under § 213(a)(3))
- Pippins v. KPMG, LLP, 759 F.3d 235 (2d Cir. 2014) (de novo review of summary judgment)
- Davis v. J.P. Morgan Chase & Co., 587 F.3d 529 (2d Cir. 2009) (FLSA exemptions construed narrowly)
- Chao v. Double JJ Resort Ranch, 375 F.3d 393 (6th Cir. 2004) (discussing ambiguity of "recreational establishment")
- Jeffery v. Sarasota White Sox, Inc., 64 F.3d 590 (11th Cir. 1995) (seasonal operations test applied to baseball franchise)
- Barfield v. New York City Health & Hosp. Corp., 537 F.3d 132 (2d Cir. 2008) (weight of DOL opinion letters)
- Christensen v. Harris County, 529 U.S. 576 (2000) (opinion letters do not receive Chevron deference)
- Skidmore v. Swift & Co., 323 U.S. 134 (1944) (persuasive weight of agency interpretations)
- McElwee v. County of Orange, 700 F.3d 635 (2d Cir. 2012) (affirming summary judgment may be upheld on any supported ground)
- Corley v. United States, 556 U.S. 303 (2009) (rejecting literal readings that produce absurd results)