Petroski v. H & R Block Enterprises, LLC
750 F.3d 976
8th Cir.2014Background
- H&R Block hires tax professionals seasonally; off-season absence of obligation to rehire next year.
- To be rehired for the next season, professionals must complete 24 hours of CPE and go through an application/interview; term of employment ends with the tax season.
- CPE training time is not paid; most courses are external and not tied to actual client work.
- H&R Block charges a $20 access fee for its courses; courses largely from Commerce Clearing House and may be used elsewhere.
- District court granted summary judgment; it treated the professionals as trainees, not employees, for FLSA purposes; a consolidated FLSA collective action was involved.
- The issue is whether the rehire training time constitutes compensable work under the FLSA; the court reviews de novo for summary judgment decisions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether rehire training time is compensable under the FLSA | Plaintiffs contend the tax pros are employees during training | Defendant contends the trainees are not employees and training is not work | Not an employee; trainees not entitled to wages for training |
| Whether the case falls under an employee-versus-trainee framework using Portland Terminal factors | Waterman/Labor Ready framework should apply to determine status between seasons | FLSA status not governed by NLRA cases; Portland Terminal framework applies | Portland Terminal-based analysis supports trainee status; no immediate advantage to employer |
| Whether six WHD Field Operations Handbook criteria support trainee status | Disputed understanding of wage entitlement by trainees | Handbook and practices indicate training is for eligibility, not wages | WOE criteria support non-employee trainee status; no wages owed |
Key Cases Cited
- Waterman S.S. Corp. v. Waterman, 309 U.S. 206 (1940) (employment status in NLRA context; not controlling under FLSA)
- Labor Ready, Inc. v. United Steelworkers, 253 F.3d 195 (4th Cir. 2001) (NLRA-based framework not applicable; different context from FLSA)
- Walling v. Portland Terminal Co., 330 U.S. 148 (1947) (training trainees not employees when no immediate advantage)
- Donovan v. Trans World Airlines, Inc., 726 F.2d 415 (8th Cir. 1984) (employer-employee determinations; common-law factors)
- Donovan v. American Airlines, Inc., 686 F.2d 267 (5th Cir. 1982) (flight attendant trainees; non-employee status for training)
- Reich v. Parker Fire Protection Dist., 992 F.2d 1023 (10th Cir. 1993) (training costs and benefits; nondispositive)