Jоhn MANN, on behalf of himself and others similarly situated, Plaintiff-Appellee, v. Michael FALK and Debra Falk, d.b.a. Adelaide Shores RV Resort, Michael Falk, individually, Debra Falk, individually, Defendants-Appellants.
No. 12-16434
United States Court of Appeals, Eleventh Circuit.
July 9, 2013.
Before WILSON, PRYOR and ANDERSON, Circuit Judges.
Non-Argument Calendar.
Elizabeth Coke, Jiles David Richeson, Richeson & Coke, PA, Fort Pierce, FL, for Defendants-Appellants.
This appeal presents the issue whether a recreational vehicle park qualifies as a recreational establishment that is statutorily exempt from providing its employees overtime compensation under the Fair Labor Standards Act. John Mann served for several years as the maintenance man and groundskeeper at the Adelaide Shores RV Resort, and after he was fired, he sued the owners of the resort, Michael and Debra Falk, for unpaid overtime compensation under the Act. See
I. BACKGROUND
Adelaide Shores is a recreational vehicle park that caters to retirees who travel to Florida during the winter. Adelaide Shores derives approximately 92 percent of its income from renting lots, and the remainder of its income from selling recreational vehicles. Approximately 10 percent of the recreational vehicle lots are occupied permanently, whilе other lots are leased yearly and occupied periodically. The residents of Adelaide Shores sign a residential lease agreement, which refers to Adelaide Shores as the “landlord” and the residents as “tenants.” All annual leaseholders and permanent residents are required to pay the majority of their annual rent in November.
Michael Falk hired Mann to perform maintenance and landscaping tasks at Adelaide Shores. Mann worked as an independent contractor from May 2004 until August 2009, when Mann became Falk‘s employee. While Mann worked at Adelaide Shores, its residents could participate in free daily activities on its grounds, and Adelaide Shores had golf professionals
Mann complained of retaliation for protesting the denial of overtime compensation,
The district court granted partial summary judgment to both parties. The district court granted partial summary judgmеnt to Mann on the ground that the Falks were an employer under the Fair Labor Standards Act and Adelaide Shores did not qualify as a recreational establishment. The district court granted summary judgment in favor of the Falks on the ground that Mann‘s claim for unjust enrichment was preempted by the Insurance Contributions Act. Later, a jury found that the Falks had not retaliated against Mann, but that the Falks had violated the overtime compensation law and owed Mann $37,007.94 in unpaid wages.
II. STANDARD OF REVIEW
We review a summary judgment de novo and view the evidence in the light most favorable to the nonmoving party. See Gregory v. First Title Of Am., Inc., 555 F.3d 1300, 1301 (11th Cir. 2009). Summary judgment is appropriate when there exists no genuine issue of material fact and the moving party is entitled to judgment as a matter of law.
III. DISCUSSION
The Falks argue that Adelaide Shores satisfies the two-part test to be eligible for the recreational exemption to the overtime compensation provision of the Fair Labor Standards Act. The Falks contend that Adelaide Shores qualifies as a recreational establishment because it is a destination getaway that offers activities for its clientele and its income flow establishes that it is a seasonal business. Because we conclude that Adelaide Shores does not qualify as a recreational establishment, we need not reach the issue of whether the business is seasonal.
The Act requires emрloyers to pay employees at least one and one-half times their regular pay for hours worked in excess of 40 hours each week.
The provisions of ... section 207 of this title shall not apply with respect to ... any employee employed by an establishment which is an amusement or recreational establishment ... if (A) it does not operate fоr 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....
The Act does not describe the qualities of a “recreational establishment,” but the Department of Labor has issued an regulation interpreting the term. “We defer to those regulations when the statutory language is ambiguous or the statutory terms are undefined.” Josendis v. Wall to Wall Residence Repairs, Inc., 662 F.3d 1292, 1299 (11th Cir. 2011). The regulatiоn defines a “recreational establishment” as an “establishment[ ] frequented by the public for its ... recreation.”
Consistent with the regulation, our precedents establish that the business of a recreational establishment is to provide amusement or entertainment for its customers. This Court has held that a minor league baseball team provided the type of “recreational activity” to qualify it as an amusement or recreational establishment. Jeffery v. Sarasota White Sox, Inc., 64 F.3d 590, 595 (11th Cir. 1995). We also have recognized that a canine racetrack qualifiеs as an amusement or recreational establishment. Alvarez Perez, 515 F.3d at 1156.
A recreational establishment must also sell recreation or entertainment as its “principal activity.” Although it is clear that a baseball team and a racetrack derive their income from thе recreation that they provide, the issue is more complicated for a business that promotes, but does not sell, recreational activities. When presented with that dilemma in Brennan v. Texas City Dike & Marina, Inc., 492 F.2d 1115 (5th Cir. 1974), our predecessor court devised a “principal activity” test to dеtermine whether a business qualifies as a recreational establishment. Id. at 1119. In Texas City, the Marina argued that it qualified as a recreational establishment because it supplied goods and services used “for recreational boating and fishing in and on the Gulf of Mexico,” but we concluded that selling goods used in those recreational activities was not enough. Id. at 1118-20. We determined from the legislative history of the exemption and the opinions of the Wage and Hour Administrator that the exemption applied to businesses that were recreational enterprises, such as golf courses, amusement parks, carnivals, circuses, sports parks, pari-mutuel racing parks, summer camps, sport boating, and fishing. Id. at 1118. But we found it difficult to determine whether the Marina qualified as a recreational entеrprise because of the “variegated nature” of its business, which ranged from selling boats, trailers, and convenience items to performing boat maintenance. Id. at 1119. We decided to classify the Marina based on “its principal activity” as determined by “major inсome source.” Id. at 1119. Because the Marina derived the majority of its income from “selling expensive recreational hardware” like boats and trailers instead of providing recreation, we held that the Marina was “ineligible for [an] exemption as a ... rеcreational establishment.” Id. at 1120.
The Wage and Hour Division of the Department of Labor has applied our “principal activity” test to determine if a
The Division also concluded in an earlier opinion letter that a dude ranch did not qualify as a recreational estаblishment. Wage-Hour Op. Letter, No. 1276 (May 6, 1994). The Division mentioned that the dude ranch provided “vacation packages,” which “include[d] lodging at ... [a] guest cabin[ ] or guest room[ ], all meals, and a wide variety of recreational activities” that were “held or originate[d] on the ranch‘s premises.” Id. Despite its recreational activities, the Division likened the dude ranch to a “resort hotel” and opined that the dude ranch did not qualify as an amusement or recreational establishment. Id.
Based on our precedent in Texas City and the persuasive opinions of thе Division, we conclude that Adelaide Shores RV Resort does not qualify as a recreational establishment. The principal activity of Adelaide Shores is selling recreational vehicle lots and recreational vehicles. See Texas City, 492 F.2d at 1119. Adelaide Shores promotes and even provides some recreational activities, but providing recreation is not its principal activity. The majority of recreational activities at Adelaide Shores are organized and funded by the residents. Like a resort hotel, Adelaide Shores uses the community activities to entice retirees to visit and purchase a site for their recreational vehicle.
The Falks argue that its clientele visit Adelaide Shores for its recreation and that necessarily makes the recrеational vehicle park a recreational establishment, but we disagree. Undoubtedly, retirees come to Adelaide Shores for recreation, but that does not transform the business itself into a recreational entity. Under the Falks’ reasoning, an establishment that provides recreation, but is not in the business of recreation, like a store that sells pool supplies and toys, would qualify. To accept the Falks’ argument would “permit an exemption to swallow the FLSA.” Id.
The district court did not err when it entered judgment in favor of Mann‘s complaint for unpaid overtime compensation. Adelaide Shores did not qualify as a recreational establishment because its principal activity, selling recreational vehicles and leasing lots to house those vehicles, is not reсreational in nature. Because Adelaide Shores did not qualify for the exception to the overtime compensation law, it had to
IV. CONCLUSION
We AFFIRM the judgment in favor of Mann for unpaid overtime compensation.
AFFIRMED.