Monday, August 17, 2015

No salary for volunteers who worked at Major League Baseball's FanFest

The Second Circuit on a regular basis reminds us that the Fair Labor Standards Act has a million exceptions to the rule that employees are entitled to the minimum wage and/or overtime pay. In this case, the Court says that unpaid volunteers who worked at Major League Baseball's Fan Fest in 2013 were not entitled to any compensation.

The case is Chen v. Major League Baseball Properties, decided on August 14. Under the FLSA, "the minimum wage provisions “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 for more than seven months in any calendar year.” Was Fan Fest an amusement or recreational establishment? The Second Circuit says it was. Here are the facts, and only the facts:

In July 2013 Defendants organized a series of All‐Star Week festivities throughout New York City, the host city of that year’s Major League Baseball All‐Star Game. These included a race, concert, fantasy camp, parade, and an event called FanFest. Between July 12 and July 16, 2013, FanFest operated in the Jacob K. Javits Center ... . Defendants ... described FanFest as “the largest interactive baseball theme park in the world.” The venue floor map distributed to patrons proclaims that FanFest offers “[o]ver 450,000 [s]quare [f]eet to [h]it, [p]itch, [c]atch, [s]hop, [e]at & [l]ive [b]aseball.” Activities at FanFest included baseball themed video games, photo booths, a simulated baseball dugout and fields, baseball clinics, batting cages, music offerings, and autograph signing. In addition, a news item referenced in the Complaint notes that “[a] green carpeted replica baseball diamond” was constructed for the event. Memorabilia collections, a historical presentation on the Negro Leagues, and the world’s largest baseball were also on display.

Defendants staffed the 2013 All‐Star Week events primarily with volunteers – some two thousand in total. The volunteers carried out a range of duties including greeting customers, answering questions and providing directions, taking tickets, checking credentials, staffing activities, and distributing gifts. Chen alleges that although these individuals were identified as volunteers, they expected and received compensation in the form of free admission to events and in‐kind benefits such as t‐shirts, caps, drawstring backpacks, fanny packs, water bottles, baseballs, lanyards, free admission to FanFest for each volunteer and a guest, and a chance to win a pair of tickets to the All‐Star Game.
Remember when the All Start Game was just the All Star Game? When baseball's best players faced off  and it was the only time (pre-cable TV) an American League fan could see players from the National League and no one cared who won the game because it was just an exhibition? These days, Baseball Incorporated generates as much money as possible from these games, hosting a home run derby the night before, charging an arm and a leg for tickets and the games now count because the league that wins has home-field advantage in the World Series. We have forged ahead to the present, with Fan Fest and other spectacles.

Anyway, plaintiffs want a collective action to recover lost wages. They are not entitled to any. The Second Circuit says Fan Fest is "an establishment which is an amusement or recreational establishment" under the FSLA. Since it falls under the exception, plaintiffs get no money for their work, only joyous memories.

The Court reasons that "'establishment' for purposes of the exemption ... mean[s] a distinct, physical place of business as opposed to an integrated multiunit business or enterprise. Under the regulations, this definition is not limited to retail endeavors. While Chen "argues that although he physically worked at FanFest, he was an employee of Defendants Major League Baseball and the Office of the Commissioner of Baseball, who planned and controlled all aspects of FanFest’s operations," "This physical separation is determinative in deciding whether these business units constitute a single establishment or multiple ones. Where such business units are not located at the same premises, overlap in operations and personnel is immaterial to determining whether they are separate establishments."

To win this case, MLB must establish that  FanFest is plainly and unmistakably (1) seasonal and (2) a recreational or amusement establishment under the FLSA. FanFest meets the seasonality requirement. It is also a recreational or amusement establishment. It was certainly seasonal. In addition, as "FanFest was a 'sports event' and ... [was] a theme park,” it falls within the second exception also.

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