Circuit extends "amusement or recreational establishment" overtime exception to stadium concessionaires

The Fair Labor Standards Act entitles you to overtime pay if you work more than 40 hours. But the FLSA recognizes a slew of exceptions. One of them exempts employers from the overtime rules if they operate an "amusement or recreational establishment." This case says the exception applies to a company that contracts with a baseball stadium to sell concessions, souvenirs and the other overpriced crap they sell during the game, the very crap that costs $40.00 at the stadium but only $14.99 at the mall. Since the company is exempt, the employees are denied overtime.

The case is Hill v. Delaware North Companies Sportservice, Inc., decided on October 3. The concessions are mostly sold during Baltimore Orioles baseball games at Camden Yards in Baltimore, where up until a few years ago you could watch utility infielders pound 50 home runs a season because they were juiced on steroids. The baseball season only lasts six months or so. So the "amusement and recreational establishment" exception is an obvious candidate for the overtime exception. But he FLSA does not define that phrase, so the Court of Appeals (Parker, Pooler and Livingston) reviews legislative history and Department of Labor guidance to resolve this case.

In 1961, a Congressional report said concessionaires at places of amusement or recreation had the amusement or recreational character required for the exception. After consulting the dictionary, the Second Circuit says "we are comfortable in concluding that the essence of serving as a concessionaire is having a contractual arrangement with a host to operate on the host's premises to sell gods to the host's customer for them to use or consume, also on the host's premises, during the host's amusement or recreational activities." So you know where this case is going.

The Court holds that since Maryland Sportservice operates entirely within the stadium and caters to ticketholders by selling them merchandise during baseball games, the company possesses the characteristics of a concessionaire under the FLSA. While the company also sells stuff to people on non-game days, most of its sales are done on game days, when it utilizes most of its employees.