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Oct. 3 — A baseball stadium concessions operator in Maryland is exempt from paying overtime, a federal appeals court ruled ( Hill v. Del. N. Cos. Sportservice, Inc. , 2d Cir., No. 15-2109, 10/3/16 ).
Delaware North Companies Sportservice Inc., which sells food, beverages and merchandise inside Oriole Park at Camden Yards, is covered by a Fair Labor Standards Act exemption for businesses engaged in amusement or recreational activities on a seasonal basis, Judge Barrington D. Parker wrote Oct. 3 for the U.S. Court of Appeals for the Second Circuit. The company doesn’t directly provide amusement or recreation, but its primary purpose is selling goods and services to enhance spectators’ experience during Baltimore Orioles games.
Delaware North conducts business in Oriole Park through its subsidiary, Maryland Sportservice Inc., and has similar operations at a number of professional and college sports venues. The ruling could affect overtime eligibility for concessions workers at its other locations.
In a statement provided to Bloomberg BNA Oct. 3, Delaware North Assistant General Counsel Michael McCabe said the company is analyzing to what extent the ruling has implications beyond its Maryland Sportservice operations.
The decision is the first time the Second Circuit has fielded the question of what sort of operations qualify an establishment for the exemption, Parker said. The court discussed the FLSA exemption in an August 2015 ruling but didn’t go into the issue of exemption qualifications.
Judges Rosemary Pooler and Debra Ann Livingston joined the opinion.
William Hill and Tanica Brown filed a lawsuit saying the company didn’t pay overtime when they worked more than 40 hours in a week. A lower court dismissed their claims under the FLSA’s amusement or recreation exemption.
The Second Circuit’s ruling means that exemption from overtime still applies if an amusement or recreation facility contracts out some of its operations. Maryland Sportservice qualifies for the amusement or recreation exemption because it operates under a concession agreement with a business that qualifies for the exemption.
Although Maryland Sportservice operates entirely within a baseball stadium, it conducts some business on non-game days. For example, it rents out lounges for private functions and opens its retail store to customers.
The volume on those days is too small relative to a typical day’s volume to change the analysis, the court said. Maryland Sportservice’s operation exists because of its concession agreement with the Orioles, so the exemption does too.
An attorney for the workers didn’t immediately respond to requests for comment.
Edwin David Hoskins of Albany, N.Y., and Gary Lynch and Jamisen Etzel of Carlson Lynch Sweet & Kilpela LLP in Pittsburgh, represented the workers. Robert Pritchard and Brian Hentosz of Littler Mendelson P.C. in Pittsburgh, represented DNC Sportservice.
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Text of the opinion is available at http://www.bloomberglaw.com/public/document/Hill_v_Delaware_North_Companies_Sport_Docket_No_1502109_2d_Cir_Ju.
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