DocketNumber: Appeal No. 2017AP608
Citation Numbers: 921 N.W.2d 518, 2018 WI App 66, 384 Wis. 2d 413
Filed Date: 9/26/2018
Status: Precedential
Modified Date: 10/16/2022
¶1 Green Bay Sportservice, Inc. (GBS) seeks a statutory exemption from paying its hourly employees overtime on the ground that it qualifies as a recreational or amusement establishment. As GBS failed to prove that it satisfies the definition of a "recreational or amusement establishment" under WIS. ADMIN. CODE § DWD 274.04(8) (Apr. 2018), we affirm the denial of the exemption.
Background
¶2 GBS holds the exclusive contract to provide food and beverage concession services at Lambeau Field, home of the Green Bay Packers football team. Within Lambeau Field is Curly's Pub, a bar and restaurant that is open year-round to the public and is part of GBS's contract. Two employees of GBS filed a complaint alleging that GBS failed to pay them overtime in violation of WIS. STAT. § 103.02 (2015-16).
Any employee employed by an establishment which is an amusement or recreational establishment , [is exempt from the overtime pay requirements] if a) it does not operate for more than 7 months in any calendar year, or b) if during the preceding calendar year, its average receipts for any 6 months of such year were not more than 33 1/3% of its average receipts for the other 6 months of such year.
(Emphasis added.)
¶3 The Department of Workforce Development (DWD) denied GBS an exemption on the ground of the "single establishment" rule as "concessions themselves are not an amusement or recreational establishment, and [GBS] cannot be considered a single establishment with the host establishment, Lambeau Field." On administrative review, the circuit court agreed with the denial of the exemption, but it did so under the analysis set forth in Hill v. Delaware N. Cos. Sportservice, Inc. ,
Standard of Review
¶4 We review requests for exemptions from overtime laws in light of and consistent with the Federal Fair Labor Standards Act (FLSA) and the Code of Federal Regulations. WISCONSIN ADMIN. CODE § DWD 274.04(8)
¶5 Exemptions under the FLSA "are to be narrowly construed against the employers seeking to assert them and their application limited to those establishments plainly and unmistakably within their terms and spirit." Arnold v. Ben Kanowsky, Inc. ,
¶6 Whether GBS qualifies for the exemption is a mixed question of fact and law. See Michels Pipeline Constr., Inc. v. LIRC ,
Analysis
¶7 The federal law is in flux. Some jurisdictions apply the "single establishment" test set forth by the Department of Labor (DOL) in several opinion letters. Whereas others, such as the court in Hill , found an exception to the "single establishment" test for "concessionaires."
A. Establishment Prong
¶8 The establishment prong of WIS. ADMIN. CODE § DWD 274.04(8) requires that for an employer to be exempt from overtime pay requirements it must be an "amusement or recreational establishment."
¶9 Similarly, a DOL opinion letter dated June 8, 1979, discussed a fast food business at a professional baseball park, noting that a food concessionaire at such an establishment would be exempt "provided the operations of the concessionaire and host establishment constitute a single establishment which meets the requirement for the exemption." Finally, a January 15, 2009 opinion letter addressed a concessionaire "hold[ing] an exclusive contract with the owner of a recreational establishment to provide various catering services to the general public and to private parties who use the facility." Again, the DOL postulated that "[r]estaurants are not generally recognized as amusement or recreational in character. Employees of a restaurant operating on the premises of an amusement or recreational establishment ... may come within the [statutory] exemption provided the operations of the restaurant and host establishment constitute a single establishment." DWD explained that "[GBS] and Lambeau Field are not a 'single establishment.' [GBS] is a separate legal entity with separate records and bookkeeping, and there is no interchange of employees between [GBS] and Lambeau Field." GBS does not claim that it is a "single establishment" with Lambeau Field, and we see no evidence in the record to suggest an alternative determination. Applying the "single establishment" test, we conclude that GBS fails the establishment prong as it is not an amusement or recreational establishment.
¶10 Hill , in contrast, distanced itself from the "single establishment" test, concluding that there is a narrow category of employers who qualify as "concessionaires" under
¶11 Hill explained, however, that there are limitations to the "concessionaire" definition, specifically addressing how the operations of Maryland Sportservice outside of game days would impact the exemption as those "are not activities of a concessionaire as defined above because these activities are not associated with a particular baseball game."
¶12 If we accepted Hill 's interpretation of the amusement or recreational establishment exception under
¶13 If we applied Hill to GBS, we would conclude that GBS failed to establish that it is a concessionaire entitled to the statutory exemption. There is no dispute that Lambeau Field, the host facility, has an amusement or recreational character as it hosts football games and no dispute that GBS "sells goods or services to the host's customer's for their consumption or use during the host's amusement or recreational activities," i.e., at football games. See Hill ,
¶14 As the circuit court explained, there is no information "as to the number of employees employed on game days compared to non-game days, or even the number of game days in a calendar year." We acknowledge that the administrative record includes a table, buried in a letter from GBS's counsel, professing to establish "the average receipts received by GBS in the highest-earning six months of 2013 compared to the lowest earning six months." The table, however, is not supported by evidence in the record. See Liger v. New Orleans Hornets NBA Ltd. P'ship ,
¶15 GBS claims that it was unable to provide relevant figures for the twelve months preceding the work periods at issue because it was a "new business." GBS's "new business" excuse is unavailing as it has the burden of proof to show entitlement to the exemption. GBS also argues that DWD "accepted as undisputed fact"
B. Seasonality Prong
¶16 If we follow the jurisdictions that employ the "single establishment" test, there is no dispute that GBS and Lambeau Field are not a "single establishment." For completeness, we will briefly address the seasonality prong. The seasonality prong of WIS. ADMIN. CODE § DWD 274.04(8) provides that the employer must not "operate for more than 7 months in any calendar year" (Test A) or "its average receipts for any 6 months of [the preceding calendar year] [must not be] more than 33 1/3% of its average receipts for the other 6 months of such year" (Test B). GBS failed to establish that it satisfied either Test A or Test B.
¶17 Although GBS argued that it satisfied Test A before DWD and the circuit court, GBS appears to have abandoned that argument on appeal. Reiman Assocs., Inc. v. R/A Advert., Inc. ,
¶18 As to Test B (receipts), we previously noted that the only information in the record concerning GBS's receipts is a table included in a letter from GBS's counsel purporting to show that GBS's revenue in its lowest-earning six months of 2013 is 14.16% of its highest-earning six months. GBS failed to provide evidence supporting those figures or as to how the figures relate to game day versus non-game day revenues. GBS failed to meet its burden of proof that it was entitled to the exemption.
Conclusion
¶19 As GBS did not demonstrate that it satisfied either the establishment or seasonality prongs set forth in Hill or the "single establishment" test employed by other jurisdictions, it does not qualify for the exemption for amusement or recreational establishments under WIS. ADMIN. CODE § DWD 274.04(8).
By the Court. -Order affirmed.
This opinion will not be published. See WIS. STAT. RULE 809.23(1)(b)5.
All references to the Wisconsin Statutes are to the 2015-16 version unless otherwise noted.
The decision in Hill was released after DWD made its final determination.
Wisconsin Admin. Code § DWD 274.04(8) finds its federal equivalent in the FLSA exemption
[A]ny employee employed by an establishment which is an amusement or recreational establishment, organized camp, or religious or non-profit educational conference center, if (A) it does not operate for 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 federal case law also suggests that some enterprises that sell goods in conjunction with an amusement or recreation activity qualified for the exemption, such as pro shops at golf courses or dry good stores in national parks. See Brennan v. Texas City Dike & Marina, Inc. ,
The term "establishment" is not defined in the statutes. The United States Supreme Court has defined "establishment" as "a distinct physical place of business" "as it is normally used in business and in government." A.H. Phillips, Inc. v. Walling ,
GBS claims that "[a]ccording to the DWD, there simply was 'no factual dispute' involving any of these facts." We disagree that DWD's reference to "no factual dispute" was in reference to GBS's receipts. DWD decided this case on the narrow issue that GBS and Lambeau Field were not a "single establishment." As to that question and that question alone, there were no facts in dispute.
GBS argues that under