Skip to main content

Is Training Time Compensable Under the FLSA? Perhaps...


Harbourt v. PPE Casino Resorts Maryland, LLC - Fourth Circuit Court of Appeals


Facts:  PPE Casino Resorts Maryland, LLC ("PPE") owned and operated a casino in Maryland.  After the state legalized gambling starting April 11, 2013, PPE decided to offer a free twelve week training course (called a "dealer school") to approximately 830 dealers who would operate gambling tables at the casino.  Claudia Harbourt, Michael Lukoski, and Ursula Pocknett (the "Trainees") applied for a dealer position with PPE.  

After interviews, PPE offered the Trainees (among others) an opportunity to attend the dealer school.  The dealer school consisted of four hours of daily instruction (Monday through Friday) in four hour time periods.  Although the school was to run for twenty hours/week for twelve weeks, it consumed more time as a result of "numerous delays" caused by PPE staff.  The dealer school, completely run by PPE, had attendees complete employment forms, submit to a drug test, provide fingerprints and social security numbers, and engage in a PPE run training course.  

The Trainees attended the school between eight to twelve weeks each.  Although Harbourt and Pocknett were not paid, Lukoski and others were paid &7.25/hour for the final two days of the dealer school.  The Trainees filed a class action against PPE on the grounds of violations of the Fair Labor Standards Act ("FLSA") and Maryland state law.  The District Court dismissed the case on the grounds that no valid claim had been alleged upon which relief could be granted.  The District Court's ruling was subsequently appealed.

Holding:  The Fourth Circuit Court of Appeals pointed out that to proceed on a cause of action, a plaintiff must allege sufficient facts to establish the elements of the claim.  In this instance, the FLSA requires employers to pay employees the minimum hourly rate "for all hours worked".  (Of course, the FLSA does not define "work").  However, the Supreme Court has provided guidance that "work" can be interpreted as "physical or mental exertion controlled or required by the employer and pursued necessarily and primarly for the benefit of the employer and his business."  As well, it has previously been held that a trainee may be an "employee" for purposes of the FLSA, although the analysis often turns on whether the employer received an "immediate advantage" from the trainees' efforts during training.

PPE argued that the Trainees could not show that PPE received any benefit during the time the Trainees attended dealer school.  The Court acknowledged that the fact that table gambling games were not yet in operation during the training could prove to be an insurmountable obstacle to the Trainees recovering under the FLSA and therefore bar them from recovery.  However, as the Court pointed out, the Trainees were in the same position as all other persons training for positions in which they are not yet performing their work related duties.  Inexperienced persons required to train to be waiters in an about to be licensed, but not yet open, restaurant  would be in the same position as the Trainees in this case.  

Whether a cause of action under the FLSA was found to exist would depend primarily upon whether the training constituted a benefit to the employer or the trainee.  In this case, the Court found sufficient facts had been alleged to support the claim that PPE benefited from the training, rather than the Trainees.  As well, the fact that PPE paid all dealers in the dealer school the hourly minimum wage for the final two days of the school lent credence to the argument that PPE regarded the dealer school participants to be employees doing "work".

Judgment:  The Fourth Circuit Court of Appeals reversed and remanded the ruling from the District Court and held that the Trainees had alleged sufficient facts in their complaint to proceed on a claim that they were in fact doing "work" for PPE's benefit at the training school, and were therefore entitled to compensation under the FLSA and Maryland state law.

The Takeaway:  Ever heard the phrase "live to fight another day"?  I think that is appropriate here for the Trainees.  While the Fourth Circuit did not directly decide the matter of whether the Trainees were entitled to compensation for attending the dealer school, the Court did hold that sufficient facts had been alleged to allow the claim to proceed.  I think employers should review this case and consider how compensation (or lack thereof) of trainees are handled at their workplace.  The Court pointed to a couple of Supreme Court cases that could cut both ways in regard to whether trainees are entitled to compensation for time spent in training.  Review this one carefully...this certainly is not the last we have heard of this issue.

Majority Opinion Judge:  Judge Motz

Date:  April 25, 2016

Opinion:  https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&cad=rja&uact=8&ved=0ahUKEwiu1YLnnYfNAhWE7iYKHTS6BEMQFggqMAI&url=http%3A%2F%2Fhr.cch.com%2FELD%2FHarbourtPPE.pdf&usg=AFQjCNHbpHRAmZ8NGSJJebcVWkpAnFeCrQ&sig2=YsnJiE4F2JorWo-5ukR3hA&bvm=bv.123325700,d.eWE

Comments

Post a Comment

Popular posts from this blog

NLRB: Discussion Among Employees About Tip Pooling is Protected Concerted Activity

  This Advice Memorandum from the National Labor Relations Board’s Associate General Counsel, Jayme Sophir, addressed whether employees which discussed and complained about tip pooling at work constituted protected concerted activity. In relevant part, an employer in New York operated a chain of steakhouses.  While tip pooling was in place at these steakhouses, some of the employees objected to it on the grounds that it was not transparent and improperly divided tips among the workers.  Employees were told not to complain or talk to each other about the tip pool and were told that doing so would endanger their jobs.  Despite the employer later attempting to provide some clarity as to how the tips were being divided, rancor still existed among some employees.  At one point, the employees were told by a general manager that some employees that had been talking about the tip pool were “cleared out” and the employer would continue to do so. In the Advice Memorandum,...
Post a Comment
Read more

San Diego Rolls Back Vaccine Mandate For City Workers

Last Tuesday, the San Diego City Council voted to do away with the vaccine mandate for city employees. The city’s vaccine mandate that was in place required city workers to get the coronavirus vaccine or risk termination.  Perhaps to this surprise of no one, the city’s policy came under fire with 14 employees being terminated and over 100 other employees resigning.  With the coronavirus subsiding, including in Southern California, the San Diego City Council took action. Now, bear in mind, the repeal of the vaccine mandate does not take place immediately. With that being said, the mandate will be repealed March 8th.  I suppose the question now is, what other cities or regions follow San Diego’s lead? For additional information:   https://www.sandiegouniontribune.com/news/politics/story/2023-01-24/san-diego-repeals-controversial-covid-19-vaccine-mandate-citing-drop-in-cases-hospitalizations
Post a Comment
Read more

NLRB: Former Employee Cannot Be Barred From Work Premises After Filing Wage Suit

MEI-GSR Holdings, LLC - NLRB Facts :  MEI-GSR Holdings, LLC d/b/a Grand Sierra Resort & Casino ("GSR") operated a facility that included a hotel, casino, restaurant, clubs, bars, and a pool which were all open to the general public.  Tiffany Sargent ("Sargent") was briefly employed by GSR as a "beverage supervisor" in December of 2012.  After her employment ended, Sargent continued to socialize at one of the clubs.  GSR had a long standing practice of allowing former employees to patronize its facility and did not prohibit Sargent from doing so.  In June of 2013, Sargent and another employee filed a class and collective action against GSR for alleged unpaid wages, in violation of the Fair Labor Standards Act and Nevada law.  In July of 2014, GSR denied Sargent access to an event at one of the clubs.  GSR followed up with a letter and stated that with the on-going litigation (from the wage suit), it decided to bar Sargent from the premises. ...
1 comment
Read more