Thursday, June 5, 2014

Alexander_Charlotte_0514_01Sports, both amateur and professional, have recently offered up a variety of interesting work law questions, including the NLRB’s March 2014 ruling  that Northwestern University football players are “employees” for NLRA purposes. 

On the pro side, two groups of Oakland Raiders cheerleaders have filed wage and hour lawsuits in the past several months alleging unpaid minimum wages and overtime as well as what appear to be very hostile working conditions, including being “forced to change into uniform in public places, [and being] groped by inebriated men.” 

The cheerleaders’ suits follow on the heels of similar FLSA suits by cheerleaders for the Buffalo Bills,  Cincinnati Bengals , New York Jets, and Tampa Bay Buccaneers.  Minor league baseball players have also sued for unpaid minimum wages and overtime as have baseball fan convention workers,  baseball batboys , basketball ticket sales, and fan relations workers, and baseball stadium maintenance workers,  and groundskeepers.

In all of these suits, the sports franchises have defended themselves using a relatively obscure FLSA exemption, Section 213(a)(3), which relieves any seasonal “recreational or amusement . . . establishment” of the obligation to pay the minimum wage or overtime.  The defense applies to “amusement or recreational” businesses that either (a) operate for no more than seven months in any calendar year, or (b) have low and high seasons, as measured by differences in their receipts. 

While sports franchises clearly provide amusement or recreational services, courts have been divided over whether they can satisfy either of the two “seasonality” conditions.  Most teams cannot demonstrate high and low seasons, as they receive significant off-season revenues from season ticket deposits, television broadcast agreements, and sponsorship deals.  

This leaves the seven-month operation requirement.  The Sixth Circuit  has held that sports franchises effectively operate year-round, taking them outside the exemption.  However, the Eleventh Circuit denied unpaid overtime to a stadium groundskeeper because the minor league baseball season ran for only five months.  The court’sfocus was on the duration of the team's amusement and recreational-related operations themselves, not the fact that some of its employees, including the plaintiff, worked year-round.  This makes for confusing precedent: Is FLSA coverage dictated, for example, by whether a team makes the playoffs in a given year, thereby extending its season beyond the seven-month mark?

It will be interesting to watch the development of these issues as the Raiders cheerleaders’ and other lawsuits make their way through the courts.  In March, the San Francisco office of the Department of Labor completed its own investigation of the cheerleaders’ claims, concluding that the Raiders fall within the 213(a)(3) exemption.  Whether or not this decision is right on the law, from a policy perspective, it seems less than sporting for massively profitable pro teams, which often use the promise of job creation to extract stadium and other subsidies from municipalities to skimp on the pay of front-line workers such as maintenance staff, ticket salespeople, batboys, and cheerleaders.  

For more on the Section 213(a)(3) exemption, my collaborator Nathaniel Grow has a related post  on the Sports Law Blog

Charlotte Alexander

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