Chen v. Major League Baseball Properties, Inc., et al
Filing
43
OPINION AND ORDER 104116 granting 35 MOTION to Dismiss Notice of Defendants' Renewed 12(b)(6) Motion to Dismiss Plaintiff's First Amended Complaint. MOTION to Dismiss Notice of Defendants'Renewed 12(b)(6) Motion to Dismiss Plaintiff's First Amended Complaint filed by Major League Baseball, Major League Baseball Properties, Inc., Major League Baseball Enterprises, Inc., The Office of the Commissioner of Baseball, denying 2 MOTION to Certify Class Notice of Motion for Court-Authorized Notice filed by John Chen. The Court has considered all of the arguments of the parties. To the extent not specifically addressed above, the remaining arguments are either moot or without merit. For the foregoing reasons, the defendants' motion to dismiss the FLSA claims is granted. The plaintiffs New York state-law claims are dismissed without prejudice. The plaintiffs motion for collective certification and court-authorized notice is denied as moot. The Clerk is directed to close Docket Nos. 2 and 35, to enter judgment, and to close this case. SO ORDERED. (Signed by Judge John G. Koeltl on 3/25/2014) (ft) Modified on 3/28/2014 (nt).
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
───────────────────────────────────
JOHN CHEN,
Plaintiff,
13 Civ. 5494 (JGK)
- against -
OPINION AND ORDER
MAJOR LEAGUE BASEBALL, ET AL.,
Defendants.
───────────────────────────────────
JOHN G. KOELTL, District Judge:
Plaintiff John Chen brought suit against Defendants Major
League Baseball Properties, Inc. and the Office of the
Commissioner of Baseball (collectively, “defendants” or “MLB”)
under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201 et
seq., and the New York Labor Law (“NYLL”), §§ 190 et seq. & 650
et seq., claiming violations of his right to receive a minimum
wage.
The plaintiff alleges that he worked for MLB as an unpaid
volunteer during the week of the July 2013 Baseball All Star
Game at an installation for fans at the Javits Center in New
York City, and that he is entitled to minimum wage compensation
for this work.
The plaintiff has moved this Court to grant
conditional certification of, and provide court-authorized
notice to, a proposed class of similarly situated plaintiffs
pursuant to Section 16(b) of the FLSA, 29 U.S.C. § 216(b).
before the Court is the defendants’ motion to dismiss the
1
Also
plaintiff’s First Amended Class Action Complaint pursuant to
Rule 12(b)(6) of the Federal Rules of Civil Procedure for
failure to state a claim upon which relief can be granted.
For
the reasons explained below, the defendants’ motion to dismiss
is granted and the plaintiff’s motion for collective
certification and court-authorized notice is denied as moot.
I.
In deciding a motion to dismiss pursuant to Rule 12(b)(6),
the allegations in the complaint are accepted as true, and all
reasonable inferences must be drawn in the plaintiff’s favor.
McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 191 (2d Cir.
2007).
The Court’s function on a motion to dismiss is “not to
weigh the evidence that might be presented at a trial but merely
to determine whether the complaint itself is legally
sufficient.”
1985).
Goldman v. Belden, 754 F.2d 1059, 1067 (2d Cir.
The Court should not dismiss the complaint if the
plaintiff has stated “enough facts to state a claim to relief
that is plausible on its face.”
U.S. 544, 570 (2007).
Bell Atl. Corp. v. Twombly, 550
“A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to draw
the reasonable inference that the defendant is liable for the
misconduct alleged.”
Ashcroft v. Iqbal, 556 U.S. 662, 678
2
(2009).
While the Court should construe the factual allegations
in the light most favorable to the plaintiff, “the tenet that a
court must accept as true all of the allegations contained in
the complaint is inapplicable to legal conclusions.”
Id.
When presented with a motion to dismiss pursuant to Rule
12(b)(6), the Court may consider documents that are referenced
in the complaint, documents that the plaintiff relied on in
bringing suit and that are either in the plaintiff’s possession
or that the plaintiff knew of when bringing suit, or matters of
which judicial notice may be taken.
See Chambers v. Time
Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002); see also
Winfield v. Citibank, N.A., 842 F. Supp. 2d 560, 564 (S.D.N.Y.
2012).
II.
The following allegations are accepted as true for the
purposes of these motions.
The July 2013 Baseball All Star Game
took place at Citi Field in New York City.
¶ 25.)
(See Am. Compl.
In connection with the All Star Game, MLB put on a
series of “All Star Week festivities” throughout New York City,
including a race, a concert, a fantasy camp, a parade, and an
event called “FanFest.”
(Am. Compl. ¶¶ 1-3.)
FanFest took
place at the Javits Center in New York City during the week of
3
the 2013 All Star Game, from July 12 to July 16, 2013.
(Am.
Compl. ¶¶ 18, 141; Decl. of Elise M. Bloom (“Bloom Decl.”), Ex.
C1 at 1.)
The event was described by MLB as “the largest
interactive baseball theme park in the world.”
¶ 2.)
(Am. Compl.
Activities at FanFest included baseball video games, a
simulated baseball dugout, baseball clinics, batting cages,
music events, and autograph opportunities.
(Am. Compl. ¶ 123.)
All of the 2013 All Star Week festivities in New York City
were staffed generally with volunteers.
(Am. Compl. ¶¶ 1-4.)
These individuals were not paid any cash wages for their work,
but instead received “in-kind benefits,” such as t-shirts, caps,
drawstring backpacks, water bottles, baseballs, lanyards, free
admission to FanFest for each volunteer and a guest, and a
chance to win a ticket to the All Star Game.
31, 158.)
(Am. Compl. ¶¶ 6,
Admission to FanFest in 2013 was worth approximately
$35, and the other in-kind compensation received by the
volunteers was worth at least $40.
1
(Am. Compl. ¶¶ 103-04.)
In
Counsel for the defendants has affirmed in a sworn declaration
that this exhibit depicts the webpage available at
http://mlb.mlb.com/mlb/downloads/y2013/fanfest_map.pdf, (see
Bloom Decl. ¶ 4), which the plaintiff has explicitly relied upon
in his Complaint, (see Am. Compl. ¶ 27), and which may therefore
properly be taken into consideration in deciding this motion to
dismiss. See Chambers, 282 F.3d at 152-53.
4
2013, approximately two thousand volunteers staffed the various
All Star Week festivities in New York City.
(Am. Compl. ¶ 4.)
The plaintiff is an adult residing in New York who worked
three shifts, totaling approximately seventeen hours, at FanFest
during the 2013 All Star Week.
(Am. Compl. ¶¶ 49-50, 157, 162.)
Prior to his shifts, the plaintiff attended a mandatory one-hour
information session at Citi Field on June 1, 2013 and a
mandatory two-hour orientation session at the Javits Center on
July 10, 2013.
(Am. Compl. ¶¶ 159-160.)
During his first
shift, on July 12, 2013, the plaintiff stamped the wrists of
FanFest attendees after they had signed liability waivers.
Compl. ¶¶ 163, 165.)
(Am.
At his second shift on the following day,
the plaintiff handed out bags of paraphernalia to attendees at
the entrance, placed paper flyers in bags, and redirected
attendees who attempted to exit the event through the entrance.
(Am. Compl. ¶¶ 166-69.)
During his third shift, on July 16,
2013, the plaintiff alphabetized liability waivers and worked at
a “fielding station” instructing attendees to deposit the balls
they fielded into buckets before moving to the next station.
(Am. Compl. ¶¶ 170-73.)
The plaintiff received no cash wages
for this work, but did receive in-kind benefits such as a tshirt, a cap, a drawstring backpack, a water bottle, and a
baseball.
(Am. Compl. ¶ 158.)
5
On August 7, 2013, the plaintiff filed this lawsuit.
On
August 15, 2013, the plaintiff filed the present motion for
collective certification and court-authorized notice,
requesting, among other things, that a proposed collective
consisting of himself and similarly situated individuals who
worked as volunteers at various All Star Week events since
August 7, 2010 be conditionally certified, and that putative
plaintiffs receive court-authorized notice of their right to
join the lawsuit.
After the defendants file a motion to
dismiss, the plaintiff filed the First Amended Class Action
Complaint on November 25, 2013, and the initial motion to
dismiss was denied without prejudice.
In the First Amended Class Action Complaint, the plaintiff
alleges that the defendants failed to pay him the minimum wages
required by the FLSA and the NYLL for his work at FanFest.
Am. Compl. ¶¶ 156-85, 188-96.)
(See
The plaintiff also alleges that
the defendants failed to comply with the recordkeeping
requirements of the FLSA and the NYLL.
87, 197-203.)
(See Am. Compl. ¶¶ 186-
The defendants have now moved to dismiss the
First Amended Class Action Complaint (hereinafter “Complaint”).
6
III.
The defendants proffer two bases upon which the plaintiff’s
claims should be dismissed.
First, the defendants argue that
the plaintiff is not an “employee” as that term is defined in
the FLSA because he worked for the defendants only as a
volunteer, and he is therefore not entitled to minimum wages.
See 29 U.S.C. §§ 203(e)(1) (defining “employee”) & 206(a)
(requiring that “employees” receive a minimum wage).
Second,
the defendants argue that even if the plaintiff is an
“employee,” he is still not entitled to minimum wages because he
worked for an “amusement or recreational establishment” that is
exempt from the FLSA’s minimum wage requirement under Section
13(a)(3) of the FLSA, 29 U.S.C. § 213(a)(3).
As explained
below, the plaintiff’s claims under the FLSA must be dismissed
because the “amusement or recreational establishment” exemption
in Section 13(a)(3) applies in this case.
Accordingly, there is
no occasion to reach the question of whether the plaintiff is
properly classified as an “employee” under the FLSA.2
2
Both parties agree that dismissal of the FLSA minimum wage
claim would require the Court to dismiss the FLSA recordkeeping
claim. (See Oral Arg. Tr. at 3-4.) They also agree that the
applicability of the Section 13(a)(3) exemption has no effect on
the NYLL claims. Accordingly, the NYLL claims are addressed in
Subsection III.C, below.
7
A.
Congress enacted the FLSA in order to eliminate “labor
conditions detrimental to the maintenance of the minimum
standard of living necessary for health, efficiency, and general
well-being of workers.”
Id. § 202(a).
To that end, Section 6
of the FLSA states that “[e]very employer shall pay to each of
his employees who in any workweek is engaged in commerce or in
the production of goods for commerce, or is employed in an
enterprise engaged in commerce or in the production of goods for
commerce, [certain minimum wages].”
Id. § 206(a).
The Second
Circuit Court of Appeals has emphasized that the FLSA “is a
remedial [statute], written in the broadest possible terms so
that the minimum wage provisions would have the widest possible
impact in the national economy.”
Carter v. Dutchess Cmty.
Coll., 735 F.2d 8, 12 (2d Cir. 1984).
Nevertheless, Section 13 of the FLSA contains a litany of
exemptions to the minimum wage requirement.
§ 213.
See 29 U.S.C.
These exemptions are affirmative defenses, for which
employers have the burden of proof.
Corning Glass Works v.
Brennan, 417 U.S. 188, 196-97 (1974); Bilyou v. Dutchess Beer
Distribs., Inc., 300 F.3d 217, 222 (2d Cir. 2002).
The
exemptions must be “narrowly construed against the employers
seeking to assert them and their application limited to those
8
establishments plainly and unmistakably within their terms and
spirit.”
Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392
(1960).
At the motion-to-dismiss stage, an FLSA claim may be
dismissed on the basis of an exemption only if the exemption
“appears on the face of the complaint.”
Pani v. Empire Blue
Cross Blue Shield, 152 F.3d 67, 74 (2d Cir. 1998); see also Hill
v. Del. N. Cos. Sportservice, Inc., No. 11 Civ. 753S, 2012 WL
2405233, at *2 (W.D.N.Y. June 25, 2012) (noting that the Section
13 exemptions are affirmative defenses that permit dismissal
under Rule 12(b)(6) only where they “appear[] on the face of the
complaint”); Beaulieu v. Vermont, No. 10 Civ. 032, 2010 WL
3632460, at *6 (D. Vt. Aug. 5, 2010) (“Where the Complaint
contains allegations that unequivocally qualify an employee as
exempt from the overtime provisions, a 12(b)(6) motion will be
granted.”).
The defendants argue that they cannot be liable to the
plaintiff for minimum wages because it is clear from the face of
the Complaint that the “amusement or recreational establishment”
exemption in Section 13(a) applies in this case.
Section 13(a)
provides in relevant part that the minimum wage provisions of
“section 206 . . . shall not apply with respect to . . . any
employee employed by an establishment which is an amusement or
9
recreational establishment . . . if . . . it does not operate
for more than seven months in any calendar year . . . .”
U.S.C. § 213(a)(3).
29
According to the defendants, this exemption
applies because the plaintiff was employed by FanFest, which the
pleadings show to have been an “amusement or recreational
establishment” that operated for fewer than eight months during
2013.
The plaintiff counters that the “amusement or
recreational establishment” exemption does not apply in this
case because he was employed not by FanFest, but by MLB, which
operated for more than eight months in 2013.
The plaintiff also
argues that it would be inappropriate to dismiss his FLSA claims
under Rule 12(b)(6) on the basis of a Section 13 exemption
because he is not required to plead the absence of an
affirmative defense, and he has not yet had the opportunity for
discovery.
1.
There is no dispute between the parties that baseball
constitutes “amusement or recreation[]” for purposes of the
exemption.
Rather, the disagreement between the parties as to
the applicability of the Section 13(a)(3) exemption centers upon
the meaning of the term “establishment” in the phrase “amusement
or recreational establishment.”
29 U.S.C. § 213(a)(3).
10
The
FLSA does not explicitly define this term, and courts have
generally concluded that the language of the Section 13(a)(3)
exemption is ambiguous.
See, e.g., Chao v. Double JJ Resort
Ranch, 375 F.3d 393, 396-97 (6th Cir. 2004); Ivanov v. Sunset
Pools Mgmt. Inc., 567 F. Supp. 2d 189, 192 (D.D.C. 2008).
The legislative history is sparse.
Courts have noted that
a House Committee Report on a proposed 1965 amendment to the
FLSA stated that the “amusement or recreational establishment”
exemption was meant to cover “such seasonal recreational or
amusement activities as amusement parks, carnivals, circuses,
sport events, parimutel racing, sport boating or fishing, or
other similar or related activities.”3
Brock v. Louvers and
Dampers, Inc., 817 F.2d 1255, 1258 (6th Cir. 1987) (quoting H.R.
Rep. No. 89-871 (1965)).
During floor debates on the amendment
that eventually became the Section 13(a)(3) exemption, Senator
Yarborough stated that he believed the exemption was meant to
3
The proposed amendment to which the statement in this report
pertains was not enacted in 1965, but the language is
nevertheless relevant because Congress enacted the amendment the
following year. See Brennan v. Texas City Dike & Marina, Inc.,
492 F.2d 1115, 1118 n.8 (5th Cir. 1974). Indeed, during floor
debates on the 1966 amendment, Representative Dent was asked
whether the amendment under consideration “retain[ed] the
existing exemption for amusement or recreational establishments,
such as amusement parks, sports events, parimutuel racing, sport
boating or fishing and similar activities,” and he answered in
the affirmative. 112 Cong. Rec. 11,293 (1966).
11
cover only amusement parks.
112 Cong. Rec. 20,594, 20,791
(1966); see also Texas City Dike & Marina, 492 F.2d at 1118.
The purpose of the exemption is not immediately clear from its
text or its legislative history, but the exemption is generally
thought to have been “provided in the [FLSA] so as to allow
recreational facilities to employ young people on a seasonal
basis and not have to pay the relatively high minimum wages
required by the [FLSA].”
Brennan v. Yellowstone Park Lines,
Inc., 478 F.2d 285, 288 (10th Cir. 1973); see also Louvers, 817
F.2d at 1259 (“The logical purpose of the provision is to
exempt . . . amusement and recreational enterprises . . . which
by their nature, have very sharp peak and slack seasons. . . .
Their particular character may require longer hours in a shorter
season, their economic status may make higher wages impractical,
or they may offer non-monetary rewards.”).
Department of Labor (“DOL”) regulations define
“establishment” for the purposes of several provisions in the
FLSA, including Section 13(a)(3), as “a ‘distinct physical place
of business,’” as opposed to “‘an entire business or enterprise’
which may include several separate places of business.”
29
C.F.R. § 779.23; see also id. § 779.203 (“The term establishment
means a distinct physical place of business rather than an
entire business or enterprise.”).
12
Elsewhere the regulations
provide that “[t]ypical examples of [amusement or recreational
establishments] are the concessionaires at amusement parks and
beaches.”
Id. § 779.385.
The Complaint alleges that FanFest was “a lucrative, forprofit commercial operation that MLB promoted as the largest
interactive baseball theme park in the world, and described as
baseball heaven on earth.”
marks omitted).)
(Am. Compl. ¶ 2 (internal quotation
Moreover, FanFest is alleged to have taken
place at the Javits Center in New York City from July 12 to July
16, 2013.
at 1.)
(Am. Compl. ¶¶ 18, 141; see also Bloom Decl., Ex. C
Taken in light of the statutory language, the
legislative history, and the relevant administrative
interpretations, these allegations establish that FanFest was an
“amusement or recreational establishment” for purposes of the
Section 13(a)(3) exemption.
First, it is not disputed that FanFest was a “sports
event[],” which is among the core categories enumerated in the
legislative history and widely recognized as covered by the
exemption.
See Jeffery v. Sarasota White Sox, Inc., 64 F.3d
590, 595 (11th Cir. 1995) (adopting the opinion of the District
Court); Louvers, 817 F.2d at 1258; Texas City Dike & Marina, 492
F.2d at 1118; Ivanov, 567 F. Supp. 2d at 192; Alvarez Perez v.
Sanford-Orlando Kennel Club, Inc., 469 F. Supp. 2d 1086, 1089
13
(M.D. Fla. 2006); Bridewell v. Cincinnati Reds, No. C-1-93-203,
1994 WL 854075, at *3 (S.D. Ohio Feb. 14, 1994) (opinion of the
Magistrate Judge), adopted with modifications by Bridewell v.
Cincinnati Reds, No. C-1-93-203, 1994 WL 866091, at *1 (S.D.
Ohio Mar. 24, 1994), rev’d on other grounds, 68 F.3d 136 (6th
Cir. 1995).
Indeed, FanFest is alleged not only to have been a
sports event, but also a “theme park,” (Am. Compl. ¶ 2), which
is an independent reason to conclude that it falls squarely
within the coverage of the exemption.
See, e.g., Louvers, 817
F.2d at 1258 (listing “amusement parks” as the first example of
an “amusement or recreational establishment” in the legislative
history); 29 C.F.R. § 779.385 (listing “amusement parks” as an
example of “amusement or recreational establishments” under the
statute).
Moreover, FanFest is alleged to have taken place at a
discrete location (the Javits Center) over a discrete period in
time (All Star Week).
Ex. C at 1.)
(Am. Compl. ¶¶ 18, 62, 141; Bloom Decl.,
This makes it a “distinct physical place of
business,” which places it squarely within the administrative
definition of an “establishment” for Section 13(a)(3) purposes.
See 29 C.F.R. §§ 779.23, 779.203, 779.385.
The plaintiff alleges that FanFest lasted for fewer than
five days.
(Am. Compl. ¶¶ 18, 62.)
Thus, by the plaintiff’s
own allegations, he was employed at an “amusement or
14
recreational establishment” which “d[id] not operate for more
than seven months in any calendar year.”
29 U.S.C. § 213(a)(3).
The Complaint therefore contains facts establishing the
defendants’ affirmative defense.
2.
The plaintiff argues that the foregoing analysis proceeds
at the wrong level of generality.
He asserts that he was
employed not by FanFest but by MLB, which is not an amusement or
recreational establishment that operates for fewer than eight
months in a calendar year.
Thus, according to the plaintiff,
the Section 13(a)(3) exemption does not apply.
This argument is contradicted by the clear import of the
relevant DOL regulations, the validity of which has not been
challenged, and which, in any event, are persuasive and
therefore entitled to deference.4
4
The regulations draw a
The regulations relevant to the “amusement or recreational
establishment” exemption were not promulgated pursuant to an
express delegation of rulemaking authority by congress, see 29
U.S.C. § 13(a)(3); cf. English v. Ecolab, Inc., No. 06 Civ.
5672, 2008 WL 878456, at *6 (S.D.N.Y. Mar. 31, 2008); noticeand-comment procedures were not used, see 35 Fed. Reg. 5856,
5856 (Apr. 9, 1970); and the agency in promulgating them
described them as “interpretive rules.” Id. Accordingly, under
the Supreme Court’s guidelines in Long Island Care at Home, Ltd.
v. Coke, 551 U.S. 158, 172-74 (2007), they are most properly
considered “interpretive rules,” and therefore subject to
15
repeated distinction between “establishments,” on the one hand,
and “enterprises,” on the other.
An “establishment” is defined
as a “distinct physical place of business.”
29 C.F.R. § 779.23.
By contrast, an “enterprise . . . may include several separate
places of business.”5
Id. (internal quotation marks omitted).
“[An] enterprise may consist of a single establishment which may
be operated by one or more employers; or it may be composed of a
number of establishments which may be operated by one or more
employers.”
Id. § 779.203 (internal citations omitted).
Thus,
in the case of a “multiunit” business, “one company conducts its
Skidmore deference—meaning that the weight accorded to them
depends upon “the thoroughness evident in [their] consideration,
the validity of [their] reasoning, [their] consistency with
earlier and later pronouncements, and all those factors which
give [them] power to persuade . . . .” Skidmore v. Swift & Co.,
323 U.S. 134, 140 (1944). As demonstrated in the analysis that
follows, the regulations relevant to the “amusement or
recreational establishment” exemption are well-reasoned,
internally consistent, and generally consistent with judicial
interpretations of the exemption; they are therefore
particularly instructive in this case.
5
This interpretation draws support from the legislative history
of a related exemption in Section 13 for a “retail or service
establishment” (since repealed). During Senate floor debates on
the “retail or service establishment” exemption, Senator George,
who had sponsored the amendment, stated, “I wish to say that the
word ‘establishment’ has been very well defined in the Wage and
Hour Act. It means now a single physically separate place of
business . . . and it does not mean an entire business
enterprise.” Mitchell v. Birkett, 286 F.2d 474, 477 (8th Cir.
1961) (emphasis added) (quoting 95 Cong. Rec. 12,579 (1949)).
16
single business in a number of establishments.”
Id. § 779.204.
The regulations provide an example:
[A] manufacturer may operate a plant for production of its
goods, a separate warehouse for storage and distribution,
and several stores from which its products are sold. Each
such physically separate place of business is a separate
establishment. In the case of chain store systems, branch
stores, groups of independent stores organized to carry on
business in a manner similar to chain store systems, and
retail outlets operated by manufacturing or distributing
concerns, each separate place of business ordinarily is a
separate establishment.
Id. § 779.303.
Here, the plaintiff alleges that MLB is “a single
integrated enterprise” with its corporate offices at 245 Park
Avenue in Manhattan, and that FanFest was a roughly week-long
event that took place at the Javits Center.
62, 74, 141; Bloom Decl., Ex. C at 1.)
(Am. Compl. ¶¶ 18,
Taken as true, these
allegations indicate that FanFest was the establishment that
employed the plaintiff for the purposes of Section 13(a)(3).
It
is of no consequence that MLB “coordinated and controlled” the
events of All Star Week from its corporate office, (Am. Compl.
¶ 145), because physical distinctness, rather than operation or
control, is what distinguishes an “enterprise” from an
“establishment” to which it may belong.
See 29 C.F.R.
§ 779.203; see also Chessin v. Keystone Resort Mgmt., Inc., 184
F.3d 1188, 1192 (10th Cir. 1999) (“In focusing on administrative
and economic integration, Plaintiffs misconstrue the meaning of
17
‘establishment’ under the FLSA. . . .
Congress used the word
‘establishment’ to mean a distinct physical place of business
rather than an integrated business enterprise.” (citations and
internal quotation marks omitted)); Yellowstone Park Lines, 478
F.2d at 289 (“‘[E]stablishment’ . . . mean[s] . . . a single
physically separate place of business.”).6
It is also of no consequence that the plaintiff was
employed by MLB rather than by FanFest; for the purposes of
Section 13(a)(3), an individual is employed by the establishment
at which he works, regardless of any enterprise that may operate
or control the establishment.
See 29 U.S.C. § 213(a)(3)
(exempting “any employee employed by an establishment which is
an amusement or recreational establishment” (emphasis added));
29 C.F.R. §§ 779.23, 779.203, 779.303 (distinguishing
6
Courts have reached the same conclusion in construing the word
“establishment” in the former “retail or service establishment”
exemption previously contained in Section 13(a)(2) of the FLSA.
See A.H. Phillips, Inc. v. Walling, 324 U.S. 490, 496-97 (1945)
(“Congress used the word ‘establishment’ [in the ‘retail or
service establishment exemption’] as it is normally used in
business and in government—as meaning a distinct physical place
of business. . . . Moreover, it is quite apparent from the
sparse legislative history of [the exemption] that Congress did
not intend to exempt as a ‘retail establishment’ the . . .
central office of an interstate chain store system.”); Birkett,
286 F.2d at 478 (“Common ownership and close functional and
economic relationship between physically separated units of a
business are not sufficient to make such combined units a single
[retail or service] establishment . . . .”).
18
establishments from the enterprises that control them); cf.
Ecolab, 2008 WL 878456, at *9 (“Congress chose to use the
individual establishment, rather than the entire enterprise, as
the business unit for evaluating the applicability of the
exemption.
An ‘establishment’ is a distinct, physical place of
business, while an ‘enterprise’ is the largest unit of corporate
organization . . . .
Thus, the relevant inquiry is . . .
whether . . . Plaintiffs were employed by a qualifying
establishment at the local or regional level.” (citing 29 C.F.R.
§§ 779.23, 779.303)).
The plaintiff relies on two cases that have found sports
franchises to constitute “establishments” for Section 13(a)(3)
purposes.
In Jeffery v. Sarasota White Sox, Inc., the Eleventh
Circuit Court of Appeals concluded that the Sarasota White Sox,
a minor league baseball team, was “an amusement or recreational
establishment pursuant to 29 U.S.C. § 213.”
64 F.3d at 595.
The court found that the Sarasota White Sox qualified for the
exemption because of the seasonal use of the baseball complex in
Sarasota, Florida for minor league baseball games and for spring
training for the Chicago White Sox, the parent of the Sarasota
White Sox.
Id. at 593, 595.
The court did not factor into the
availability of the exemption the activities of the Chicago
White Sox during the other months of the year at other physical
19
locations.
In Bridewell v. Cincinnati Reds, the District Court
adopted the Magistrate Judge’s conclusion that the Cincinnati
Reds, “as owner of a major league baseball franchise, [was] an
amusement or recreational establishment” for Section 13(a)(3)
purposes.
1994 WL 854075, at *4, adopted with modifications by
Bridewell v. Cincinnati Reds, 1994 WL 866091, at *1, rev’d on
other grounds, 68 F.3d 136.
On appeal, the Sixth Circuit Court
of Appeals assumed without deciding that the Cincinnati Reds was
an “amusement or recreational establishment,” and concluded that
the Reds did not qualify for the Section 13(a)(3) exemption
because the team “operate[d] for more than seven months per
year.”
68 F.3d at 138.
It was clear from the stipulated facts
that the activities of the Reds were conducted year-round at
Riverfront Stadium, where Reds employees performed cleaning and
maintenance work during the baseball season and the off-season.
Id. at 137-39.
The plaintiff argues that MLB is analogous to
the sports franchises in Jeffery and Bridewell,7 both of which
7
The plaintiff also relies on two District Court cases. In
Liger v. New Orleans Hornets NBA Ltd. P’Ship, the court followed
the reasoning of Bridewell, rather than Jeffery, and concluded
that the New Orleans Hornets basketball franchise was an
“amusement or recreational establishment,” but found that the
team operated “for at least eight months each year” and
therefore did not qualify for the exemption. 565 F. Supp. 2d
680, 683-84 (E.D. La. 2008). In Adams v. Detroit Tigers, Inc.,
the court cited Jeffery for the proposition that “[m]ajor-league
baseball teams”—in this case, the Detroit Tigers—“may properly
20
were deemed “establishments” for Section 13(a)(3) purposes, and
that because MLB is undisputedly a year-round operation, the
exemption should not apply.
The plaintiff’s reliance on these cases is misplaced.
In
Jeffery and Bridewell, the plaintiffs were employed in physical
locations where the defendants conducted the sporting events
that satisfied the definition of an “amusement or recreational
establishment.”
Jeffery was a suit by a groundskeeper at the
Sarasota baseball complex.
64 F.3d at 593.
Bridewell was a
suit by maintenance employees at Cincinnati’s Riverfront
Stadium.
68 F.3d at 137.
Neither case involved a suit by
employees who worked at an event or amusement area that was
physically distinct from the location of the baseball
franchise’s central ballpark.
Here, by contrast, FanFest is
alleged to have been a roughly week-long “sports event” that
took place at the Javits Center—a location that was physically
be considered ‘recreational’ establishments”—and went on to
address the separate issue of whether the plaintiff batboys
could properly be considered a separate establishment within the
Tigers. 961 F. Supp. 176, 179 (E.D. Mich. 1997). There was no
issue in either Liger or Adams about the proper treatment of a
seasonal sporting event held at a separate physical place of
business.
21
separate from the enterprise to which FanFest belonged—namely,
MLB.8
Indeed, as one court recently noted, “[a]rguably, the only
reason for defining ‘establishment’ as a distinct physical place
of business [in 29 C.F.R. § 779.23] was so that it could be
distinguished from an integrated business enterprise.”
Wright
v. Adventures Rolling Cross Country, Inc., No. 12 Civ. 982, 2013
WL 1758815, at *5 (N.D. Cal. Apr. 24, 2013).
This conclusion
flows from the repeated comparison between “enterprises” and
“establishments” throughout the relevant regulations.
C.F.R. §§ 779.23, 779.203, 779.303.
See 29
In a case involving a
multiunit enterprise, the physical location of a given
establishment distinguishes it from the parent enterprise.9
See
8
Notably, the relevant duration of operations in Jeffery was the
time that the Sarasota White Sox and the parent Chicago White
Sox operated at the baseball complex in Florida—not the duration
of the Chicago White Sox’s operations as a whole. Similarly,
what matters in this case is the duration of MLB’s operations at
the Javits Center—a physically distinct location where the
plaintiff was employed—not MLB’s operations as a whole.
9
At oral argument, the plaintiff argued for the first time that
the distinction throughout the regulations between
“establishments” as “distinct physical place[s] of business” and
the “enterprises” to which they belong should apply exclusively
to the “retail or service establishment” exemption, and not to
the “amusement or recreational establishment” exemption. (See
Oral Arg. Tr. at 29-30.) This position finds no support in the
regulations themselves, see 29 C.F.R. § 779.23 (“As used in the
[FLSA], term establishment . . . refers to a ‘distinct physical
22
29 C.F.R. §§ 779.23, 779.303; see also Chessin, 184 F.3d at
1192-93 (concluding that two ski areas operated by a single
enterprise constituted distinct establishments by virtue of
their physical separation); Yellowstone Park Lines, 478 F.2d at
289-90 (concluding that due to physical separation, various
restaurants, hotels, and lodges in Yellowstone National Park
were “separate establishment[s]”).
This is just such a case:
taking the facts alleged in the Complaint as true, they
establish that FanFest was a sports event that was physically
separate from the enterprise through which it was operated and
controlled.
(See Am. Compl. ¶¶ 74, 141; see also Bloom Decl.,
place of business’ rather than to ‘an entire business or
enterprise’ which may include several separate places of
business. . . . [T]his is the meaning of the term as used in
section[] . . . 13(a) . . . of the Act.” (emphasis added)), and
is contradicted by cases that focus on physical separation to
define the boundaries of an establishment under the “amusement
or recreational establishment” exemption. See Chessin, 184 F.3d
at 1192; Yellowstone Park Lines, 478 F.2d at 289. The plaintiff
also argued that the definition of an establishment as a
physical place of business should apply only for the purposes of
determining whether the establishment is for “amusement or
recreational” purposes, and not for the purposes of determining
whether it operated for more than seven months in the calendar
year. (See Oral Arg. Tr. at 26-28.) This argument is similarly
without support in the text of the statute, the regulations, or
the relevant case law, all of which indicate that an
“establishment” for Section 13(a)(3) purposes is something that
must be both a) “amusement or recreational,” and b) in operation
for fewer than eight months in a calendar year.
23
Ex. C at 1.)
In other words, the “establishment” at issue
here—as distinguished from the “enterprise” that operated and
controlled it—is defined by its discrete physical location.
Given the legislative history of the Section 13(a)(3)
exemption, the DOL’s consistent interpretations of the statute,
and the plaintiff’s own allegations, FanFest is an “amusement or
recreational establishment” that operated for fewer than eight
months in 2013.10
B.
For the foregoing reasons, the Complaint shows that the
plaintiff worked for an “amusement or recreational
establishment” that operated for fewer than eight months, and,
therefore, that the Section 13(a)(3) exemption applies.
This
defense has been established by the plaintiff’s own pleadings,
which show that FanFest was an “establishment” as that term is
defined under the statute and the applicable regulations, and
that it operated for only a handful of days.
10
It is therefore
For this reason, none of the allegations in the Complaint as
to the extent of MLB’s year-round operations are of any
consequence. (See, e.g., Am. Compl. ¶¶ 1 (“MLB staffed its
baseball operations throughout the year . . . .”), 147 (“MLB
begins recruiting volunteers for the next summer’s All Star Week
events in October of the prior year.”), 153 (“MLB’s paid
workforce consists of at least 435 employees, all of whom work
year-round.”).)
24
appropriate to grant the defendants’ motion to dismiss the
plaintiff’s FLSA claims even at this early stage in the
proceedings.11
Moreover, there is no occasion to reach the
question of whether the plaintiff is an “employee” as that term
is defined in Section 6 of the FLSA.
C.
In addition to his FLSA claims, the plaintiff has claimed
that the defendants violated the NYLL by failing to pay him the
appropriate minimum wage, failing to keep appropriate records
11
In addition to a minimum wage claim under the FLSA, the
plaintiff has brought a claim under FLSA § 11(c), 29 U.S.C.
§ 211(c), alleging MLB’s failure to maintain records relating to
his employment during All Star Week. Section 11(c) requires
employers to “make, keep, and preserve” certain employment
records, as prescribed by DOL regulations. 29 U.S.C. § 211(c).
In turn, DOL regulations require certain records to be kept even
with respect to exempt employees. See 29 C.F.R. § 516.11
(requiring records to be maintained regarding exempt employees’
names, addresses, dates of birth, and sex). However, the
general consensus is that the FLSA provides no private right of
action for recordkeeping violations. See Elwell v. Univ. Hosps.
Home Care Servs., 276 F.3d 832, 843 (6th Cir. 2002); Lopez v.
Tri-State Drywall, Inc., 861 F. Supp. 2d 533, 536-37 (E.D. Pa.
2012) (collecting cases). The parties did not provide their
positions as to whether the FLSA contains a private right of
action for recordkeeping violations, but, at oral argument, the
plaintiff conceded that if his FLSA minimum wage claim is
dismissed, he will no longer have a federal cause of action in
this lawsuit. (See Oral Arg. Tr. at 3-4.) Accordingly, the
FLSA recordkeeping claim must be dismissed.
25
related to his employment, and failing to provide him with the
wage information that is required under New York law.
(See Am.
Compl. ¶¶ 188-203.)
A district court may decline to exercise supplemental
jurisdiction over state-law claims if “the district court has
dismissed all claims over which it has original jurisdiction.”
28 U.S.C. § 1367(c).
When all federal claims are eliminated
before trial, the balance of factors to be considered—including
judicial economy, convenience, fairness, and comity—typically
points towards declining to exercise supplemental jurisdiction
over any remaining state-law claims.
Kolari v. N.Y.—
Presbyterian Hosp., 455 F.3d 118, 122 (2d Cir. 2006).
Having
dismissed all of the claims over which this Court has original
jurisdiction,12 declining to exercise supplemental jurisdiction
over the state-law claims is appropriate at this early stage in
the litigation.
See, e.g., Elgendy v. City of New York, No. 99
Civ. 5196, 2000 WL 1119080, at *6 (S.D.N.Y. Aug. 7, 2000)
(declining to exercise supplemental jurisdiction over state- and
12
This Court had subject-matter jurisdiction over the
plaintiff’s FLSA claims pursuant to 28 U.S.C. § 1331, and
supplemental jurisdiction over the NYLL claims pursuant to 28
U.S.C. § 1367(a). There is no allegation in, or inference from,
the Complaint that diversity jurisdiction pursuant to 28 U.S.C.
§ 1332(a) exists in this action. Accordingly, this Court does
not have original jurisdiction over the NYLL claim.
26
city-law claims after granting the defendant’s motion to dismiss
the federal claims).
The Court therefore dismisses the
plaintiff’s NYLL claims without prejudice.
IV.
The plaintiff has moved for collective certification and
court-authorized notice under FLSA Section 16(b).
Given that
the plaintiff’s claims are dismissed, the plaintiff’s motion
under Section 16(b) is denied as moot.
CONCLUSION
The Court has considered all of the arguments of the
parties.
To the extent not specifically addressed above, the
remaining arguments are either moot or without merit.
For the
foregoing reasons, the defendants’ motion to dismiss the FLSA
claims is granted.
The plaintiff’s New York state-law claims
are dismissed without prejudice.
The plaintiff’s motion for
collective certification and court-authorized notice is denied
as moot.
The Clerk is directed to close Docket Nos. 2 and 35,
to enter judgment, and to close this case.
SO ORDERED.
Dated:
New York, New York
March 25, 2014
______________/s/_____________
John G. Koeltl
United States District Judge
27
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