Chessin v. Keystone Resort Management, s. 98-1181

• Decision Date: 15 July 1999
• Docket Number: Nos. 98-1181,98-1183,s. 98-1181
• Citation: 184 F.3d 1188
• Parties: (10th Cir. 1999) PAUL C. CHESSIN; CHRISTOPHER T. FORMAN; MICHAEL P. GALVIN; CARLA D. HANSON; DANIEL C. HASKIN; LEE R. STRAND; KARIN E. UEHLING, and other persons similarly situated, Plaintiffs-Appellants and Cross-Appellees, v. KEYSTONE RESORT MANAGEMENT, INC., a Colorado corporation, Defendant-Appellee and Cross-Appellant
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1188

184 F.3d 1188 (10th Cir. 1999)

PAUL C. CHESSIN; CHRISTOPHER T. FORMAN; MICHAEL P. GALVIN; CARLA D. HANSON; DANIEL C. HASKIN; LEE R. STRAND; KARIN E. UEHLING, and other persons similarly situated, Plaintiffs-Appellants and Cross-Appellees, v. KEYSTONE RESORT MANAGEMENT, INC., a Colorado corporation, Defendant-Appellee and Cross-Appellant.

Nos. 98-1181, 98-1183

UNITED STATES COURT OF APPEALS TENTH CIRCUIT

July 15, 1999

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO (D.C. No. 94-D-179)

[Copyrighted Material Omitted] David Lichtenstein, Denver, Colorado, for the Plaintiffs-Appellants/Cross-Appellees.

Susan Strebel Sperber (Michael D. Nosler and Samuel M. Ventola with her on the briefs) of Rothgerber, Johnson, & Lyons, Denver, Colorado, for the Defendant-Appellee/Cross-Appellant.

Before BALDOCK, KELLY, and MURPHY, Circuit Judges.

KELLY, Circuit Judge.

This interlocutory appeal arises from an employment suit by ski patrollers against their employer Keystone Resorts Management, Inc. ("KRMI"). Plaintiffs seek to recover overtime pay at one-and-a-half times the rate at which they were regularly employed, liquidated damages, reasonable attorney fees, and costs. The district court denied Plaintiffs' motion for partial summary judgment under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. 201-219, holding that Keystone Ski Area ("Keystone") and Arapahoe Basin Ski Area ("Arapahoe Basin") each constitute an amusement or recreational establishment within the meaning of 29 U.S.C. 213(b)(29), one of several exemptions to the general overtime rule, 29 U.S.C. 207(a). At all relevant times, KRMI owned and operated Keystone and Arapahoe Basin.

Plaintiffs appeal the district court's ruling that (1) Defendant KRMI operated a recreational establishment; (2) Arapahoe Basin is separate from Keystone for 213(b)(29) purposes; and (3) applicability of the exemption should be determined on a plaintiff-by-plaintiff and workweek-by-workweek basis. KRMI cross-appeals the court's determination that it may not retrospectively benefit from the exemption. Our jurisdiction arises under 28 U.S.C. 1292(a), and we affirm.

Background

The seven named Plaintiffs and twenty-nine additional Plaintiffs who filed written consents under 29 U.S.C. 216(b) (requiring written consent for employee to be named as party plaintiff in suit under the FLSA) worked as ski patrollers at Keystone or Arapahoe Basin and were employed by KRMI. KRMI operated an all-season resort in Colorado that included lodging, retail stores, restaurants, a convention center, and real estate sales and development, in addition to skiing.¹ These facilities were located on or near National Forest System lands. Plaintiffs' duties as ski patrollers encompassed snow and terrain management, search and rescue, public relations and customer service. In addition to performing tasks on the ski mountains, patrollers rode shuttle buses serving the ski and hospitality areas and provided information to resort guests on the buses.

Plaintiffs sought partial summary judgment, contending that 213(b)(29) did not apply to KRMI, or any portion of KRMI, because it was not a recreational establishment. KRMI then filed its own motion for summary judgment, claiming that Plaintiffs were not entitled to overtime compensation because they came under the 213(b)(29) exemption. In denying the Plaintiffs' motion, the district court held that Keystone and Arapahoe Basin constitute separate amusement or recreational establishments within the meaning of 213(b)(29). Section 213(b)(29) states that

The provisions of . . . section 207 . . . shall not apply with respect to any employee of an amusement or recreational establishment located in a national park or on land in the National Wildlife Refuge System if such employee (A) is an employee of a private entity engaged in providing services or facilities in a national park or national forest, or on land in the National Wildlife Refuge System, under a contract with the Secretary of the Interior or the Secretary of Agriculture, and (B) receives compensation for employment in excess of fifty-six hours in any workweek at a rate not less than one and one-half times the regular rate at which he is employed [.]

Id. (emphasis added).

The court found a genuine issue of material fact as to whether Plaintiffs worked any weeks longer than fifty-six hours but held that, "[i]f . . . Plaintiffs present evidence at trial that they worked in excess of 56 hours and were not compensated, Defendant is not entitled to the exemption claimed in 213(b)(29)." Aplt. App. at 521.

KRMI subsequently asked the district court to reconsider its holding that the 213(b)(29) exemption would not apply if Plaintiffs could prove that they worked in excess of fifty-six hours without overtime compensation. KRMI also asked the court to clarify how the exemption would be applied. The court denied reconsideration, explaining that each Plaintiff would be compensated at a time-and-a-half rate for work in excess of forty hours in any week for which he worked more than fifty-six hours without overtime pay. It also concluded that "each work week must be analyzed separately" to determine the applicability of 213(b)(29), and "each Plaintiff will bear the burden of proving at trial that he/she worked in excess of 56 hours in a work week and did not receive overtime pay for those hours." Aplt. App. at 584. The parties then requested, and were granted, leave to bring an interlocutory appeal from the district court's ruling on the FLSA claim.

The parties do not dispute that (1) prior to October 1993, KRMI paid Plaintiffs a salary and did not provide overtime compensation, and (2) Plaintiffs worked overtime hours. However, the number of weeks in excess of fifty-six hours (if any) that each Plaintiff worked remains in dispute.

Discussion

The denial of summary judgment is reviewed de novo on an interlocutory appeal. See, e.g., Evanston Ins. Co. v. Stonewall Surplus Ins. Co., 111 F.3d 852, 857-58 (11th Cir. 1997). We apply the same standard as the district court, and summary judgment is appropriate only if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c); see Butler v Prairie Village, Kansas, 172 F.3d 736, 745 (10th Cir. 1999). In reviewing a denial of summary judgment, "we examine the factual record and reasonable inferences therefrom in the light most favorable to the party opposing summary judgment." Butler, 172 F.3d at 745 (quoting Kaul v. Stephan, 83 F.3d 1208, 1212 (10th Cir. 1996)).

In a case involving the FLSA, an employer bears the burden of proving both the nature of the "establishment" it operates and the applicability of an FLSA exemption; we must construe the exemption narrowly against the employer. See Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392, 394 n.11 (1960).

I. Separate Establishments

Plaintiffs argue that the district court failed to identify the correct establishment in assessing the applicability of the 213(b)(29) exemption. The court concluded that Keystone's ski area and non-skiing operations constitute a single establishment but that Arapahoe Basin is separate from Keystone. Plaintiffs challenge the ruling that Keystone and Arapahoe Basin are separate establishments. In their view, KRMI's "operations, marketing, and strategic plan," combined with "[t]he close proximity of Arapahoe Basin to Keystone's lodging facilities, and brevity of the shuttle bus ride between them" show that Arapahoe Basin and Keystone comprised a single establishment during the relevant time period. Aplt. Br. at 30.

In focusing on administrative and economic integration, Plaintiffs misconstrue the meaning of "establishment" under the FLSA. Both the Supreme Court and the Tenth Circuit have held that "Congress used the word 'establishment' to mean a distinct physical place of business rather than an integrated business enterprise." Brennan v. Yellowstone Park Lines, Inc., 478 F.2d 285, 289 (10th Cir. 1973) (citing Phillips, Inc., v. Walling, 324 U.S. 490 (1945)). In Yellowstone Park Lines, we reasoned that, because of the physical distance between restaurants, hotels, and other types of lodging and services within Yellowstone Park, such businesses could not be "considered as one integrated unit subject to exemption under [29 U.S.C. 213(a)(3)]," the provision governing seasonal recreational establishments. See id. at 290. The various establishments were "separate," even though central management made policy for all of them and at least two classes of employees served more than one establishment. See id. at 288-89; see also 29 C.F.R. 779.23 (1998) (the word "establishment," as it appears in 213(b), means "a 'distinct physical place of business' rather than . . . 'an entire business or enterprise' which may include several separate places of business").

The case law in at least one other circuit also supports the district court's ruling on the "separate establishment" issue. In Mitchell v. Birkett, 286 F.2d 474, 477-78 (8th Cir. 1961), two photography shops located nine miles apart were deemed separate establishments under the FLSA. The Eighth Circuit stated:

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 establishment, particularly where, as here, the geographic separation is substantial.

Id. at 478. Although the Yellowstone establishments were more than fifty miles apart, a much greater distance than that between Keystone and Arapahoe Basin, see Yellowstone Park Lines, 478 F.2d at 287, Birkett demonstrates that some courts consider only a few miles a "substantial" geographic separation for the purposes of the FLSA. See Birkett, 286...