Reich v. Parker Fire Protection Dist.

• Decision Date: 22 March 1993
• Docket Number: No. 91-1425,91-1425
• Citation: Reich v. Parker Fire Protection Dist., 992 F.2d 1023 (10th Cir. 1993)
• Parties: 125 Lab.Cas. P 35,832, 1 Wage & Hour Cas.2d (BNA) 748 Robert B. REICH, Secretary of Labor, United States Department of Labor, * Plaintiff-Appellant, v. PARKER FIRE PROTECTION DISTRICT, a Division of Parker city government, Defendant-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1023

992 F.2d 1023

125 Lab.Cas. P 35,832, 1 Wage & Hour Cas.2d

(BNA) 748

Robert B. REICH, Secretary of Labor, United States Department of Labor, ^* Plaintiff-Appellant, v. PARKER FIRE PROTECTION DISTRICT, a Division of Parker city government, Defendant-Appellee.

No. 91-1425.

United States Court of Appeals Tenth Circuit.

March 22, 1993.

Order on Denial of Rehearing and

Rehearing En Banc May 28, 1993.

Joan Brenner, Attorney (Marshall J. Breger, Solicitor of Labor, Monica Gallagher, Associate Solicitor, Tedrick A. Housh, Regional Solicitor, William J. Stone, Counsel for Appellate Litigation, with her on the brief), U.S. Dept. of Labor, Washington, DC, for plaintiff-appellant.

David C. Hoskins, Parker, CO, for defendant-appellee.

Before LOGAN, ANDERSON and BALDOCK, Circuit Judges.

LOGAN, Circuit Judge.

Plaintiff, the Secretary of Labor, brought suit against defendant Parker Fire Protection District under the Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 201-219, seeking to recover minimum wages that it alleged were due to four firefighters for the time they spent in training at the firefighting academy conducted by defendant in 1989. The district court granted summary judgment in favor of defendant, holding that these men were not employees, Martin v. Parker Fire Protection Dist., 774 F.Supp. 1301 (D.Colo.1991). The Secretary has appealed. The only issues on appeal are the proper test for distinguishing between trainees and employees under FLSA, how strictly we should apply a six factor enumeration developed by the Department of Labor's Wage and Hour Division, and whether the district court properly granted summary judgment for defendant.

I

In 1983, defendant began hiring career firefighters to replace its volunteer force. Prospective firefighters seeking employment with defendant had to submit applications and pass an initial screening before taking a written test. High scorers on the written examination were then tested physically. Candidates who performed satisfactorily on the physical test were further screened by oral interviews. Finally, a limited number of interviewees were selected to attend the firefighting academy. Permanent employment as a firefighter was conditioned upon satisfactory completion of the ten week long training period. Because only the number expected to be hired were sent to the academy, those who successfully completed the course had every reasonable expectation of being hired, as in fact they were in this case. Trainees understood that although they could obtain loans from defendant during this time, they were not entitled to wages for the time they spent at the academy.

Defendant required attendance at its academy not only to ensure that its firefighters knew basic fire science and defendant's standard operating procedures, but also to build a sense of teamwork and cooperation among the incoming firefighters. Even certified and experienced firefighters had to complete instruction at the academy before going to work for defendant. The academy curriculum included classroom lectures, tours of the district, demonstrations, physical training, and simulations. Trainees also maintained defendant's equipment. During the final weeks of the 1989 academy, the four trainees in question staffed a truck that had previously been attended by volunteers. Although they were never called into service, they maintained the truck and its equipment in a state of readiness. On one occasion, while returning from a training exercise, the trainees responded to a car accident and provided paramedical services.

Summary judgment is appropriate when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). We review a decision on summary judgment de novo, using the same standard applied by the district court. Furthermore, "the ultimate determination of employee status is a finding of law subject to de novo consideration by this court." Brock v. Mr. W Fireworks, Inc., 814 F.2d 1042, 1045 (5th Cir.), cert. denied, 484 U.S. 924, 108 S.Ct. 286, 98 L.Ed.2d 246 (1987).

II

The FLSA itself provides little guidance in distinguishing between trainees and employees. The Act defines employee as "any individual employed by an employer." 29 U.S.C. § 203(e)(1). To " '[e]mploy' includes to suffer or permit to work." Id. § 203(g). To give content to this very broad statutory language, using factors first articulated in the Supreme Court's landmark decision in Walling v. Portland Terminal Co., 330 U.S. 148, 67 S.Ct. 639, 91 L.Ed. 809 (1947), the Department of Labor's Wage and Hour Division has developed a test listing six criteria for determining whether trainees are employees within the meaning of FLSA. Both parties agree that this test is the proper standard to apply here. It provides:

Whether trainees are employees under the Act, according to the WH Administrator, will depend upon all the circumstances surrounding their activities on the premises of the employer. If all six of the following criteria apply, the trainees are not employees within the meaning of the Act:

^* The training, even though it includes actual operation of the facilities of the employer, is similar to that which would be given in a vocational school[.]

^* The training is for the benefit of the trainee[.]

^* The trainees do not displace regular employees, but work under close observation[.]

^* The employer that provides the training derives no immediate advantage from the activities of the trainees and on occasion his operations may actually be impeded[.]

^* The trainees are not necessarily entitled to a job at the completion of the training period[.]

^* The employer and the trainees understand that the trainees are not entitled to wages for the time spent in training.

Wage & Hour Manual (BNA) 91:416 (1975). The parties disagree, however, over how this test is to be applied. At oral argument counsel for the Secretary denied that we are bound absolutely to an all or nothing standard. Nevertheless, the essence of the Secretary's argument is that unless all six criteria are met, the trainees are employees for purposes of FLSA. Defendant argues that, as a true "totality of the circumstances" test, this determination should not turn on the presence or absence of one factor in the equation.

Neither the six factor test nor the Secretary's understanding of how it is to be applied are to be given the high level of deference accorded to agency regulations under Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Proper judicial treatment of nonregulatory guidelines, recently reaffirmed in EEOC v. Arabian Am. Oil Co., --- U.S. ----, ----, 111 S.Ct. 1227, 1235, 113 L.Ed.2d 274 (1991), was first articulated in a wage and hour case under FLSA:

We consider that the rulings, interpretations and opinions of the Administrator under this Act, while not controlling upon the courts by reason of their authority, do constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance. The weight of such a judgment in a particular case will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control.

Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S.Ct. 161, 164, 89 L.Ed. 124 (1944).

The six criteria in the Secretary's test were derived almost directly from Portland Terminal and have appeared in Wage and Hour Administrator opinions since at least 1967. Several courts have referred to this test and conducted their analyses of employment status according to its standards. See Atkins v. General Motors Corp., 701 F.2d 1124, 1127 (5th Cir.1983); Donovan v. American Airlines, Inc., 686 F.2d 267, 273 n. 7 (5th Cir.1982); Marshall v. Baptist Hospital, Inc., 473 F.Supp. 465, 478 (M.D.Tenn.1979), rev'd on other grounds, 668 F.2d 234 (6th Cir.1981). Other courts have used elements of this test in applying Portland Terminal directly. See McLaughlin v. Ensley, 877 F.2d 1207, 1209 n. 2 (4th Cir.1989); Wirtz v. Wardlaw, 339 F.2d 785, 787-88 (4th Cir.1964); Bailey v. Pilots' Ass'n for the Bay and River Delaware, 406 F.Supp. 1302, 1306 (E.D.Pa.1976). Similarly, numerous letter opinions of the Wage and Hour Administrator indicate that the Department of Labor has consistently responded to inquiries concerning trainees' employment status by applying this test. See, e.g., Op.Wage-Hour Adm'r No. 1067 (March 31, 1970); Op.Wage-Hour Adm'r No. 1001 (June 9, 1969; Op.Wage-Hour Adm'r No. 533 (Dec. 2, 1966).

Nevertheless, following Skidmore we find little support for as strict an application of this test as the Secretary urges before us. Although we do not doubt that the Secretary thoroughly considered her position, we believe that the position she urges upon us is inconsistent with prior Wage and Hour Division interpretations and opinions. Moreover, there is nothing in Portland Terminal to support an "all or nothing" approach. The prefatory language to the Secretary's test itself makes clear that the six factors are meant as an assessment of the totality of the circumstances. "Whether trainees are employees ... will depend upon all of the circumstances surrounding their activities on the premises of the employer." Wage & Hour Manual (BNA) 91:416. Wage and Hour Administrator opinions also support this view. "The Court has made it clear that there is no single rule or test for determining whether an individual is an employee, but that the total situation controls. The Court has indicated a number of factors which help to determine whether an employment relationship exists." Op.Wage-Hour Adm'r No. 638 (July 18, 1967).

This circuit has no decision on the employee-trainee distinction, but in the analogous situation of distinguishing between an...