Employment Law Daily Trainees in casino ‘dealer school’ get second shot at claim for unpaid wages
Wednesday, April 27, 2016

Trainees in casino ‘dealer school’ get second shot at claim for unpaid wages

By Kathleen Kapusta, J.D. While the fact that a casino’s table games were not in operation during the period of time the plaintiffs attended, but were not paid for, a “dealer training school” may prove an insurmountable obstacle to their recovery under the FLSA, the Fourth Circuit concluded that this did not as a matter of law bar them from recovery. Finding that they alleged sufficient facts to state a claim that the casino violated the FLSA and Maryland wage laws, the appeals court reversed the district court’s dismissal of their lawsuit alleging they were entitled to compensation for the training course (Harbourt v. PPE Casino Resorts Maryland, LLC, April 25, 2016, Motz, D.). After voters authorized Maryland’s casinos to begin operating table games, the casino sought to recruit and train more than 800 people to staff 150 table games it planned to operate. It advertised the new dealer positions, as well as a free “dealer school.” Although the course was purportedly run in conjunction with a community college, the casino wrote the course material, supplied instructors, required attendees to complete direct deposit and W-2 form, and made them pay $24 for it to obtain their driving records. Lower court proceedings. The plaintiffs were among 10,000 individuals who applied for the dealer positions. Approximately 831 individuals, including the plaintiffs, were selected to attend the dealer course, which consisted of 20 hours of instruction per week. They were not paid for the time spent attending the training course. The plaintiffs filed a putative class action asserting violations of the FLSA and state law and the district court, finding that they failed to show that the primary beneficiary of their attendance was the casino rather than themselves, dismissed the lawsuit. Didn’t operate games. On appeal, the casino maintained that the complaint failed because it was impossible for the trainees to show they provided the casino with any work or that it received any benefit during the time they attended dealer’s school because it did not operate table games at that time. Noting that “work” for the FLSA broadly encompasses “physical or mental exertion (whether burdensome or not) controlled or required by the employer,” the Fourth Circuit observed that training can constitute work under the statute. “That the Casino could not operate table games during the ‘dealer school’ does not necessarily mean that the trainees were not working for FLSA purposes in attending the required ‘school,’” the court explained. While the casino seemed to believe that because the trainees could not interact with paying customers during the “school,” they automatically failed to qualify as FLSA employees, the court pointed out that they were in the very same position as all other persons training for positions where they could not yet perform their duties, either because the service was not yet legal, the person was not yet licensed, or the employer was not yet operating, such as inexperienced persons required to train to be waiters in a huge about-to-be-licensed, but not yet open, restaurant. Primary benefit. Whether the training constitutes work for FLSA purposes depends on whether it primarily constitutes a benefit to the employer or trainee, said the court, and resolution of that question could not be determined by the trainees’ complaint. The trainees alleged the casino received a very large and immediate benefit: an entire workforce of over 800 dealers trained to operate table games to the casino’s specifications at the very moment the games became legal. They further alleged they received very little from the training that did not primarily benefit the casino because it was unique to its specifications and not transferrable to work in other casinos. While transferability of training is an important factor in balancing who benefitted the most from the training, the court noted that here there were “charges” that the training was “either conceived or carried out in such a way as to violate . . . the spirit of the minimum wage law.” Specifically, the plaintiffs alleged that the “sole purpose” of the casino’s “temporary makeshift ‘school’ was to hire the exact number of dealers needed to fill the vacant table games positions” and that the casino “disguised its employee-training course as a school for the purpose of not paying” the trainees. If true, said the court, a fact finder could conclude that requiring applicants to attend a training “school” for 20 hours each week for 12 weeks, which was advertised to be associated with a community college course but that allegedly had nothing to do with any college, demonstrated that the casino “conceived or carried out” its “school” to avoid paying the minimum wage and that an employer would only take such actions to avoid paying the minimum wage to persons who were labeled “trainees” but who actually worked for the casino and were FLSA employees. Last two days. As for the fact that the Casino paid all participants in the school the minimum hourly wage for the last two days of the training, the court found this suggested it regarded the participants in the “dealer school” as employees for those two days. While it may be that it was only during those two days that they performed “physical or mental exertion” that was “pursued necessarily and primarily for the benefit of the employer and his business,” the record supplied no basis for such a conclusion, said the court, finding it unclear what distinguished those two days from the rest of the training period. Expressing no opinion as to whether attending the “dealer school” constituted “work” and whether the trainees were “employees” for FLSA purposes, the court found they alleged sufficient facts to survive the casino’s motion to dismiss.

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