The Fourth Circuit recently decided in Harbourt v. PPE Casino Resorts Maryland, LLC that casino workers may proceed with a putative class action alleging that their unpaid attendance at a Maryland casino’s “dealer school” violated the Fair Labor Standards Act (“FLSA”) and Maryland wage laws.

Background

Plaintiffs alleged that the Casino advertised for dealer positions after Maryland authorized the operation of table games.  The Casino invited approximately 830 applicants, including the named plaintiffs, Claudia Harbourt, Michael Lukoski and Ursula Pocknett, to attend a free twelve-week “dealer school” to be “held in conjunction with Anne Arundel County Community College” and aimed at teaching them “how to conduct table games” at the Casino.

The dealer school was scheduled for twenty hours per week over twelve weeks. Plaintiffs alleged that the advertised community college had no involvement in the school and the Casino authored the materials and provided the instruction.  Attendees completed new hire paperwork, submitted to a drug test and provided the Casino with information to conduct background checks required for the attendees to obtain gambling licenses.

Plaintiffs Harbourt and Pocknett attended the dealer school for eight and eleven weeks, respectively, and were not paid for their attendance.  Plaintiff Lukoski attended the dealer school for the full twelve weeks and began working as a dealer at the Casino.  He received minimum wage of $7.25 per hour for the last two days of his attendance at the dealer school.

Plaintiffs filed a putative class and collective action lawsuit asserting violations of the FLSA and Maryland wage laws claiming their time spent at the dealer school was compensable.  The district court granted the Casino’s motion to dismiss, finding that Plaintiffs “failed to show that the primary beneficiary of their attendance at the training was the Casino rather than themselves” and therefore the time spent at the dealer school was not compensable.

Decision on Appeal

The Fourth Circuit reversed, finding that Plaintiffs sufficiently alleged that those who attended the training school were employees performing “work” for the Casino within the meaning of the FLSA and Maryland wage and hour laws.  The Court relied on the Plaintiffs’ allegations that the Casino received an immediate benefit in a trained workforce of over 800 dealers, “the training was unique to the Casino’s specifications and not transferrable to work in other casinos” and attendees were paid minimum wage for the last two days of the dealer school, which suggested that the Casino considered the attendees working for at least those two days.  The Fourth Circuit also found sufficient allegations to conclude that the Casino “conceived or carried out” the dealer school in an effort to avoid paying minimum wage by advertising that the school was associated with a community college, when in fact the college had no involvement.

Takeaway

While the Fourth Circuit did not express an opinion about the likelihood of Plaintiffs’ success on the merits and noted that “[t]he fact that table games were not in operation during the training well may prove an insurmountable obstacle[,]” Harbourt is an important reminder for employers that  training may constitute compensable time under the FLSA and state wage and hour laws, particularly where the primary purpose of the training is to benefit the employer.