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Decided: April 25, 2016

The Fourth Circuit reversed and remanded the district court’s dismissal.

Pursuant to the legalization of gambling in Maryland and a November 2012 referendum that authorized casinos to begin operating table games, such as blackjack, poker and craps, on April 11, 2013, PPE Casino Resorts Maryland, LLC (“the Casino”) planned to open about 150 table games at Maryland Live!, the casino they owned and operated in Hanover, Maryland. Knowing that it needed to hire and train nearly 830 dealers to operate the planned tables, the Casino developed a required training program called “dealer school,” and began advertising employment opportunities for table game dealers. Claudia Harbourt, Michael Lukoski, and Ursula Pocknett (collectively “the Plaintiffs”), were among those extensively interviewed and ultimately selected to attend the “dealer school.” However, only Lukoski attended the “dealer school” for the entire twelve weeks and worked as a dealer at the Casino. Harbourt and Pocknett were not paid at all, but Lukoski received minimum wage of $7.25 per hour, for the last two days of “dealer school.” In 2014, the Plaintiffs filed suit claiming that the Casino had violated the Fair Labor Standards Act (“FLSA”), as well as various Maryland wage laws, but the district court granted the Casino’s motion to dismiss for failure to state a claim upon which relief can be granted.

Under the FLSA, employers must pay employees minimum hourly wage for all hours worked. As the Court notes, the Supreme Court has interpreted “work” as any physical or mental exertion required by and primarily for the benefit of the employer and his business. In the only Fourth Circuit case to address the issue, McLaughlin v. Ensley, the Court relied on the Supreme Court’s decision in Wailing v. Portland Terminal Co. that a trainee could be considered an “employee” for purposes of the FLSA, and held that whether or not a trainee constitutes an employee depends on whether the trainee or the employer is the “primary beneficiary” of the training.

When looking at the present case, the Court decided that examination of the Plaintiffs’ complaint alone could not resolve the question as to who primarily received the benefit of the training, and pointed out various facts alleged by the Plaintiff that could lead a reasonable fact finder to the conclusion that the Casino was the primary beneficiary. For instance, based on the alleged fact that, as a result of the “dealer camp,” the Casino had a trained workforce of over 800 dealers ready to operate the table games on the day they became legal, a fact finder could find that the Casino received a substantial and immediately benefit for the training. Also, the Casino advertising that the training program was associated with a community college when, as the Plaintiffs allege, no such association existed could demonstrate to a fact finder that the Casino developed the “dealer school” in order to avoid paying the minimum wage. Accordingly, the Court held that the Plaintiffs alleged sufficient facts to raise question as to whether or not, for the purposes of the FLSA, the trainees constitute employees who performed work, and therefore reversed and remanded the district court’s decision.

Full Opinion

Charlotte Harrell