F I L E D

United States Court of Appeals

Tenth Circuit

JUL 15 1999

PATRICK FISHER

Clerk

PUBLISH

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

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 CrossAppellees,

vs.

KEYSTONE RESORT

MANAGEMENT, INC., a Colorado

corporation,

Defendant-Appellee and CrossAppellant.

Nos. 98-1181, 98-1183

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO

(D.C. No. 94-D-179)

David Lichtenstein, Denver, Colorado, for the Plaintiffs-Appellants/CrossAppellees.

Susan Strebel Sperber (Michael D. Nosler and Samuel M. Ventola with her on the

briefs) of Rothgerber, Johnson, & Lyons, Denver, Colorado, for the DefendantAppellee/Cross-Appellant.

Before BALDOCK, KELLY, and MURPHY, Circuit Judges.
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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
1

 After this case arose, KRMI was acquired by Vail Associates and is now

known as Vail Summer Resorts, Inc.

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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
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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
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reconsideration, explaining that each Plaintiff would be compensated at a timeand-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
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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
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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
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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 F.2d at 477-78.

In the instant case, Plaintiffs allege that the two ski areas marketed their

operations as one enterprise, exchanged some employees, and lacked separate

accounting and management. However, issues of business integration are not

dispositive in determining whether establishments are separate. Given the sixmile separation between Arapahoe Basin and Keystone, we hold that they

constitute separate establishments for the purposes of § 213(b)(29). 

II. Amusement or Recreational Establishment
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According to Plaintiffs, KRMI did not constitute a recreational

establishment for the purposes of § 213(b)(29) because providing ski facilities

could not be considered KRMI’s principal activity or purpose. See Hamilton v.

Tulsa County Public Facilities Authority, 85 F.3d 494, 498 (10th Cir. 1996)

(stating that inquiry into recreational character looks to “primary purpose” of the

establishment). Since we consider Arapahoe Basin a separate establishment

under § 213(b)(29), the only question is whether Keystone’s facilities are

primarily recreational. Arapahoe Basin offers few, if any, attractions for the

business traveler or retail customer; such facilities are all located at Keystone. 

 In support of their position, Plaintiffs contend that Keystone derives

substantial revenue from allegedly non-recreational sources, such as hotels,

restaurants, retail stores, and a convention center, and that many of its clients

visit on business trips. Because lodging and food sales represent Keystone’s

second largest revenue source, aside from ski operations, see Aplt. App. at 741-

56, the contentions that lodging is not “recreation” and that Congress did not

intend the FLSA’s recreational establishment exemption to extend to full-service

resorts represent the crux of Plaintiffs’ challenge. 

We need not decide whether lodging, isolated from Keystone’s overall

business, constitutes recreation within the meaning of § 213(b)(29). Rather, our

inquiry centers on whether lodging and other services like restaurants and retail
2

 The only issue in Yellowstone Park Lines was whether the facilities

constituted one establishment. The parties stipulated that, if the court deemed

establishments “separate,” the seasonal recreational exemption, 29 U.S.C. §

213(a)(3), would apply. See Yellowstone Park Lines, 478 F.2d at 287.

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shops, viewed in the context of Keystone’s operations on or near national forest

land, have a recreational nature. This an issue of first impression in the Tenth

Circuit. According to Plaintiffs, Hamilton establishes that “[i]t is the character

of the revenue producing activity which affords the employer the protection of

the exemption.” See 85 F.3d at 497. However, the Hamilton court was

concerned with a different issue – whether the proper focus of its exemption

inquiry was the character of the establishment’s revenue-producing activity,

rather than the type of work performed by the employee, as the plaintiff urged. 

See id. at 497-98. 

Another Tenth Circuit case appears to lend support to KRMI’s position. In

Yellowstone Park Lines, we noted (but did not hold) that the facilities operated

by Yellowstone Park Company and its subsidiary – including many hotels and

cabins – were “[u]ndoubtedly . . . recreational in character.” Yellowstone Park

Lines, 478 F.2d at 288.2 The sparse legislative history confirms that § 213(b)(29)

requires “concessioners providing accommodations, food and other consumer

goods in ‘national parks’” to “pay employees . . . time-and-one-half their regular

rate of pay for all hours over 56 in a week.” H.R. Rep. No. 95-521, at 34 (1977),
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reprinted in 1977 U.S.C.C.A.N. 3201, 3235.

Plaintiffs cite Brennan v. Texas City Dike & Marina, Inc., 492 F.2d 1115

(5th Cir. 1974) for the proposition that a ruling in KRMI’s favor will allow any

merchant or lodging provider in the Rocky Mountains to circumvent the general

overtime provisions of the FLSA – thus creating a vast overtime exemption that

Congress did not intend. Plaintiffs exaggerate the potential impact of affirming

the district court’s orders. Moreover, Texas City Dike is distinguishable from

Plaintiffs’ case. In Texas City Dike, a marina, located on the Gulf of Mexico and

deriving its principal revenue from the sale of boats, motors, and trailers, was

found ineligible for the § 213(a)(3) exemption. See id. at 1119-20. The Fifth

Circuit reasoned that, unlike a national park, the Gulf was not set aside for

recreational use. Indeed, the court acknowledged, “enterprises that solely or

primarily sell goods” may qualify for the § 213(a)(3) exemption if they contract

to operate in a “geographically delimited” area designated for recreational use. 

Id. at 1118-19; see id. at 1119 n.15. “Examples are pro shops at golf courses and

dry goods stores in national parks.” Id at 1118-19 (footnotes omitted). 

By similar logic, § 213(b)(29) applies to Keystone. The parties do not

dispute that both the Keystone and Arapahoe Basin ski areas occupy national

forest land and that KRMI obtained a special use permit from the Department of

Agriculture, authorizing it to maintain a “four season recreation resort” in the
3

 KRMI urges us to give great deference to Colorado Department of Labor

Minimum Wage Order 22 and a brief letter from a Department of Labor

investigator concluding that Keystone is a recreational establishment. Given our

disposition of the “separate establishment” and “recreational establishment”

issues, we need not decide what deference we owe these documents. We note,

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White River National Forest. Aplt. App. at 158 (emphasis omitted); see Aplt. Br.

at 7. Thus, the fact that Keystone offers lodging, retail shops, restaurants and

other activities besides skiing does not disqualify it from the § 213(b)(29)

exemption. The evidence also establishes that, on an annual basis, ski operations

represent the largest revenue-producing category for Keystone. See Aplt. App. at

745-56. Thus, we hold that Keystone and Arapahoe Basin were, at all relevant

times, recreational establishments within the meaning of § 213(b)(29).

We decline to require an enterprise to derive a certain percentage of

revenue from strictly recreational activities in order to be considered recreational. 

Although the Texas City Dike court used an income test to determine whether

providing recreation constitutes an enterprise’s principal activity, see Texas City

Dike, 492 F.2d at 1119-20, the Tenth Circuit has never held that financial

percentages are the only relevant factors. We prefer to examine the totality of the

circumstances, including but not limited to the establishment’s primary purpose;

activities and services, such as restaurants and shops, that it offers incidental to

its recreational facilities; its relationship to land set aside for recreational use;

and its revenue sources.3
however, that the latter document is neither admissible as a proper affidavit under

Fed. R. Civ. P. 56(e), nor does it demonstrate the thorough consideration and

reasoning necessary to provide guidance to this court. See Skidmore v. Swift &

Co., 323 U.S. 134, 140 (1944). 

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III. Calculation of Overtime Compensation Owed to Plaintiffs

A. Whether KRMI Has Lost the Benefit of the Exemption

The district court held that KRMI does not qualify for the § 213(b)(29)

exemption for any workweek in which a Plaintiff can prove that he worked more

than fifty-six hours without time-and-a-half compensation. KRMI is not eligible

for the exemption under these circumstances, the court reasoned, because §

213(b)(29) embodies two conditions, both of which must be met. First, the

employee must work for a recreational establishment in a national park or

national forest or on National Wildlife Refuge System land. See §

213(b)(29)(A). Second, the employee must “receiv[e] 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.” See § 213(b)(29)(B). According to the

district court, KRMI must compensate each Plaintiff at a time-and-a-half rate for

work in excess of forty hours during any given week that KRMI failed to comply

with § 213(b)(29)(B).

KRMI disputes this interpretation, contending that violation of §

213(b)(29)(B) means only that the employer must retroactively comply – i.e., that
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it must pay the employee overtime for work in excess of fifty-six hours. In

support of its position, KRMI cites several cases regarding failure to comply with

the conditions of other FLSA exemptions. See Martin v. Coventry Fire Dist., 981

F.2d 1358 (1st Cir. 1992) (construing § 207(k) overtime exemption for

firefighters and law enforcement officers); Mills v. State of Maine, 853 F. Supp.

551 (D. Maine 1994) (construing § 207(k) exemption for state probation

officers); Lantz v. B-1202 Corp., 429 F. Supp 421 (E.D. Mich. 1977)

(interpreting § 213(b)(8)(A) overtime exemption for restaurant employees). Two

principles are common to these opinions. First, they suggest that receipt by an

employee of overtime compensation according to the provisions of a FLSA

exemption is not a condition precedent to the exemption’s applicability. See

Lantz, 429 F. Supp. at 424. Second, two of the cases cite the penalty provision

of the FLSA, 29 U.S.C. § 216, for the rule that “an employer who fails to pay

statutorily required overtime . . . must simply pay the overtime owed (if the

violation is merely technical and in good faith).” Coventry Fire Dist., 981 F.2d

at 1360; see Mills, 853 F. Supp. at 552. None of these cases construes

§213(b)(29), however, and unlike KRMI, the defendant in Lantz was faced with a

relatively new statutory amendment, which arguably excused its failure to

comply. See Lantz, 429 F. Supp. at 423. 

We next consider our precedent. In Spradling v. City of Tulsa, 95 F.3d
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1492, 1504-05 (10th Cir. 1996), we stated that an employer must affirmatively

prove that it qualified for a FLSA exemption either because (1) it publicly

declared its intent to establish a regime satisfying the exemption, or (2) the

employee’s working conditions actually met the requirements of the exemption. 

Although the employer failed to carry its burden in Spradling, proof that it

actually paid overtime compensation in accord with § 207(k) does not seem to

have been required. However, because Spradling involved a § 207(k) exemption,

it does not provide a good model for determining whether KRMI adopted §

213(b)(29). 

Interpreting § 207(k), which authorizes the establishment of non-traditional

work periods for firemen, the Spradling court held that “a public employer may

establish a 7(k) work period even without making a public declaration, as long as

its employees actually work a regularly recurring cycle of between 7 and 28

days.” Spradling, 95 F.3d at 1505 (quoting McGrath v. City of Philadelphia, 864

F. Supp. 466, 476 (E.D. Pa. 1994)) (emphasis added). To trigger the exemption,

the evidence had to show that the firemen regularly adhered to the § 207(k) work

period. Thus, the mere fact that a ski patroller worked at least one fifty-six-hour

week per season does not prove that KRMI adopted § 213(b)(29). 

We are thus faced with an issue of first impression in the Tenth Circuit –

whether to construe § 213(b)(29) to exempt KRMI from normal overtime rules
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based on a policy that it retrospectively adopted in response to this lawsuit. 

Although the First Circuit took this road, see Coventry Fire Dist., 981 F.2d at

1360, we decline to follow its lead. Section 213(b)(29) – which consists of two

conditions joined by the word “and” – is meaningless if an employer does not

have to satisfy both conditions. See Usery v. Associated Drugs, Inc., 538 F.2d

1191, 1193-94 (5th Cir. 1976) (holding that, to avail itself of the “professional

employees” exemption under § 213(a)(1), employer had to prove “each of the

conditions or standards prescirbed by the Regulations”). If KRMI cannot

demonstrate compliance with § 213(b)(29)(B), it must pay overtime

compensation as required by §207(a).

B. Week-by-Week, Plaintiff-by-Plaintiff Determination

The district court ruled that “each work week must be analyzed separately”

and “the exemption must be applied individually on a Plaintiff by Plaintiff basis.”

Aplt. App. at 584. The language of § 213(b)(29) supports a plaintiff-by-plaintiff

approach because it refers to “any employee” (instead of the plural “employees”)

and because it makes the exemption contingent on what kind of establishment the

employee works for and whether he receives overtime pay, rather than on the

employer’s overarching policy. Many of the regulations for implementing the

FLSA also center on the employees covered by the Act, instead of employers
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subject to it. See, e.g., 29 C.F.R. § 778.103 (1998) (referring to any workweek in

which “an employee is covered by the Act and is not exempt from its overtime

pay requirements”). 

A workweek-by-workweek approach is also bolstered by the plain language

of the statute and regulations. Section 213(b)(29) refers to “any workweek,”

rather than some alternate unit of time, see 29 U.S.C. § 213(b)(29)(B), and as

KRMI notes, regulations governing the application of § 207 make the workweek

the proper unit for calculating overtime compensation. See 29 C.F.R. § 778.103. 

The applicability of the § 213(b)(29) exemption must be determined on a

plaintiff-by-plaintiff and workweek-by-workweek basis.

For the foregoing reasons, the district court’s interlocutory orders are

AFFIRMED.