[DO NOT PUBLISH]
IN THE U NITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRC UIT

________________________ No. 12

- 16434 Non

- Argument Calendar

________________________ D.C. Docket No. 2:11

- cv - 14432

- KMM

JOHN MANN, on behalf of himself and others similarly situated, Plaintiff

- Appellee ,

versus MICHAEL FALK AND DEBRA FALK, d.b.a. Ad e laide Shores RV Resort, MICHAEL FALK, individually, DEBRA FALK, individually, Defendant s - Appellants.

________________________ Appeal from the United States District Court for the Southern District of Florida

________________________ (July 9, 2013) Case: 12-16434 Date Filed: 07/09/2013 Page: 1 of 112 Before WILSON , PRYOR and ANDERSON , Circuit Judges.
PER CURIAM: This appeal presents the issue whether a recreational vehicle park qualifies as a recreational establishment that is statutorily exempt from providing its employees overtime compensation under the Fair Labor Standards Act. John
Mann s erved for several yea rs as the maintenance man and groundskeeper at the Adelaide Shores RV Resort, and after he was fired, he su ed the owners of the resort, Michael and Debra Falk , for unpaid overtime compensation under the Act

. See 29 U.S.C. § 207(a)(1). The Falks moved for summary judgment on the ground that Adelaide Shores was a recreational establishment exempt from the overtime provision , but the district court ruled that Adelaide Shores did not qualify as a recreational establishment and entered a partial summ ary judgment in favor of
Mann

. S ee id. § 213(a)(3) . After a jury awarded Mann more than $37,000 in
overtime wages , the Falks appealed the judgment against them

. We affirm. I. BACKGROUND Adleaide Shores is a recreational vehicle park that caters to retirees who travel to Florida during the winter. Adelaide Shores derives approximately 92 percent of its income from renting lots , and the remainder of its income from selling recreational vehicles. Approximately 10 percent of the recreational vehicle

Case: 12-16434 Date Filed: 07/09/2013 Page: 2 of 113 l ots are occupied permanent ly , while other lots are leased yearly and occupied periodical ly

. The residents of Adelaide Shores sign a residential lease agreement , which refers to Adelaide Shores as the “landlord” and the residents as “tenants.” All annual leaseholders and permanent residents are required to pay the majority of their annual rent in November. Michael Falk hired Mann to perform maintenance and landscaping tasks at Adelaide Shores . Mann worked as an independent contractor from May 2004 until August 2009, when Mann became Falk’s employee

. While M ann worked at Adelaide Shores, its resident s could participate in free daily activities on its grounds , and Adelaide Shores had golf professionals who provided lessons at another site and coordinated trips to local golf courses. An activities committee

c omprised of residents of Adelaide Shores organized many activities in the community , and proceeds o f the activities went to the committee, not to the Falks.
B etween November 2010 and March 2011, Adelaide Shores h ire d an Activities Director who received a lot for a recreational vehicle free of charge in exchange for her services. In November 2011, Michael Falk fired Mann. Mann complained of retaliation for protesting the denial of overtime compensation , 29 U.S.C. § 215(a)(3), the denial of overtime wages , id. § 207(a)(1), and unjust enrichment. Mann also included in his complaint a claim for

Case: 12-16434 Date Filed: 07/09/2013 Page: 3 of 114 declaratory relief, but he later dismissed that c laim

. T he Falks answered t hat Mann did not have a good faith, objectively reasonable belief that the denial of overtime compensation was unlawful ; Adelaide Shores was a recreational establishment that

was statutorily exempt from the overtime provision of the Fair La bor Standards
Act ; and Mann’s claim for unjust enrichment was preempted by the Federal Insurance Contributions Act. Later, t he Falks moved for summary judgment on all claims, and Mann moved for partial summary judgment regarding the Falks’ liability for u npaid overtime compensation. The district court granted partial summary judgment to both parties. The district court granted partial summary judgment to Mann on the ground that the Falks were an employer under the Fair Labor Standards Act and Adelaide Shores did not qualify as a recreational establishment. The district court granted summary judgment in favor of t he Falks on the ground that Mann ’s claim of unjust enrichment was preempted by the Insurance Contributions Act. Later, a jury found that the Falks had not retaliated against Mann , but that the Falks had violated the overtime compensation law and owed Mann $37,00 7.94 in unpaid wages

. II. STANDARD OF REVIEW We review a summary judgment de novo and view the evidence in the light most favorable to the nonmoving party. See Gregory v. First Title Of Am

. , Inc. ,

Case: 12-16434 Date Filed: 07/09/2013 Page: 4 of 115 555 F.3d 1300 , 1301 ( 11 th Cir

. 2009 ) . Summary judgment i s appropriate when there exist s no genuine issue of material fact and the moving p arty is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). III. DISCUSSION The Falks argue that Adelaide Shores satisfies the two

- part test to be eligible for the r ecreational exemption to the overtime compensation provision of the Fair Labor Standards Act

. Th e Falks contend that Adelaide Shores qualifies as a recreational establishment because it is a destination getaway that offers activities
f

or its clientele and its income flow establishes that it is a seasonal business. Because we conclude that Adelaide Shores does not qualify as a recreational establishment, we need not reach the issue of whether the business is seasonal. The A ct requires employers to pay employees at least one and one

- half times their regula r pay for hours worked in excess of 40 hours each week. 29 U.S.C. § 207(a). The Act contains numer ous exemptions, including an exemption for employees of amusement or recreational establishments

. See i d

. § 213(a)(3)

. Because the Act is remedial in nature, the recreational exemption is “construed narrowly , ” and the burden of proof rests with the employer seeking the exemption

. Alvarez Perez v. Sanford

- Orlando Kennel Club, Inc. , 515 F.3d 1150, 1156 (11 th Cir

. 2008)

. To obtain the exemption, the employer must establish that its

Case: 12-16434 Date Filed: 07/09/2013 Page: 5 of 116 establishment qualif ies as a recreational establishment and that the establishment is seasonal : The provisions of

. . . section 207 of this title shall not apply with respect to

. . . any employ ee employed by an establishment which is an amusement or recreational establishment

. . . if (A) it does not operate for more than seven months in any calendar year, or (B) during the preceding calendar year, its average receipts for any six months of such year were not more than 33 1/3 per centum of its average receipts for the other six months of such year

. . . . 29 U.S.C. § 213(a)(3). The Act does not de scribe the qualities of a “ recreational establishment, ” but the Department of Labor has issued an regulation interpret ing the term

. “ We defer to those regulations when the statutory language is ambiguous or the statutory terms are undefined. ” Josendis v. Wall to Wall Residence Repairs, Inc. , 662 F.3d 1292, 1299 (11 th Cir

. 2011)

. The regulation defi nes a “ r ecreational establishment”

a s an “e stablishment [] frequented by the public for its

. . . recreation.” 29 C.F.R. § 779.385. Consistent with the regulation, our precedents establish that the business of a recreational establishment is to provide amusement or entertainment for its

customers

. T his Court has held that a minor league baseball team provided the type of “recreational activity” t o qualif y it as an amusement or recreational establishment. Jeffrey v. Sarasota White Sox, In c. , 64 F.3d 590, 595 (11th Cir.

Case: 12-16434 Date Filed: 07/09/2013 Page: 6 of 117 1995). We also have r ecognized that a canine racetrack qualifies as an amusement or recreational establishment

. Alvarez Perez , 515 F.3d at 1156.
A recreational establishment must also sell recreation or entertainment as its “principal activity.” Although it is clear that a baseball team and a racetrack derive their income from the recreation that t hey provide, the issue is more complicated for a business that promotes , but does not sell , re creation al activities . W hen presented with that dilemma in Brennan v. Texas City Dike & Marina, Inc. , 492 F.2d 1115 (5th Cir. 1974), our predecessor court devised a “principal activity” test to determine whether a business qualifies as a recreational establishment. Id. at 1119. In Texas City , the Marina argued that it qualified as a recreational establishment because it supplied goods and services used “fo r recreational boating and fishing in and on the Gulf of Mexico,” but we conclu ded that selling goods used in those recreational activities was not enough. Id. at 1118

– 20. We determined from the legislative history of the exemption and the opinions of th e Wage and Hour Administrator that the exemption applied to businesses that were recreational enterprises, such as golf courses, amusement parks, carnivals, circuses, sports parks, pari

- mutuel racing parks, summer camps, sport boating, and fishing. Id. at 1118. B ut we found it difficult to determine whether the Marina qualified as a recreational enterprise because of the “variegated nature” of its business, which

Case: 12-16434 Date Filed: 07/09/2013 Page: 7 of 118 ranged from s elling boats , trailers , and convenience items to performing boat maintenance. I d. at 1119. We decided to classify the Marina based on “its principal activity” as determined by “major income source.” Id. at 1119. Because the Marina derived the majority of its income from “selling expensive recreational hardware” like boats and trai lers instead of providing recreation, we held that the Marina was “ineligible for [an] exemption as a . . . recreational establishment.” Id.
at 1120. The Wage and Hour Division of the Department of Labor has applied our

“ principal activity” test to determine if a business qualifies as a recreational establishment. Wage

- Hour Op. Letter, No. 39 (Oct. 12, 2006). Although we do not defer to opinions of the Wage and Hour Division as we do the regulations promulgated by the Department, the opini ons of the Division are “ entitled to respect

. . . to the extent that those interpretations have the power to persuade.” Christensen v. Harris Cnty

. , 529 U.S. 576, 587, 120 S. Ct. 1655, 166 3 (2000). And we find persuasive the opinion of the Division that a vacation cruise line was in the business of recreation. Wage

- Hour Op. Letter 39. The Division cited our decision
in Texas City and opined that the cruise line appear ed to qualify as a recreational establishment because the primary activity of its vessels involved entertaining
passengers . Id. The Division explained that , as long as the majority of the income

Case: 12-16434 Date Filed: 07/09/2013 Page: 8 of 119 was attributable to the “nature

- related and sight

- related aspects of the excursion[s] and entertainment” portion of the ticket sales instead of “food, drink, lodging, concessions, and gift s ,” the cruise line qualified as a recreational establishment. Id. And the source of the income mattered because t he Division di stinguish ed the cruise line from a “resort hotel,” id. , an entity that we have recognized d erives its income from selling the use of its premises, see Texas City , 492 F.2d at 1118 (stating that hotels and motels “[sold] the temporary use of their premises”). The Division a lso concluded in an earlier opinion letter that a dude ranch did not qualify as a recreational establishment. Wage

- Hour Op. Letter, No. 1276 ( May
6 , 1994 ). The Division mentioned that the dude ranch provided “vacation packages,” which “include[d] lodging at . . . [a] guest cabin[] or guest room[], all meals, and a wide variety of recreational activities” that were “held or originate[d] on the ranch’s premises.” Id. Despite its recreational activities , the Division likened the dude ranch to a “resort hotel” and opin ed that the dude ranch did not qualify as an amusement or recreational establishment. Id. Based on our precedent in Texas Ranch and the persuasive opinions of the
D ivision , we conclude that Adelaide Shores RV Resort does not qualify as a recreational establ ishment. The principal activity of Adelaide Shores is selling recreational vehicle lots and recreational vehicles. See Texas Marina , 492 F.2d at

Case: 12-16434 Date Filed: 07/09/2013 Page: 9 of 1110 1119. A delaide Shores promote s and even provide s some recreation al activities, but providing recreation is not its principal activity. T he majority of recreational activities at Adelaide Shores are organized and funded by the residents. Like a resort hotel, Adelaide Shores uses the community activities to entice retirees to visit and purchase a site for their recreational vehicle. The Falks argue that its clientele visit Adelaide Shores for its recreation and that necessarily makes the recreational vehicle park a recreational establishment , but w e disagree. Undoubtedly, retirees come to Adelaide Shores for recreation, but that does not transform the business itself into a recreational entity. Under t he Falks’ reasoning , an establishment that provides recreation , but is not in the business of recreation, like a store that sells pool supplies and toys, would qualify. To accept the Falks’ argument would “permit an exemption to swallow the FLSA.” Id. The district court did not err when it entered judgment in favor of Mann’s complaint for unpaid overtime com pensation. Adelaide Shores did not qualify as a recreational establishment because its principal activity, selling recreational vehicle s and leasing lots to house those vehicles, is not recreational in nature.
Because Adelaide Shores did not qualify for the exception to the overtime

Case: 12-16434 Date Filed: 07/09/2013 Page: 10 of 1111 compensation law, it had to compensate Mann for the time he worked beyond that required under the standard 40

- hour workweek

. IV. CONCLUSION
We AFFIRM the judgment in favor of Mann for unpaid overtime compensation.

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