Opinion ID: 158241
Heading Depth: 2
Heading Rank: 2

Heading: Amusement or Recreational Establishment

Text: 18 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. 19 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. 20 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 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. 21 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), reprinted in 1977 U.S.C.C.A.N. 3201, 3235. 22 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). 23 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 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). 24 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 25