Court Opinion

ID: 9491497
Source: CourtListenerOpinion
Date Created: 2023-08-05 14:15:44.152086+00
Date Added: 2024-06-11T17:54:46.774464
License: Public Domain

COLE, Circuit Judge,
concurring.
I agree with the majority’s well-reasoned conclusion that the district court did not err in deciding that the Cincinnati Reds baseball franchise does not qualify as a seasonal entertainment establishment under the FLSA, and is not, therefore, exempt from the statute pursuant to § 213(a)(3)(B). The majority correctly concludes that the clear and unambiguous language of § 213(a)(3)(B) requires us to look at a seasonal entertainment establishment’s receipts, and not its income or its accounting method, in determining whether the Reds falls within that exception. I write separately to express my disagreement with the majority’s characterization of the result in this ease being “illogical” and “counterin-tuitive.”
I believe that we are presented with a difficult question because Congress has provided us with so little guidance in § 213(a)(3)(B)’s legislative history. The majority correctly states that the FLSA is a broad remedial statute, and that its exemptions are to be narrowly construed. See Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392, 80 S.Ct. 453, 4 L.Ed.2d 393 (1960); Salyer v. Ohio Bureau of Workers’ Compensation, 83 F.3d 784, 786 (6th Cir.1996). Congress certainly must have known that nearly all businesses operate under the accrual method of accounting; thus, it likely would have chosen to use “income” rather than “receipts” if it had desired to create a broader exception for seasonal amusement establishments in § 213(a)(3)(B). For whatever reason, Congress, consciously decided to fore-go using terms such as “income when earned” or “receipts which accrue,” and instead, chose the word “receipts.” Therefore, I agree with the majority that the plain meaning of § 213(a)(3)(B)’s language requires us to analyze the Reds’ “receipts” in determining whether the Reds fall within § 213(a)(3)(B)’s exemption.
I respectfully disagree, however, that holding the Reds to this plain meaning interpretation of § 213(a)(3)(B) leads to an illogical or counterintuitive result. Although the accrual method of accounting more accurately matches up the Reds’ revenues with its expenses, I would find it problematic to insulate the Reds from the FLSA’s overtime requirements merely because it does not record its off-season revenue as income until its actual games are played from April through October. The majority emphasizes that the Reds keep season ticket revenues paid by its ticket holders in a separate bank account, and that the Reds must refund the money to the ticket holder if the game is not played (e.g., during a player strike). However, I have no doubt that the Reds receive substantial interest or similar revenue on those season ticket revenues while those funds are held in a separate bank account. Thus, I believe that it is quite logical that Congress chose not to exempt an organization like the Reds from paying an employee like Daisy S. Pearl an additional $2.75 per hour above her regular rate of $5.50 per hour for overtime hours, because the Reds clearly benefit financially by receiving significant amounts of its revenue in the off-season. Accordingly, the “receipts” test of § 213(a)(3)(B) does not need to be “corrected” or “perfected” by this court because I believe Congress meant what *833it said and said what it meant: a business operation like the Reds cannot insulate itself from the FLSA’s overtime requirements if it enjoys the benefit of receiving substantial amounts of revenue during the off-season months.