Court Opinion

ID: 9479167
Source: CourtListenerOpinion
Date Created: 2023-08-05 07:10:38.04223+00
Date Added: 2024-06-11T17:46:52.285943
License: Public Domain

WILKINS, Circuit Judge,
dissenting:
The majority characterizes the “proper legal inquiry [as] whether Ensley or the new workers principally benefited from the weeklong orientation arrangement.” However, the true legal issue is whether the trainees were “employees” within the definition of 29 U.S.C.A. §§ 203(e)(1), 203(g) (West 1978 & Supp.1989). The district court, in concluding that Ensley’s trainees were not employees, applied the correct legal test and based its holding on factual findings that are not clearly erroneous. I would therefore affirm.
I.
The term “employee” is defined in the Fair Labor Standards Act as “any individual employed by an employer.” 29 U.S.C.A. § 203(e)(1). The term “ ‘[e]mploy’ includes to suffer or permit to work.” 29 U.S.C.A. § 203(g). While the Act neither defines “trainees” nor specifically provides that trainees are not employees for minimum wage purposes, the Supreme Court in Walling v. Portland Terminal Co., 330 U.S. 148, 67 S.Ct. 639, 91 L.Ed. 809 (1947), held that trainees are not employees under the Act during their training period.
In Portland Terminal the training period for railroad brakemen was seven to eight days and was conducted by regular yard crew employees on actual rail lines. The trainees learned first by observation and then by doing “actual work under close scrutiny.” Id. at 149, 67 S.Ct. 640. The trainees did not displace any regular employees while working because the regular employees were required to closely supervise the trainees. The trainees’ work did not “expedite the company business, but *1211... sometimes ... actually impede[d]” it. Id. at 150, 67 S.Ct. at 640. Thus the railroads “receive[d] no ‘immediate advantage’ from any work done by the trainees.” Id. at 153, 67 S.Ct. at 642. Trainees who successfully completed the training were eligible to be hired, and those not immediately hired were contacted when positions became available. There was no evidence regarding whether the railroad paid, or the trainees expected, any wages for the training period beyond a $4.00 per day allowance. On these unchallenged facts the Court held that the trainees did not fall within the legal category of “employee” during their training period.
Following Portland Terminal the Wage and Hour Division of the Department of Labor promulgated a six-part test to guide its determination of whether trainees are in fact employees. The six enumerated factors in the Wage and Hour test are whether:
(1) the training, even though it includes actual operation of the facilities of the employer, is similar to that which would be given in a vocational school;
(2) the training is for the benefit of the trainees;
(3) the trainees do not displace regular employees, but work under close observation;
(4) the employer that provides the training derives no immediate advantage from the activities of the trainees and on occasion his operations may actually be impeded;
(5) the trainees are not necessarily entitled to a job at the completion of the training period; and,
(6) the employer and the trainees understand that the trainees are not entitled to wages for the time spent in training.
Donovan v. American Airlines, Inc., 686 F.2d 267, 273 n. 7 (5th Cir.1982). See Wage & Hour Manual (BNA) 91:416 (1975). These factors are not exhaustive and are intended to be consistent with Portland Terminal and the companion case of Walling v. Nashville, Chattanooga & St. Louis Ry., 330 U.S. 158, 67 S.Ct. 644, 91 L.Ed. 816 (1947). Wage & Hour Opinion WH-229 (June 29, 1973), reprinted in Wage & Hour Manual (BNA) 91:451-52 (1975).
Under both Portland Terminal and the Wage and Hour six-part test, the findings a court must make before reaching the legal question of whether trainees are employees are virtually identical. Neither approach relies exclusively on a single factor, but instead requires consideration of all the circumstances. The Wage and Hour test is therefore a reasonable application of the Fair Labor Standards Act and Portland Terminal and entitled to deference by this court. Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-45, 104 S.Ct. 2778, 2781-83, 81 L.Ed.2d 694 (1984).
II.
Addressing the legal issue of whether trainees are employees during a training period, the Donovan court stated:
The standard of review of the district court’s decision is that of a legal, and not a factual, determination. Thus, although we are bound by the clearly erroneous standard in reviewing the individual findings of fact leading to the district court’s conclusions, we review the determination that the [trainees] were not employees as we review any determination of law.
686 F.2d at 270 n. 4. See Patel v. Wargo, 803 F.2d 632, 634 (11th Cir.1986); Beliz v. W. H. McLeod & Sons Packing Co., 765 F.2d 1317, 1327 (5th Cir.1985). In Donovan the court affirmed a district court resolution of the ultimate legal question that airline flight attendant trainees were not employees during their training period. 686 F.2d at 271. Before reaching the legal issue, the court reviewed, among other factors, the district court analysis of “the ‘relative benefits flowing to trainee and company during the training period,’ ” id. at 271, and concluded that “the district court’s finding that trainees gain the great*1212er benefit from their experience is fully supported by the evidence.” Id. at 272.
III.
The district court based its conclusion that Ensley’s trainees were not employees on findings of fact covering all the factors considered in Portland Terminal and all six parts of the Wage and Hour test. Regarding Ensley’s training program, the district court found the following facts:
(1) [i]t could be training that they could get in schools [and] would be fine training for any outside salesman;
(2) all of it was for the benefit of the trainee or the student, that the employer received no benefits directly from it;
(3) [the trainees] didn’t replace any employee ... [b]ut worked under [the] close observation of the other employees;
(4) [Ensley] derives no immediate advantage from the activities of the trainees or students and on occasion the operations may actually be impeded;
(5) [the trainees, at the end of training,] wouldn’t necessarily have a job. If they liked it and it turned out, they would get a job but if they didn’t they wouldn’t; [and]
(6) [e]very single one of [the trainees] said they were told they were not entitled to wages [during the training].
All of these factual findings are fully supported by evidence in the record, and are not clearly erroneous. Anderson v. City of Bessemer City, 470 U.S. 564, 573-76, 105 S.Ct. 1504, 1511-12, 84 L.Ed.2d, 518 (1985). And since “the facts found by the District Court ... permitted the District Court’s legal conclusion,” Amadeo v. Zant, 486 U.S. 214, -, 108 S.Ct. 1771, 1776, 100 L.Ed.2d 249, 260 (1988), the district court judgment should be affirmed.
Rather than determining whether any of the district court factual findings are clearly erroneous before reaching the legal issue of whether the trainees were employees, the majority opinion focuses its inquiry on one of the underlying factors and re-characterizes it as the “proper legal inquiry” in the case. The determination of whether Ensley or the trainees principally benefited from the training program is but one factor to be considered in determining the legal question of whether Ensley’s trainees were employees.
The majority’s characterization of the training accomplished during the week ignores those attributes upon which the district court based its findings. While the trainees no doubt carried boxes and helped to load and unload trucks, the evidence presented supports the district court’s findings that the trainees learned job-related skills, fundamental skills necessary to successfully perform the job of routeman in Ensley’s company. In addition to vending machine maintenance and truck driving, the evidence shows that the trainees generally learned how to interact with store managers,3 complete some of the paperwork necessary to process orders, read and understand a routebook, handle money and address credit and billing problems, and comply with Ensley’s warehouse and delivery truck inventory control procedures. After the training period was over and employment began, a new routeman was taught other more technical job skills.
The majority minimizes the importance of the skills taught during the training period, finding that the trainees learned to perform only “basic” vending machine maintenance and “simple kinds” of paperwork, and cites the brevity of the five-day training period as support for its finding that no meaningful training occurred. The average training period in Portland Terminal spanned a comparable seven or eight days. The fact that Ensley required only five days of training in the basic skills necessary to begin this job underscores the reasonableness of the training period. See *1213Tony & Susan Alamo Found. v. Secretary of Labor, 471 U.S. 290, 301, 105 S.Ct. 1953, 1961, 85 L.Ed.2d 278 (1985).
The majority emphasizes that the skills taught were specific to Ensley’s operation or otherwise too general, either extreme producing “practically no transferable usefulness.” This factor is of little significance. In Donovan, the district court found that American Airlines taught its trainees the skills necessary to perform jobs in its organization, and required applicants to complete the training regardless of prior experience in the airline industry. While some of the skills taught were no doubt transferable, American intended to teach its trainees “American’s, and only American’s,” internal procedures, practices, grooming requirements, and “ ‘style.’ ” 686 F.2d at 269. The court held that while the training was “made more effective and less expensive by ... devoting it entirely to American’s policies, [this did not] mean that trainees [were] working while receiving this instruction.” Id. at 272. It makes no difference that Ensley chose not to teach more generally useful skills and that Ensley’s program was “without cost to himself.”
The majority alludes that Ensley “received the benefit of aid to his regular employees,” but it fails to identify this alleged benefit. Since the snacks were sold from store shelves and vending machines, extra hands would not create any net increase in actual sales. There is no allegation that Ensley was able to reduce the number of trucks necessary to serve the area by requiring trainees to assist the drivers, so Ensley’s delivery costs were in no way reduced. And since the drivers worked on a commission-based compensation plan and made deliveries to a set number of locations each day, any reduction in a driver’s delivery time would not reduce Ensley’s compensation costs to the route-man. In short, the district court did not clearly err in finding that Ensley received no immediate financial benefit from any assistance the trainees might have given to the supervising routemen during the training period.
Ensley did, of course, “benefit” from the training in that he was able to hire, at the end of the training period, a new routeman who was minimally qualified for the job. This “benefit,” however, is present in every training-period case. For example, in Donovan the court held that “[although training benefits American by providing it with suitable personnel, the trainees attend [the training] for their own benefit, to qualify for employment they could not otherwise obtain.” 686 F.2d at 272. Thus the training of prospective employees does not, by itself, constitute an “ ‘immediate advantage’ ” to the employer. Portland Terminal, 330 U.S. at 153, 67 S.Ct. at 642.
IV.
Finally, the majority’s conclusion that Ensley’s trainees are employees during the training period contravenes the policies underlying the trainee exclusion from the minimum wage law. The short term result of this contravention of policies produces a windfall to the small number of employees who have already completed Ensley’s training program, and who had availed themselves of the training with no expectation of compensation. However, in the long term the majority’s decision will tend to make it more difficult for young and/or unskilled persons seeking employment opportunities beyond that of an unskilled laborer to find employment.
Addressing the policies which support the statutory allowance of a sub-minimum wage for trainees, paid pursuant to special certifications issued under 29 U.S.C.A. § 214(1) (West 1965 & Supp.1989), the Supreme Court has said:
Many persons ... have so little experience in particular vocations that they are unable to get and hold jobs at standard wages. Consequently, to impose a minimum wage as to them might deprive them of all opportunity to secure work, thereby defeating one of the Act’s pur*1214poses, which was to increase opportunities for gainful employment.
Portland Terminal, 330 U.S. at 151, 67 S.Ct. at 641.
Ensley’s trainees knew they would receive no compensation for the five days spent learning the rudiments of the job of routeman. Nonetheless they agreed to the arrangement, no doubt rationally concluding that the week of training was a suitable investment in their own future. Some had second thoughts after a few days of training, for the record shows that some trainees quit before the five days were completed. These individuals undoubtedly concluded that the investment was not worth it for them, most likely because the nature of the job for which they were training was not to their liking.
While Ensley might have chosen to pay his trainees in order to attract more skilled applicants, he opted for applicants who agreed to volunteer for a week of training with no compensation. The applicants volunteered for the training in order to obtain jobs they were seriously considering. As the Fifth Circuit has stated:
We are aware that many companies hire persons as employees and then pay them while they attend company schools. These employers are governed ... by the demands of the market place [sic] and by their own specialized needs. The FLSA does not require [all employers] to follow this course.
Donovan, 686 F.2d at 272.
I respectfully dissent.

. The trainees did not necessarily take over the route on which they trained, so while meeting the store managers may be considered mere orientation, learning how to interact with a manager was the relevant skill taught.