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Monday, September 28, 2015
 
Cheerleader Minimum-Wage Litigation Comes to the NBA

The professional sports industry has been hit with a number of minimum wage lawsuits in recent years. These cases have predominantly focused on the allegedly unlawful pay practices of teams in the NFL and MLB, with various categories of team employees filing suit against their employers for allegedly failing to comply with the minimum wage and overtime requirements of the Fair Labor Standards Act ("FLSA").

For example, in the last two years alone seven different lawsuits have been filed against the NFL and its teams by former cheerleaders who allege that they were paid much less than the federally guaranteed $7.25 minimum wage. Given the high-profile nature of these cheerleader lawsuits, some had speculated that similar litigation could soon be filed against teams in the NBA or NHL as well.

As predicted, just such a case was filed on Thursday, when a former cheerleader for the NBA's Milwaukee Bucks filed a lawsuit alleging that the team failed to pay her in accordance with federal and state minimum wage laws. In Herington v. Milwaukee Bucks, LLC, former Bucks cheerleader Lauren Herington contends that the team required its cheerleaders to spend upwards of 30 hours per week in mandatory practice and workout sessions, in addition to their game-day duties. Because these workout sessions (as well as mandatory salon visits) were unpaid, the complaint asserts that the Bucks not only failed to pay their cheerleaders the minimum wage, but often neglected to pay them overtime as well.

As was the case in the NFL and MLB minimum wage lawsuits, the Bucks are likely to assert in defense that the team is exempt from at least the federal minimum wage and overtime requirements under 29 U.S.C. ยง 213(a)(3), a statutory provision covering seasonal amusement and recreational establishments.  As I explained last year, under this exception any amusement or recreational establishment may pay its employees a sub-minimum wage (without overtime) so long as one of the following two conditions exist: either (A) the establishment does not operate for more than seven months in any calendar year, or (B) the establishment's revenue in its six lowest revenue months in the previous year was no more than 33 1/3% of its revenue received in its six highest revenue months (e.g., the business's receipts from April-September were at least three times greater than its receipts from October-March).

Because the Bucks were eliminated in the first round of the NBA playoffs this past spring, the team's entire 2014-15 pre-season, regular season, and post-season only cumulatively spanned seven months (from October through April). So the team is likely to argue that this qualifies it as a seasonal establishment under Section 213(a)(3)(A), and therefore that the team is not required to pay its cheerleaders in accordance with the FLSA.

As I noted last year, prior courts are split on the question of whether professional sports teams qualify for FLSA immunity under Section 213(a)(3), based on whether judges view a sports franchise's amusement-related operations as lasting only during the team's playing season or as running year round. However, as my co-author Charlotte Alexander and I conclude in our forthcoming U.C. Davis Law Review article "Gaming the System: The Exemption of Professional Sports Teams from the Fair Labor Standards Act," NBA teams can credibly contend that they qualify for the Section 213(a)(3) exemption in at least some portions of their operations given the existing statutory language and accompanying regulations. 

Nevertheless, despite this potential defense, it would not be surprising if the Bucks ultimately opt to settle the Herington suit. Indeed, several NFL teams confronting cheerleader lawsuits have elected to settle the claims even though they arguably have an even stronger argument for exempt status under Section 213(a)(3) given the shorter length of their playing season. Most notably, the Oakland Raiders agreed to pay its former cheerleaders $1.25 million to settle their minimum wage claims even though the U.S. Department of Labor had issued an opinion earlier that same year concluding that the team was not subject to the FLSA due to Section 213(a)(3).

At the same time, it also would not be surprising if the Herington suit motivates other NBA cheerleaders to file suit against their teams. In the NFL's case, five additional teams quickly faced their own cheerleader lawsuits within the span of just a few short months after the league's first case was filed. The NBA must now hope that its teams do not face a similar wave of cheerleader minimum-wage litigation.

At a minimum, though, the Herington lawsuit shows that the allegedly unlawful pay practices of professional sports teams will continue to remain a pressing issue for the sports industry for the foreseeable future.






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