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Developments In Penn National Case

Published: May 27, 2009 8:07 pm ET

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In a legal development that could have significance for all racetracks, Penn National Gaming’s Charles Town racetrack suffered a legal defeat at the hands of the U.S. Court of Appeals for the Fourth Circuit on April 30.

At issue in the case was whether four racing officials (a placing judge, paddock judge, horse identifier, and clerk of scales) were entitled to unpaid overtime compensation under the Fair Labor Standards Act (FLSA). The four, who had been terminated for gross violations of procedure in posting an incorrect order of finish, asserted in their suits
that they routinely worked in excess of 40 hours per work week but were not paid for the overtime part of that work as required by the FLSA.

The trial court granted summary judgment to Penn National, finding that the employees held “administrative positions and were therefore exempt employees” under the FLSA. The appeals court, however, found the positions held by racing officials entailed duties more akin to those performed “on a manufacturing production line or selling a product in a retail or service establishment.” In other words, it found them to be “production” employees, somewhat like television news “producers, directors, and assignment
editors” who produce a newscast.

It is not known at this time whether Penn National plans to appeal the decision.

As of today, Penn National has moved all racing office officials at Charles Town to hourly pay with clocking in and out.

(With files from HTA)

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