CHARLES TOWN – A federal appeals court has ruled that three former employees of Charles Town Races and Slots are entitled to overtime pay because of the nature of their work.

The Fourth Circuit Court of Appeals opinion, released Thursday, overturned a district judge's ruling that the employees, who were racing officials at the track, held administrative-type positions and were therefore exempt from collecting overtime pay through the Federal Labor Standards Act.

John Desmond, Dana Witherspoon and M. Larry Sanders originally filed a federal lawsuit in Northern District Court against the racetrack after they were fired in 2006 for posting an incorrect order of how horses finished in a race.

The plaintiffs said they routinely worked in excess of 40 hours a week, but were never paid overtime wages.

The plaintiffs were considered "Racetrack Officials." According to the opinion, on non-race days, the plaintiffs assisted with clerical duties in the secretaries' office, which included keeping track of rider changes, putting together racing programs and completing racing entries.

On race days, the plaintiffs served as placing judges, paddock judges, horse identifiers and clerks of scales.

District Judge John Preston Bailey found in favor of the racetrack. Bailey finding that the plaintiffs' jobs were exempt from overtime pay because the jobs were critical to the racetrack's being able to do business legally and related to the general business operations of the track.

The plaintiffs appealed, saying Bailey incorrectly interpreted the relevant law. The federal appeals court agreed with the plaintiffs.

In the opinion, the appeals judges outlined the three part test required to meet the overtime exemption through the FLSA.

According to the act, an employee has to be paid a salary of at least $455 a week; have primary duties consisting of non-manual work directly related to management; and that the duties have to include the exercise of discretion and independent judgment.

The plaintiffs argued that their jobs didn't meet the latter two parts of the test.

The appeals judges ruled that the district court incorrectly found that the plaintiffs' jobs were exempt because they are required by law. The opinion said that the legal indispensability of an employee's job does not directly relate to being responsible for general business operations.

"That the position of Racing Official was 'indispensable' because of state law, rather than business practice, does not alter the analysis," the opinion says. "State or local law may also require a construction company to post a flagman around a highway work site … but no colorable argument can be made that the flagman's work is directly related to the construction company's general business operations."

The appeals judges said that the overtime exemption has to do with the type of work an employee performs, not whether the law requires the employee's position to exist.

The court noted that on race days, the plaintiffs' jobs were to observe and examine horses, jockeys and trainers and the relevant paperwork. The plaintiffs had no supervisory authority and did not participate in developing business policies or strategies, the court said.

The job of a Racing Official is more like working on a manufacturing production line or selling a product in a retail or service business, the court found.

The racetrack may still appeal this decision to the U.S. Supreme Court.

Paul B. Weiss represented the plaintiffs. Brian Michael Peterson and Charles F. Printz Jr. represented the racetrack.

Fourth Circuit Court of Appeals case number: 08-1216

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