Apparently if you are doing the Lord’s work and seek only treasures in heaven, the Fair Labor Standards Act will not guarantee that you receive an earthly reward as well. In a significant ruling that impacts religious organizations, the Sixth Circuit reversed a nearly $400,000 FLSA verdict based on the fact that the volunteers did not expect payment.
We previously described how Cathedral Buffet and Rev. Ernest Angley cast a wing and prayer to the Sixth Circuit to undo the district court’s verdict. In that order, the district court ruled in favor of the Department of Labor finding that unpaid volunteers were employees entitled to wages.
The Sixth Circuit, however, threw the reverend manna from heaven when it found the district court’s logic wanting. The volunteers at Cathedral Buffet did not expect to receive compensation – a threshold requirement for any FLSA claim — according to the appellate court. Although the common “economic realities” inquiry is used to analyze whether the person was an actual employee entitled to compensation, the court emphasized that binding law “plainly requires us to first ask whether Cathedral Buffet’s volunteers worked in ‘expectation of compensation.’ They did not.” The court went on to chronicle that the volunteers did not expect or receive any wages or in-kind benefits, and were not even allowed to accept tips. The district court had reached a different conclusion on the volunteers’ expectations.
The appellate court also found — in stark contrast to the district court — that there was not a sufficient showing of economic coercion by Cathedral Buffet to warrant FLSA protection. While circumstances can establish that an organization coerced a volunteer to not expect compensation, the court found that was not the case here as the “type of coercion with which the FLSA is concerned is economic in nature, not societal or spiritual.”
Religious and volunteer-based organizations should take special note, and evaluate what their volunteers/employees expect regarding being financially compensated. “[A]lthough the FLSA might aim to curb the societal ills caused by low wages, it does so through a comprehensive system of economic regulations. The Act does not go so far as to regulate when, where, and how a person may volunteer her time to her church. After all, the giving of one’s time and money through religious obligation is a common tenet of many faiths.”