Don’t ‚Volunteer‘ To Pay Your ‚Volunteers!‘

Art 10Joining unpaid interns, volunteers are the latest addition to the class of workers to seek unpaid wages – despite the fact that they possess no expectation of compensation at the time that they render services.  A potential class action lawsuit filed last month by a volunteer against Major League Baseball (“MLB”) in New York federal court – Chen v Major League Baseball– sets the stage for this latest battleground.

How Does the FLSA Treat “Volunteers?”

The federal Fair Labor Standards Act (“FLSA”) exempts individuals who volunteer to provide services, so long as:  (i) the individual does not receive, nor expect to receive, any compensation in consideration for his/her services (although the individual may collect paid expenses, reasonable benefits, or a nominal fee); (ii) the individual possesses a civic, charitable, or humanitarian purpose for providing the services; (iii) the services are provided without pressure or coercion; and (iv) the services rendered are not the same type of services rendered by the individual in his/her capacity as an employee of the same entity.

Although the term’s precise parameters remain somewhat blurred, the Department of Labor (“DOL”) has proclaimed that an individual may not render services on a volunteer basis to a for-profit institution.  Indeed, according to the DOL’s formulation, only “public agencies” may engage the services of a volunteer.

The Lawsuit Against MLB

For many years, the volunteer-related provisions of the FLSA, at least insofar as they concerned private, for-profit employers, have largely evaded the purview of judicial inquiry.  Not any more.

A complaint filed by named plaintiff John Chen against MLB seeks minimum wages and overtime compensation for a proposed class of potentially 2,000 volunteers who rendered services at MLB’s July 2013 All-Star FanFest events in and around New York City.  The volunteers, who were required to submit to a background check and attend a mandatory orientation session, were simply provided with event-related paraphernalia in consideration for their services.  According to Chen, this arrangement violated both the FLSA and the New York Labor Law, notwithstanding the parties’ prior mutual understanding that the volunteers would not receive financial compensation. 

What Does This Mean for My Company?

The MLB lawsuit serves as yet another reminder that the recent groundswell of litigation instigated by unpaid laborers has only just begun.  And given at least one court’s receptiveness to such claims where unpaid interns are concerned, it is exceedingly unlikely that unpaid laborers will, at any time in the near future, be deterred.  Indeed, the only inevitability in an otherwise uncertain area of wage-and-hour law is that the plaintiffs’ bar will continue to wage a full-scale war against the sustained use and viability of unpaid labor.  Employers should thus consult with counsel, if they have not already done so, to assess their potential exposure and to determine whether the use of unpaid labor – be it unpaid interns, volunteers, or some other iteration thereof – makes sound business sense.

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