Sixth Circuit Reverses FLSA Holding on Church Volunteers

by BakerHostetler


Ernest Angley is an evangelist and purported faith healer who operates a large church in Akron known as Grace Cathedral. It would be difficult to parody him, as his appearance, mannerisms and method of faith healing are already almost over the top. He has his own TV show (and network), and you can find lots of clips of him on YouTube if you are so inclined. He also has a large and dedicated following.

Grace Cathedral operated a buffet restaurant whose 35-member paid staff was augmented by volunteers. The church operated and supported the buffet to assist in its efforts to proselytize its patrons. To encourage church members to volunteer, Angley would make announcements from the pulpit to the effect that God was calling them to volunteer and that not doing so was “closing the door on God” and saying no risked “blaspheming the Holy Ghost.” Managers from the buffet and Angley himself would call church members at home to ask them to volunteer.

Whatever might be said about these methods, they worked, and many church members did volunteer, agreeing to work at the buffet without compensation. The Department of Labor (DOL) concluded that these workers were not truly volunteers and brought suit against Angley and Grace Cathedral for unpaid wages. Applying an “economic realities” test and finding Angley’s methods coercive, the district court found that the volunteers were, in fact, employees, and it awarded nearly $200,000 in back pay and an equal amount in liquidated damages.

The Sixth Circuit reversed. Acosta v. Cathedral Buffet, Case No. 17-3427 (6th Cir. Apr. 16, 2018). It found that the threshold inquiry was whether the workers had an expectation of compensation. As they did not, they were volunteers under the statute. The court did recognize that economic coercion might defeat volunteer status, but it said that what was in essence spiritual “coercion” did not, nor would societal pressure.

A scathing concurrence noted that the buffet’s purpose had been to encourage proselytizing the patrons who dined there and that the church subsidized it to the tune of $250,000 per year to accomplish that purpose. It also noted that the 35 paid workers all lost their jobs as a result of the lawsuit. While it agreed that Angley’s exhortations to volunteer were “in poor taste,” it found that the DOL improperly targeted the church for its religious beliefs rather than for a violation of the statute.

People volunteer to work at nonprofits, including churches, for any number of reasons. Among many others, a person may volunteer out of a sense of duty, societal pressure, peer pressure, a self-interested desire to network, the Bible, the Koran or – as in this case – the use of guilt by a pastor. One can only imagine the chaos that would result if the DOL or courts could inquire into each person’s motive for volunteering time at charities, schools, camps, arts organizations, hospitals, churches, synagogues or mosques. The court in Grace Cathedral rightly rejected a verdict against an easy target that could easily thwart volunteerism at other nonprofits nationwide.

The bottom line: The key to whether a volunteer at a nonprofit organization is an employee is whether he or she has an expectation of compensation, not why the person volunteered in the first place.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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