United States: Second Circuit Court Of Appeals Addresses FLSA’s Public Agency Volunteer Exception, But Withholds Comment On Private Sector Volunteers

For the first time the Second Circuit Court of Appeals tackled the Fair Labor Standards Act's public agency volunteer exception. In Brown v. New York City Board of Education, the Court outlined the contours of the exception and affirmed a lower court decision finding that the individual at issue was a volunteer and not an employee entitled to minimum and overtime wages. This opinion however, does not alleviate the concerns of private sector employers susceptible to wage and hour class/collective action lawsuits by volunteers.

Background

Brown had "worked" around 40 hours a week for more than three years at Banana Kelly High School in the Bronx. Specifically, Brown performed various services, including lunchtime supervision, detention, parent contact and student escort services. He answered phones and handed out report cards and progress reports. Near the end of his stint he began mentoring students.

Brown acknowledged that he never had to submit "qualifications for employment" to the school, nor did any school official indicate that it would pay him for his services. Instead, he admitted that accepted the job to build his resume, become a better person and help the students. He did ask for a paid position on various occasions, but was rebuffed because of budget constraints and his lack of higher education degree. From time to time, the school's Principal and Director of Student Life gave Brown small amounts of cash (between $40-60), subway fare and paid for his meals. He was never disciplined in any way if he failed to show up to the school.

Brown eventually sued the NYS Department of Education claiming that it violated the FLSA when it failed to pay him for his services. The District Court dismissed the FLSA claim finding that under the "totality of the circumstances," Brown was a "volunteer" and not an "employee" as defined by the FLSA, and therefore he could not seek minimum or overtime wages. Brown appealed.

FLSA's Public Agency Volunteer Exception

The FLSA does not specifically define the term "volunteer." Instead, it says that the term "employee" does not include individuals who volunteer to perform service for a public agency where two conditions are satisfied:

  1. the individual does not receive compensation for his or her services and is not paid expenses, reasonable benefits or a nominal fee to perform services for which he or she volunteered; and
  2. the services the individual performs are not the same type of services the public agency employs the individual to perform.

The DOL, the agency that administers the FLSA, does affirmatively define "volunteer" in its interpreting regulations. Volunteer means a person that performs services for a public agency

  1. for a civic, charitable or humanitarian purpose,
  2. has not been promised or does not expect or receive compensation for the services rendered;
  3. performs such work freely and without pressure or coercion, direct or implied, from such employer; and
  4. is not otherwise employed by the public agency to perform the same type of services for which the individual volunteers.

The regulations also note that there is no restriction on the types of services that one can volunteer to perform. They also note that the agency can pay expenses, reasonable benefits and a nominal fee or any combination of those three without jeopardizing the individual's volunteer status so long as those payments are incidental to the volunteer services (i.e. to pay for the cost of meals or transportation and/or not tied to the individual's performance).

The Second Circuit Agrees with the District Court That Brown Was a Volunteer

The question on appeal of course was whether Brown qualified as a "volunteer" – not entitled to minimum wage and overtime, or as an "employee" – entitled to minimum wage and overtime.

The Court first held that this was a question of law for a court, not a jury, to decide, and its decision should be made based on the totality of the circumstances viewed most favorably to the individual. It then analyzed the DOL's volunteer definition's four factors. In doing so, it made several important holdings.

  1. An individual need not be solely motivated by civic, charitable or humanization purpose to volunteer; he or she can be motivated by other purposes as well (e.g. to build one's resume).
  2. The court must apply an objective not subjective reasonableness test to determine whether the individual expected compensation for his or her services.
  3. The court should look at the "economic realities" to determine whether the individual was promised, reasonably expected or received compensation. No specific "economic realities" test applies however; instead the court must identify, from the totality of the circumstances, the economic (and other) factors most relevant to resolving this issue.

The Second Circuit then went on to affirm the District Court's decision holding that the totality of the circumstances demonstrated that Brown qualified as a "volunteer" under the FLSA's public agency exception and that he was not entitled to minimum or overtime wages.

In reaching its decision, the Second Circuit noted that the public agency exception is a bit unique. FLSA's exemptions are typically to be construed narrowly against employers, but Congress did not want the volunteer exception to be construed in a way that would discourage people from volunteering; they only wanted it to be construed in a way that stopped employers from coercing individual to volunteer their services to avoid paying them. The Court kept that in mind throughout its analysis, which certainly helped the Department of Education here, and it should encourage other public agencies that utilize volunteers elsewhere.

But What About Volunteers for Private Employers?

Excellent question. The Court was quite clear that its opinion did not extend to private sector volunteers – an important distinction. The FLSA says nothing about private sector volunteers. Again, it's the DOL that offers guidance: individuals can volunteer: (1) for charitable and public purposes, usually on a part-time basis, at a religious, charitable, civic, humanitarian or similar non-profit organization, and (2) under certain circumstances when a for-profit employer asks an employee to do so for a charitable or civic purpose.

To "volunteer" at a non-profit means that the individual does so freely and without any expectation or receipt of compensation, and the individual cannot displace paid workers or perform work that would otherwise be performed by employees. In interpreting this standard, courts often look at whether the individual engaged in "ordinary volunteerism," which comprises the following factors:

  1. Does the individual volunteer at an organization that needs volunteer services? (i.e. a local soup kitchen)
  2. Does the individual volunteer his or her services on a part-time basis? (i.e. I volunteer there on Saturdays)
  3. Does the individual volunteer his or her services without any pressure or coercion? (i.e. I can skip any Saturday I want)
  4. Does the individual volunteer services that are typically associated with volunteer work? (i.e. I help prepare food at the soup kitchen)
  5. Does the individual displace other employees in order to volunteer? (i.e. no, I'm not doing the work they would have any employee perform) and
  6. Does the individual receive or expect any compensation from the non-profit? (no, I show up simply to help feed the hungry)

You cannot volunteer services to a for-profit employer, but as an employee of a for-profit employer, it may ask you to perform volunteer services as long as:

  1. the volunteer work is for civic or charitable purpose;
  2. the volunteer work occurs outside of your normal working hours;
  3. you can decline to participate without being penalized;
  4. you do not expect nor do you receive compensation for the volunteer work; and
  5. the volunteer services differ from your normal job duties.

For example, you're an accountant at a large accounting firm and your division head encourages, but does not require, your group to volunteer at the soup kitchen on an upcoming coming Saturday. In this situation, your employer does not have to pay you for the time you spend volunteering.

Problems typically arise when employers at non-profits require individuals to act more like employees than volunteers – for example, when they require an individual to show up forty hours per week to help with the charity's business functions (i.e. perform back office functions). And they arise at for-profits when they require employees to work on corporate-sponsored opportunities during working hours and subject them to discipline for failing to do so – for example, they require employees to help plan, execute and participate in a corporate-sponsored charity run. It is problems like these that may lead to the much feared wage and hour class/collective action lawsuit. Thus, employers should ensure that their efforts to promote volunteerism fall in line not only with FLSA's requirements, but also with other state laws that may define "volunteer" even more narrowly.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Michael S. Arnold
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Emails

From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.