Church Appeals $388K Award of Back Wages Owed to ‘Volunteers’ at Restaurant

The Fair Labor Standards Act provides protections for workers when it comes to minimum wage as well as overtime. The FLSA’s protections are wide-reaching and contain few exceptions. Nevertheless, a church attempted to evade the law by having its buffet restaurant staffed mostly by unpaid “volunteers.” The U.S. Department of Labor sued the church and obtained $388,000 in back-owed wages for the workers, reported. The victory for the Labor Department demonstrates that, even if you worked for a religious employer, and even if you perhaps “thought” you were a volunteer, you may still be entitled to wages. An experienced Tennessee wage-and-hour attorney can help you decide if you have a case.

In this litigation, the business was a restaurant run by a church. The restaurant was staffed by two groups of workers; one group was a collection of employees who received an hourly wage. The other was a group of “volunteers” who weren’t paid. Generally, the volunteers did the same work as the employees did. A majority of the workers staffing the buffet restaurant were volunteers, whom the church’s minister recruited to work in the unpaid positions.

Eventually, the Department of Labor took action against the restaurant on behalf of the unpaid workers. The FLSA’s minimum wage and overtime rules apply to a broad range of businesses and are generally difficult to escape. For example, even if a business classifies a worker as a “volunteer,” and even if that worker considers him-/herself to be a volunteer, that still doesn’t allow the business to avoid compliance with federal minimum wage and overtime rules. This is equally true if the business is a secular one or is something run by a religious organization.

One of the key court cases on this issue was a 1985 Supreme Court ruling, Tony and Susan Alamo Found. v. Sec’y of Labor. That decision stated that there was no exception to the minimum wage and overtime rules “for commercial activities conducted by religious or other nonprofit organizations.” This meant that even if workers were allegedly “volunteers” and working for a religious entity, the minimum wage and overtime laws applied to them if the jobs they were working were part of a commercial business.

Even though this buffet was allegedly “infused with a religious purpose,” which presumably amounted to serving meals as a means of expanding the outreach of the church’s religious mission and teachings, the restaurant still was something that competed with other “ordinary commercial enterprises,” according to a federal district judge who ruled in favor of the Labor Department. By paying wages below the federal minimums, the restaurant held an unfair advantage over its competitors, the trial court stated.

The court’s opinion reaffirms that the federal minimum wage and overtime rules have extremely wide-ranging coverage and contain only very narrow exceptions. The court in this case concluded that none of the exceptions applied and ordered the business to pay more than $380,000 in back-owed wages to the “volunteers.”

The employer has taken its case to the Sixth Circuit Court of Appeals. It argues that, although the restaurant was a commercial venture, it did not make a profit. Since it did not turn a profit, and it was supported and subsidized by a tax-exempt church, that meant that the Alamo Supreme Court ruling and the minimum wage and overtime rules didn’t apply to it, the restaurant also argues.

This case is a noteworthy one for Tennessee employers and employees. A win in the appeals court by the restaurant could potentially offer religiously affiliated businesses much greater latitude in how they operate and pay workers. A win by the Labor Department would reaffirm that workers working in a for-profit enterprise (even if the enterprise is affiliated with a religious entity and doing charitable work) are entitled to protection under the FLSA.

For answers, advice, and advocacy regarding your minimum wage case, contact the Tennessee wage-and-hour attorneys at Parks, Chesin & Walbert. Our attorneys have been working hard for many years to represent our clients, both employees and employers, when it comes to overtime and minimum wage issues. To speak with one of our lawyers about your case, call 404-873-8048.

More blog posts:

Georgia Employer Allowed to Keep Some of Employees’ Tips as Long as Employees Received Minimum Wage, Atlanta Employment Attorneys Blog, Sept. 14, 2016

U.S. Supreme Court Refuses to Hear Case, Meaning Home Health Workers Remain Entitled to Minimum Wage, Overtime Protections, Atlanta Employment Attorneys Blog, June 28, 2016

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