Employment & Labor Insider

If you're a religious organization in a fight with the U.S. Department of Labor over whether your volunteers are really "employees" under the Fair Labor Standards Act, then the Reverend Ernest Angley has just done you a big favor.

Watching the Reverend on TV used to be one of my guilty pleasures in the 1980s. Once you see this video from the beginning of his old show, you will understand why:

(Not a spiritual endorsement.)

Over the years I'd forgotten about him, but he's still going strong at age 96, and still has such thick, shiny, black hair - not a touch of gray! How does he do it?

Anyway, Rev. Angley's Grace Cathedral church in Akron, Ohio, operates a Cathedral Buffet. The buffet has a number of paid employees (or did, before the expense of the DOL lawsuit caused them to lose their jobs), as well as a number of unpaid volunteers from the church.

The Buffet is a money-loser and is apparently viewed as a ministry, in which Cathedral members "proselytize[d] among local residents who dined there."

The Reverend was a little zealous in recruiting volunteers to work at the Buffet. During church services, he'd tell them things like, "[e]very time you say no, you are closing the door on God." Even worse, he'd tell them that repeatedly refusing to volunteer was blasphemy "against the Holy Ghost," a sin that will not be forgiven in this world or the next.

(Seems a bit harsh for not volunteering at a church-run buffet, but what do I know?)

The DOL (during the Obama Administration) sued the Cathedral Buffet and Rev. Angley for failing to pay wages to these "coerced" volunteers and also for violating the FLSA's record keeping provisions. A federal judge in Ohio agreed with the DOL and found the defendants liable for just under $400K in back pay and liquidated damages. The district court judge also enjoined the defendants from trying to get the money back from the volunteer "employees" after they paid it.

The defendants appealed, and this week the U.S. Court of Appeals for the Sixth Circuit found in their favor, reversing the lower court decision. According to the Court, quoting from a Supreme Court decision, "[W]hen a religious organization undertakes a commercial endeavor, its workers are only covered under the FLSA if they 'engage in those activities in expectation of compensation.'"

The parties had already agreed that the volunteers didn't work at the Buffet "in expectation of compensation." Because there was no economic relationship at all between the Buffet and the volunteers (they weren't even allowed to accept tips), the DOL failed to satisfy the initial requirement of showing that there was an expectation of compensation.

Yeah, the DOL said, but Rev. Angley coerced these people into working for nothing. No, the Court said. "We agree that in some circumstances, a showing of coercion might be sufficient to overcome a volunteer's lack of expected compensation and bring her within the protections of the FLSA. But . . . [t]he type of coercion with which the FLSA is concerned is economic in nature, not societal or spiritual."

The Court continued, "The [FLSA] 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."

Nor could the DOL prevail because the use of unpaid volunteers at the Cathedral Buffet arguably gave it a competitive edge against other restaurants. According to the Court, lots of religious activities "compete," but

they are still exempted from FLSA coverage because the workers do not expect to receive an economic benefit in return for their service. A church van competes with a taxi service. A Catholic fish fry competes with a fast food restaurant. A volunteer homebuilding project competes with a construction company. . . . [W]hat matters is not the object of the enterprise, but instead the purpose of the worker."

Rev. Angley, you've still got it! (I never doubted for a second.)