After presenting at the Triathlon Business International Conference last month, I was asked to write a guest blog post on the topic of wage and hour law as it applies to race volunteers. Because I was word limited, I wanted to publish my full post here.
The case of Liebesman v. Competitor Group has raised the question of as to whether race day volunteers are “employees” for the purposes of the federal and state wage and hour laws. Right now the answer very much depends on who is organizing and managing the races. There is a distinction between “for profit” and “not for profit” races. If the race organization is not for profit, there is most likely no need to pay volunteers wages. If the race organization is for profit, it is likely that the race organization is legally obligated to pay wages.
Not For Profit Organizations
A not for profit organization may use volunteers at races without incurring liability under the FLSA so long as the volunteer is engaged in “ordinary voluntarism.” Ordinary voluntarism occurs when:
- The entity that receives the services from the volunteer is a not for profit;
• The activity is less than a full time occupation;
• The services are offered freely and without pressure or coercion;
• The services are typically associated with volunteer work;
• No regular employees have been displaced to accommodate the volunteer; and
• The worker does not receive or expect any benefit for the services provided.
A typical race day volunteer such as staffing aid stations, acting as course marshals, directing parking, working at registration, or handing out medals likely meets all of these criteria. While most race day volunteers at not for profit organizations meet these criteria there are still some best practices that should be followed including:
- Having written job descriptions for each paid position at the not for profit. Having these written job descriptions for paid position demonstrated that race day volunteers are not displacing paid employees or performing work not typically associated with a volunteer.
- Having volunteers sign a volunteer agreement stating that they are performing the services voluntarily for the benefit of the not for profit with no expectation of compensation. The agreement can be incorporated into the volunteer waiver so that the volunteer is only signing one document.
- Instructing employees and volunteer captions to NEVER coerce or strong arm a person to volunteer or continue to volunteer. For example if a person is a course marshal from 8 a.m. – 10 a.m. and the person who signed up for 10 a.m. – noon does not show up, you cannot coerce or strong arm the 8 a.m. – 10 a.m. volunteer to stay at the post.
- Be careful about providing perks or benefits to volunteers. Reimbursement for expenses or nominal perks such as a race shirt are fine but race directors must be careful about tying benefits to hours worked. For example of a race organization offers one free race entry is the volunteer works 4 hours and two free race entries is the volunteer works 8 hours, this may be seen as a substitute for compensation. The best course of action is to offer all volunteers the same fringe benefits regardless of number of hours worked.
Not for Profit organization also need to be careful about long term (as opposed to race day) volunteers. Even if the organization is a not for profit, if the activity is a full time occupation and the volunteer is displacing the need of the organization to hired a paid employee, that long term volunteer may be subject to the FLSA. Situations that involve such a long term volunteer should be evaluated on a case by case basis.
For Profit Organizations
While the FLSA includes a safe harbor for not for profit organizations, the same protections do not apply to for profit organizations. In fact, volunteers at for profit organizations are incredibly rare. To determine whether a race day volunteer should be paid under the FLSA we need to look at “totality of the circumstances” and weigh several factors including:
Does the “volunteer” have an expectation of compensation? At first glance it would appear that the answer is “No.” People who volunteer at long course triathlons don’t expect to be paid in cash. The tricky thing is that compensation is not always measured in cash. Back in 2006 there was a lawsuit between AOL and leaders of AOL’s various chat rooms called Hallissey v. America Online Inc. In that case the court ruled while AOL did not pay these leaders cash, the leaders were encouraged to volunteer in order to eventually score a full time position with AOL. In the words of the court “AOL [had] used its superior bargaining power to require a certain amount of ‘volunteering’ before an individual would be considered for a paid position.” Perks, such as a fast track to a paid position, can be considered compensation.
Who receives the immediate / primary benefit of the work? Many people volunteer for their own personal enjoyment, to help fellow athletes or to contribute to a sport they love. On the flip side while the volunteer may receive a personal benefit, these races would not exist without volunteers. Imagine a race without aid station volunteers, medical tent staff or course marshals.
Is the work integral to the business? I think the answer here is that in many cases volunteers are integral to the business of putting on races. While some volunteer positions may be more necessary than others (for example volunteers in a change tent and wet suit strippers are nice but not necessary, while aid station volunteers and course marshals are vital to the safety of participants). In addition, many races use volunteers for management positions such as “captains” of various areas and use volunteer security personnel side by side with paid third party security personnel. Without volunteers races could not happen making the work volunteers do integral to the business of putting on a race.
Is there coercion or pressure for the persons to “volunteer.” The answer here is likely no. While many companies use incentive programs to convince people to volunteer, in most instances there are obviously no repercussions for not volunteering.
How long has the person been doing the activity in question? It depends. Obviously someone who volunteers for a race once and then never again hasn’t been involved in the activity too long. On the other hand, there are many volunteers who volunteer in the same capacity (often a management type position) year after year. All three years I have raced Ironman Florida the massage captain (a volunteer) has been the same person. This type of repeat volunteering can lead to the existence of a long term relationship.
Is the job being done similar to a job someone else is paid to do? Again, it depends on the position the volunteer fills. Many races have volunteer security personnel working side by side with paid security personnel. The same is true for medical staffing and at times for course marshals. Looking at the “totality of the circumstances,” volunteers in certain positions (security, medical staff, course marshals, aid stations, water safety to name a few) are similar, if not the same, as jobs someone else is paid to do.
In addition to the previous factors there is also a safe harbor for “any employee employed by an establishment which is an amusement or recreational establishment . . . if . . . it does not operate for more than seven months in any calendar year” (this is the major defense relied on by Competitor Group). In the recent case of Chen v. Major League Baseball, the court determined that volunteers at Major League Baseball’s Fan Fest during the All Star Game were not employees for the purposes of the FLSA because “an individual s employed by the establishment at which he works, regardless of the enterprise that may operate or control the establishment.” Sound confusing? It is. Essentially the court concluded that while Major League Baseball was the overarching enterprise, the actual Fan Fest was a distinct establishment that was only open for a few days. They determined that the volunteers worked for the Fan Fest and that it didn’t matter that Major League Baseball ran the fan fest. This reasoning could also possibly apply to individual races owned and directed by a larger overarching company. This case is currently on appeal so it is unclear whether the amusement or recreational establishment exception would apply to endurance races.
For Profit Best Practices
- The absolute safest thing to do is to pay all volunteers minimum wage.
- Consider whether your organization can transition to a 501(c)(3). If you have an organization that races money for charities and/or promotes healthy lifestyles or fitness, you may qualify for 501(c)(3) status (a good example is the Hartford Marathon Foundation). Not for profit status, dramatically reduces the potential for wage and hour liability.
Other Thoughts on For Profits:
- Be up front with volunteers about the fact that the race directing company is for profit and how much of the proceeds (if any) go to charity.
- Have volunteers sign a volunteer agreement stating that they are performing the services voluntarily for the race directing / management company and that they are doing so for their own benefit. Also you should consider including an arbitration agreement and collective action waiver in the volunteer agreement. These clauses may prevent a volunteer from bringing a collective action in court, which will greatly reduce the cost of defending a potential lawsuit.
- If you pay some people in a certain type of job, make sure you pay all people with that type of job. For example you should not have both paid and volunteer security personnel or paid and volunteer medical personnel. This should also be consistent across races if you have multiple events.
- Instruct employees and volunteer captions to NEVER coerce or strong arm a person to volunteer or continue to volunteer. For example if a person is a course marshal from 8 a.m. – 10 a.m. and the person who signed up for 10 a.m. – noon does not show up, you cannot coerce or strong arm the 8 a.m. – 10 a.m. volunteer to stay at the post.
- Do not promise volunteers special benefits in exchange for volunteering. In particular, by offering volunteers priority access to registration for the following year, you may be opening your race up to the argument that priority access is a type of compensation.
- Do not require people to volunteer before offering them paid positions with the organizations. Like the leaders in the AOL case, if a person must “volunteer” before being considered for a full time position with the for profit company, this can again be considered compensation.
- Be careful about how you mange charitable donations. Many races make a charitable donation to local organization in exchange for providing a certain number of volunteers. While this is not cash in the pocket of the individual, it is a benefit that could be considered compensation.
Even if a race follows all of these suggestions, the potential for liability still exists. While the risk of a lawsuit may be small at this point in time, the costs of a lawsuit are enormous, especially for a smaller organization.