For my day job I work as an employment litigator. In my free time I am an age group endurance athlete (running and triathlons), a race director and a coach. Usually these two worlds don’t intersect too much (with a few notable exceptions such as when Lance Armstrong graced our federal courts with his presence). As an employment litigator I do quite a bit of work with federal and state wage and hour laws. These are the laws that say you have to get paid a minimum wage for hours worked and , depending on your job, you need to be paid overtime if you work over a certain number of hours. At the federal level the law is called the Fair Labor Standards Act — FLSA for short. I also spend a lot of time at races. Many of these races are owned and managed by volunteer organizations in which all proceeds go to charitable organizations. Under the FLSA people can volunteer for not-for-profit organizations without any issue (you can see guidance on volunteers for not-for-profit organizations here). Some races are owned and manged by for-profit corporations. While some of the profits from these races may go to charitable organizations, profits from these races also go to pad the bottom line of the corporations that own them (think Providence Equity Partners and the World Triathlon Corporation). Sitting at race recently, I began thinking about all the volunteers who make races possible. If the race is owned, managed and benefiting (at least to some extent) a for-profit company, are these volunteers actually employees who should be paid under the FLSA and state wage and hour laws?
To determine whether a person (whether its a volunteer, an intern or an employee) should be paid under the FLSA (for this post I’m just looking at the FLSA as state wage and hour laws vary greatly), courts look at the “totality of the circumstances” and weigh several factors. Here are the factors, which stem from a Supreme Court decision from 1947 called Rutherford Food Corp. v. McComb:
1. Does the person have an expectation of compensation
2. Who receives the immediate or primary benefit from the work being done?
3. Is the job being done integral to the business?
4. Is there coercion or pressure for the person to “volunteer”?
5. How long has the person been doing the activity in question?
6. Is the job being done similar to a job someone else is paid to do?
Looking at the typical long course triathlon (2.4 mile swim – 112 mile bike – 26.2 mile run) run by a for profit corporation (note this analysis could also apply to any race owned and manged by any for profit company) — should the people who volunteer for this company be paid under wage and hour laws? The answer (and this is such a lawyer answer) is it depends on the person and the job they are performing. Let’s take each factor in turn.
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 district court for the Southern District of New York ruled that there was evidence that 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.” This raises three potential problem areas for companies associated with long course triathlon. First, in many cases, volunteers are promised special benefits in exchange for volunteering. In particular at certain races volunteers are given priority access to registration for the following year. Essentially the volunteers are told if you want to guarantee a slot in next year’s race you need to volunteer. A question exists whether this priority access would be considered compensation. Second, long term volunteers with important positions are often “promoted” to full time paying positions. Like the leaders in the AOL case, a question exists as to whether a person must “volunteer” before being considered for a full time position with the for profit company. Finally volunteers at long course races are often paid indirectly through a donation to a charitable organization. The companies that run long course triathlons often make a 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. Based on these three problem areas, I think there’s a decent chance that a court would rule that volunteers at some long course races have an expectation of compensation.
Who receives the immediate / primary benefit of the work?
This one is a harder call. 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 long course triathlon without aid station volunteers, medical tent staff or course marshals. In this case I think it would be what courts call a “question of fact” as to whether the company or the volunteer receives the primary benefit of the work.
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 long course triathlon 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.
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, there are obviously no repercussions for not volunteering. This particular factor is more applicable to employees of a company who are asked to “volunteer” to do work for their regular employer. This factor doesn’t really apply to the long course triathlon situation.
How long has the person been doing the activity in question?
Here is another 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. As I previously noted many races have volunteer security personnel working side by side with paid security personnel. The same is true for medical staffing. It is also interesting that I have “volunteered” at race where certain positions, such as run course marshals, were paid.
Looking at the “totality of the circumstances” I think that volunteers in certain positions (security, medical staff, course marshals, aid stations, water safety to name a few) could bring a viable claim against for profit companies who own and manage long course triathlons. These actions would also not be single plaintiff actions but rather “collective actions” where one named plaintiff can represent entire groups of similarly situated volunteers who “opt-in.” Whether the volunteers would win at trial would very much depend on the facts of the specific case. The big question for me though is not whether a viable claim exists, but what can these for profit organizations do to protect themselves from possible claims (delegate management of the races to not for profit arms? have volunteers sign agreements making clear that they are volunteering for not for profit arms and not the for profit company? pay minimum wage to volunteers and allow the volunteers to donate those wages back to the charitable organizations that the race benefits?). I love long course triathlon and I want to see more companies get involved in creating new races. I don’t want to see these races burdened with potential liability under the FLSA, unfortunately wage and hour law can be unforgiving (case in point take a look at recent decisions concerning unpaid interns). In a lot of ways this appears to be a collective action waiting to happen.