This past summer I wrote a blog post on whether volunteers at for profit races should be paid under federal and state wage and hour laws. My conclusion was that “[i]n a lot of ways this appears to be a collective action waiting to happen.” My prediction turned out to be correct. On September 23, 2014, Yvette Liebesman, a “volunteer” at St. Louis Rock ‘n’ Roll Half Marathon, filed a collective and class action in the Eastern District of Missouri against Competitor Group, the for profit corporation that owns and operates the Rock ‘n’ Roll marathon series (Liebesman v. Competitor Group Inc., E.D. Mo. 4:14-cv-01653-RLW).
The well drafted complaint alleges that Ms. Liebesman “volunteered” as a bicycle escort for the 2012 St. Louis Rock ‘n’ Roll Marathon. As a bicycle escort she was required to stay with her selected runner throughout the race and to report any problems and the progress of lead runners to race officials. She also alleges that as an escort she “provided a layer of safety to prevent pedestrians from crossing directly in front of runners.” Ms. Liebesman further alleges that while “volunteers” designate a charity for which they were volunteering, these charities paid Competitor Group for the privilege of being an official race charity and that Competitor Group “employs the Official Charities to create an impression in individuals who might provide it labor and the public that its events are not-for-profit and that it is a not-for-profit organization. Instead the Official Charities are both a revenue stream and a veneer for recruiting free labor for Defendant.” Ms. Liebesman claims that these practices violate both the Fair Labor Standards Act (“FLSA”) and various states’ minimum wage laws including Arizona, Colorado, Florida, Illinois, Missouri, Nevada, Oregon, Rhode Island, Washington and the District of Columbia.
Collective Action v. Class Action
Before we get into Ms. Liebesman’s complaint and what happens next, I need to note the difference between a collective action and a class action. Under the FLSA a plaintiff can bring a collective action. This is an “opt-in” lawsuit. What this means is that if the court conditionally certifies the proposed class (more on that later) then the plaintiff’s attorney will send out notice to all the prospective class members (in this case volunteers for Competitor Group over the past three years). In order to be part of the lawsuit, these volunteers will need to “opt-in” and send back a notice stating that they affirmatively want to participate in the lawsuit. If they don’t “opt-in” and send back the notice, they won’t be part of the class or the lawsuit. Conversely under state laws, a plaintiff can bring a class action. A class action is an “opt-out” lawsuit. What this means is that all volunteers are automatically part of the lawsuit unless they affirmatively “opt-out” of the lawsuit. When you bring both a collective and a class action in the same lawsuit (which is what Ms. Liebesman did here) its called a hybrid action. Courts often struggle with what to do with a hybrid action because of the conflict between how collective actions and class actions work.
What Happens Next?
Now that the complaint has been filed with the Eastern District of Missouri and served on Competitor Group what happens next? Well, initially, we wait. Competitor Group requested and was granted an extension of time to the respond to the Complaint meaning that they don’t need to respond until November 21, 2014. When it does come time for Competitor Group to respond, I think they will likely move to dismiss at least part of Ms. Liebesman complaint. There is an inherent tension between a class action and a collective action. When a plaintiff files a complaint in federal court (as is the case here) the court has original jurisdiction over the federal claims (alleged violations of the FLSA) and can, but is not required to, exercise supplemental jurisdiction over the state law claims. I think it is likely that Competitor Group will move to dismiss the state law claims, and ask the court to decline to exercise supplemental jurisdiction, based on the fact that the states in questions — Arizona, Colorado, Florida, Illinois, Missouri, Nevada, Oregon, Rhode Island, Washington and the District of Columbia — have incredibly diverse wage and hour laws, many of which require different standards of proof.
I think it is also very likely that Competitor Group will oppose the certification of a conditional class. In order to move forward as a collective action the plaintiff must show that she is “similarly situated” to all other potential members of the class (in this case all volunteers for Rock ‘n’ Roll events over the past three years). While the burden is not particularly difficult, Ms. Liebesman will need to show that all volunteers were subject to a common policy, plan or design, that stretched across the various volunteer positions and events and that she is representative of all those various volunteers. I think this is going to be a difficult burden for Ms. Liebesman. Competitor Group will likely stress the fact that each race is locally managed and that the specific needs and polices of each race not only vary by location but also vary from year to year and from position to position. They may also emphasize the differences between various volunteer positions and would argue that many of these positions are not integral to Competitor Group’s business (e.g. while its nice to have people handing out Mylar blankets in the finish chute, its not necessary to have them in order to run a race). I think this is where Ms. Liebesman’s case will ultimately be won or lost.
What Does This Mean for the Sport as a Whole?
While the Liebesman case has not gotten much publicity in the endurance sports media, it has the potential to have some pretty significant implications. If Competitor Group is successful on a motion to dismiss the state law claims and in its opposition to conditional certification, I think this particular case may go away. Even it does go away, it does not mean that another case with a different defendant, a smaller potential class or different representative plaintiff won’t pop up again in the very near future. When I was in law school I had a professor who used to sue tobacco companies “for the fun of it.” While he was unsuccessful several times, eventually he got a suit to stick that cost the tobacco industry billions of dollars. Like the tobacco cases, I don’t think this particular type of wage and hour case is going away any time soon. I think there is enough here for to try again and again and again if necessary. If Ms. Liebesman survives a motion to dismiss and gets conditional certification of a class (even if its not the original proposed class) I think we will quickly see a series of FLSA collective actions against for profit race directing / race management companies operating in the United States such as World Triathlon Corporation, Rev 3 and Challenge to name a few. These suits are not cheap to defend or settle because of the size of the potential classes, so this could have a major impact on these organizations. I think we also may see these organizations change how they operate in the near future. Liability for wage and hour claims only goes back two to three years, if they change their practices now they can prevent future liability.