The U.S. Court of Appeals for the Sixth Circuit sided with a church operating the Lord’s Buffet and against the Department of Labor (“DOL”) in a case testing the reach of the Fair Labor Standards Act (“FLSA”). In Acosta v. Cathedral Buffet, Inc., the appellate court reversed a trial court ruling and held that volunteers who staffed a church-operated buffet are not employees and the Grace Cathedral Church did not run afoul of the FLSA by failing to pay the volunteers minimum wage. The DOL claimed the church and its televangelist pastor illegally used unpaid labor by staffing its buffet with volunteers from the congregation. In this case, the church operated the buffet restaurant for a religious purpose: to allow church members to proselytize to patrons. Its operations relied heavily on church volunteers who worked alongside paid employees performing the same work. While the work performed was comparable to that of an employee, the Sixth Circuit held the DOL overstepped the bounds of the FLSA by applying it to the volunteer workforce. In part, the Court’s decision relied on a determination that the volunteers had no expectation of payment and were not economically reliant on the work of the church.
Savvy employer takeaways: Employers with charitable missions and those who support charities must be careful to delineate work from volunteer activities to avoid claims that the volunteers should have been paid for their activities.
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