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In Mendel v. City of
Gibraltar, No. 12-1231, 2013 U.S. App. LEXIS 16922 (6th Cir. Aug 15, 2013),
the Sixth Circuit recently held, in a 2-1 decision, that a group of volunteer
firefighters who receive a substantial hourly wage for responding to calls
whenever they choose to do so, are “employees” within the meaning of the FLSA
and FMLA. In doing so, the Court
reversed the judgment of Judge Roberts of the United States District Court for
the Eastern District of Michigan, which had concluded that the firefighters
were “volunteers” for the purposes of the two statutes. Chief Judge Batchelder wrote the Sixth
Circuit opinion, in which Judge Merritt joined, and Judge Kethledge wrote a
separate dissenting opinion.
The terms “employ” and “employee” have the same definition
under both the FLSA and the FMLA. See
29 U.S.C. § 2611(3) (providing that for the purposes of the FMLA, the terms
“employ” and “employee” have the same meaning as given in 29 U.S.C. § 203(e)
and (g), the definitions section of the FLSA).
Thus, the Mendel decision
focused exclusively on the definition of those terms under the FLSA. In applying the Supreme Court’s “economic
reality” test set forth in Rutherford
Food Corp. v. McComb, 331 U.S. 722 (1947), and upon consideration of “the
‘striking breadth’ of the FLSA’s expansive definition of ‘employ’”, the Sixth
Circuit concluded that the firefighters “fall within the FLSA’s broad
definition of employee,” as they “are suffered or permitted to work… and they
even receive substantial wages for their work.”
The court considered a 1986 amendment to the FLSA’s
definition of “employee”, 29 U.S.C. § 203(e), which provides that individuals
who volunteer to perform services for a public agency are not “employees” for
the purposes of the statute. However,
that exception only applies where the worker in question “receives no
compensation or is paid expenses, reasonable benefits, or a nominal fee to
perform the services for which the individual volunteered.” Id.
Thus, the operative question was whether the monies paid to the
firefighters constituted “compensation”, or whether it was instead just a
“nominal fee”. As the Court noted in its
opinion with regard to this particular question:
The official regulations provide guidance
at this juncture. The regulations define ‘volunteer’ as
‘[a]n individual who performs hours of service for a public agency for civic,
charitable, or humanitarian reasons, without promise, expectation or receipt of
compensation for services rendered.’ 29 C.F.R. § 553.101(a); see also 29
C.F.R. § 553.104(a) (employing similar language). The regulations proceed to
recognize, ‘Volunteers may be paid expenses, reasonable benefits, a nominal
fee, or any combination thereof, for their service without losing their status
as volunteers.’ 29 C.F.R. § 553.106(a). The specific provision addressing nominal
fees provides, in part, ‘A nominal fee is not a substitute for compensation and
must not be tied to productivity. However, this does not preclude the payment
of a nominal amount on a 'per call' or similar basis to volunteer firefighters.’
29 C.F.R. § 553.106(e). Finally, the regulations caution,
‘Whether the furnishing of expenses, benefits, or fees would result in
individuals’ losing their status as volunteers under the FLSA can only be
determined by examining the total amount of payments made (expenses, benefits,
fees) in the context of the economic realities of the particular situation.’ 29
C.F.R. § 553.106(f).
Mendel, 2013 U.S.
App. LEXIS 16922 at *12-13.
In concluding that the monies paid to the firefighters was
compensation rather than a nominal fee, the Court noted that:
The firefighters do not receive ‘a nominal
amount on a 'per call' or similar basis.’ 29 C.F.R. § 553.106(e). Rather, they
render services with the promise, expectation, and receipt of substantial
compensation. See 29 C.F.R. §§ 553.101(a), 553.104(a). Each time a
firefighter responds to a call, he knows he will receive compensation at a
particular hourly rate—which happens to be substantially similar to the hourly
rates paid to full-time employed firefighters in some of the neighboring areas.
Essentially, the Gibraltar firefighters are paid a regular wage for whatever
time they choose to spend responding to calls. These substantial hourly wages
simply do not qualify as nominal fees.
Id. at *13.
The Court recognized the seemingly counter-intuitive
conclusion that so-called volunteer firefighters could be classified as
“employees” rather than as “volunteers”.
But, the Court chalked that result up to “[t]he fact that the FLSA’s
categories of ‘employee’ and ‘volunteer’ do not necessarily match the common
use of those terms or popular perception in general.” Id. at *17.
In his dissent, Judge Kethledge noted that the firefighters
had to perform a great number of tasks (152 hours of training, passing an
examination, and then completing an additional 73 hours of training each year)
for which they were not compensated, and that, taking only the annual training
into account, that amounted to the firefighters receiving “little more than
minimum wage.” Id. at *20. Judge Kethledge indicated that he would thus
hold that the firefighters are volunteers.
Further, Judge Kethledge noted that the FLSA defines “employ” in 29
U.S.C. § 203(g) to mean “to suffer or permit to work”, and that the Supreme
Court had defined “work” for those purposes, in Tenn. Coal, Iron, & R.R. Co. v. Muscoda Local No. 123, 321 U.S.
590, 598 (1944) as meaning “physical or mental exertion” that is “controlled or
required by the employer.” He reasoned
that here, the city “neither controls nor requires the firefighters’ efforts’,
as the firefighters generally worked without supervision, and were not required
to respond to fires at all if they chose not to. He concluded that “[p]ersons that need a
Family and Medical Leave Act are presumably persons who need leave not to show
up for work. That description does not
apply to the City of Gibraltar’s firefighters.
I respectfully dissent.”
In contrast to the Mendel
case, the Eleventh Circuit held last year, in a per curiam opinion in Freeman
v. Key Largo Volunteer Fire & Rescue Dep’t, Inc., 494 Fed. Appx. 940
(11th Cir. 2012), argued before Judges Hull, Martin, and Cox, that a volunteer
firefighter was a volunteer, rather than an employee, under the FLSA. As in Judge Kethledge’s dissenting opinion in
Mendel, the Eleventh Circuit based
its decision, in part, on a finding that the fire district in question did not
supervise the plaintiff, and did not set the plaintiff’s schedule. Freeman, 494 Fed. Appx. at 943. The Court also noted that (a) the fire
department / fire district contract made a clear distinction between volunteers
and employees; (b) volunteers were paid $5.00 per hour while employees were
paid between $16.83 and $20.04 per hour; (c) the most that the plaintiff
volunteer firefighter could earn in a month was $1,200 regardless of the number
of hours he spent at the fire station or the number of emergency calls he
responded to; (d) the fire department needed permission from the fire district
to hire paid employees; (e) the plaintiff’s schedule varied depending on his
availability; (f) the district did not mandate standard operating guidelines
for volunteer firefighters; (g) the plaintiff’s individual rate of pay was not
set by the fire department or fire district; and (h) besides W-2 forms, the
fire department did not provide any employment records to the plaintiff, and
the plaintiff did not allege that the fire district had any employment records
for him. Id. at 943-44. The Court concluded that based on the above
factors, “the economic reality is that Freeman is not an employee of the
Department or the District.”
Whether the Mendel
and Freeman cases represent a circuit
split on this issue, or whether they are instead distinguishable on their facts,
is not entirely clear. According to
Judge Kethledge’s view of the Mendel
case, both cases involved a lack of supervision, schedules which varied
according to the individual workers’ availabilities and which were not
controlled by the fire departments or districts, and pay which (at least when
considering time spent training and taking examinations without compensation in
the Mendel case) was near or below
minimum wage. However, the cases also
appear to differ factually in some respects.
At least with regard to the time spent actually responding to calls, and
excluding Judge Kethledge’s consideration of unpaid time spent training and
taking exams, the rate of pay in the Mendel
case was $15 per hour – three times the $5 per hour in the Freeman matter. And, the Freeman opinion speaks of a monthly cap
on volunteers’ earnings, while no such cap is discussed in either the Mendel majority opinion or dissent. Whether these and the other factual
differences between the two cases are sufficient to explain the difference in
the two holdings, one can only surmise.
This issue has also been litigated under state and local
statutes. See, e.g., City of Ft. Calhoun v. Collins, 500 N.W.2d 822,
826 (Neb. 1993) (a volunteer fire department is not an employer within the
meaning of the state fair employment practices act). And, the above cases certainly do not
represent the first time that similar issues have been litigated with regard to
volunteer firefighters. See, e.g., Bryson
v. Middlefield Volunteer Fire Dept., Inc., 656 F.3d 348 (6th Cir. 2011)
(reversing District Court’s holding that that plaintiff volunteer firefighter
had to receive “significant renumeraction” in order to be considered an
employee for the purposes of her Title VII claims, and holding that
compensation is only one of a number of factors that should be considered in
making that determination); Haavistola v.
Community Fire Co., 6 F.3d 211 (4th Cir. 1993) (holding that the issue of
whether a volunteer firefighter was an employee, for the purposes of her Title
VII sex discrimination claim, involved fact-intensive determinations on which
the trial court was not equipped to rule on the basis of a summary judgment
record alone). Indeed, these cases are
only part of the larger longstanding debate over the proper characterization of
workers as employees versus volunteers, whether certain workers can rightfully
be characterized as unpaid interns or externs, and the similar issue as to
whether workers should be categorized as employees as opposed to independent
contractors. For several of our firm’s prior
publications on those topics, see, e.g.:
- The Department of Labor’s Internship Test under the FLSA, available here;
- Misclassification of Employees as Independent Contractors, available here; and
- FLSA Developments: Missclassification as Independent Contractors, Unpaid Interns, the Status of DOL Opinion Letters, and the Meaning of Clothes Under Section 3(o), available here.
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