Unpaid Volunteers are Not Employees for Purposes of Title VII, But Beware of Unpaid Interns and the FLSA
On May 30, 2013, in case of first impression, the Fifth Circuit held that an unpaid volunteer firefighter making a Title VII claim of sexual harassment is not an “employee” for purposes of the statute and therefore had no legal claim. Juino v. Livingston Parish First District No. 5., No. 12-30274, 2013 WL 2360116, at *7 (5th Cir., May 30, 2013).
In Juino, former volunteer firefighter, Rachel Juino, sued the Livingston Parish Fire Department, claiming she was subjected to sexual harassment during her tenure with the Department. The Department argued Juino was a volunteer, not an “employee” for purposes of Title VII and therefore could not bring a claim. Further, the Department argued that it was not an “employer” for Title VII purposes because while its membership roster had approximately 70 firefighters, only three were paid employees and therefore they lacked the threshold 15 employees for Title VII coverage.
The trial court agreed with the Department and entered judgment in its favor. On appeal, the Fifth Circuit had to determine the issue, for the first time in the Fifth Circuit, whether volunteers are employees for purposes of Title VII.
In determining whether Juino was an employee, the Court analyzed two different approaches considered by other Circuits for evaluating the employment relationship in the volunteer context--the threshold remuneration test and the incidents of employment relationship test. In the threshold remuneration test adopted by most of the courts addressing the issue, the plaintiff-volunteer must make a threshold showing that she received remuneration or some other significant indirect benefit before the court will analyze whether an employment relationship exists. Remuneration may consist of either compensation, such as salary or wages, or indirect benefits that are not merely incidental to the activity performed. The incident of employment test, adopted by two Circuits, treats remuneration as merely one factor in determining the overall employment relationship rather than the dispositive factor. The Fifth Circuit concluded that the threshold remuneration test was the proper test to apply. Under the threshold remuneration test, financial benefit is an essential condition to the existence of an employee/employer relationship. If the plaintiff cannot show he/she was paid or received any benefits for his/her service, he/she is not an employee for purposes of Title VII. On the other hand, if the plaintiff shows that he/she received some compensation or benefits, the court will analyze whether the volunteer qualifies as an employee under Title VII.
Using the remuneration test, the Court analyzed Juino’s engagement with the Department to determine whether she was an employee for purposes of Title VII. Juino received $2 per emergency call, life insurance, uniform and badge, and emergency response gear and training. During her engagement, Juino responded to 39 calls for a total monetary remuneration of $78. These benefits, the Court concluded, were merely incidental to her volunteer service for the District and unlike the significant indirect benefits received by volunteer firefighters in other reported cases where the volunteers were determined to be employees (e.g., disability pension, life insurance, death benefits, tax exemptions for unreimbursed business expenses, scholarships for dependents, reduced rates on commemorative license plates and limited medical benefits). The Court concluded that Juino’s indirect benefits were too insignificant to pass the threshold remuneration test and she was therefore not an employee for Title VII purposes.
The take away from the Juino decision is that unpaid volunteers are not covered by the protections of Title VII and will not be counted in determining “employer” coverage under the statute. Based on the logic of the Juino decision, unpaid interns are also not likely to be covered under Title VII. Likewise, unpaid volunteers and interns are unlikely to be covered under other employment-law statutes coverage to “employees”.
Caveat: Although unpaid volunteers and interns are not likely covered by Title VII, remember the Fair Labor Standards Act prohibits employees from volunteering services to for-profit private sector employers. In addition, the FLSA has specific rules for for-profit private sector employers who hire unpaid interns.
On June 11, 2013, a District Court in New York ruled that the plaintiffs who worked as interns in the movie Black Swan produced by Fox Searchlight Pictures, Inc., were employees and protected under the FLSA and NY state wage and hour law. The Court also conditionally certified all unpaid interns who worked on films produced by Fox Searchlight Pictures and its subsidiaries between 2008 and 2010 and were classified as unpaid interns instead of paid employees. These workers (who could be in the hundreds) are seeking the applicable minimum wage rate under state and federal law for all hours worked, overtime for the hours that they work over 40 in a workweek, reimbursement for the use of their personal cell phones and laptop computers on film production work, liquidated damages and attorneys’ fees. This decision is a warning to companies that labeling a person an intern will not relieve the company of its legal responsibilities. The case is Eric Glatt and Alexander Footman, et al., v. Fox Searchlight Pictures, Inc., No. 1:11-cv-06784 in the U.S. District Court, Southern District of New York. As the Summer approaches, make sure you understand and comply with the FLSA rules before agreeing to take on unpaid interns. See Summer Interns: Free Labor Could Cost Your Company.
For more information about unpaid interns and volunteers, or any other employment law related questions, please contact the head of GDHM’s Employment Law group, Susan Burton, at sburton@gdhm.com or 512.480.5738
Notice: We are providing this client alert as a commentary on current legal issues, and it should not be considered legal advice, which depends on the facts of each situation. Receipt of this client alert does not establish an attorney-client relationship. The listed attorneys and / or other attorneys may provide services in connection with a particular matter.
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