Sixth Circuit Dismisses Title VII and §1983 Claims Brought by Volunteer Nuns

On Friday, the Sixth Circuit Court of Appeals dismissed for lack of subject matter jurisdiction Title VII religious discrimination and retaliation claims brought by two nuns who volunteered with the Red Cross and the Ross County Emergency Management Agency.   Sister Michael Marie v. American Red Cross, No. 13-4052 (6^th Cir. 11-14-14).  Similar constitutional and first amendment claims against the agency were likewise dismissed. The plaintiffs both volunteered with the Red Cross and county agency.  They alleged that the Red Cross denied them promotions to volunteer positions with higher authority and responsibility on account of their religion and terminated them in retaliation for complaining.  They allege that they were later terminated by the county agency for similar reasons and that the Red Cross Executive Director served on the Board of the agency.  They filed with the OCRC and EEOC Charges of Discrimination, which were dismissed for lack of jurisdiction since the nuns volunteered with the respondents and were not employees.  Neither plaintiff received or expected any monetary compensation for their services and did not receive any employment benefits, but were eligible for workers compensation, life insurance and travel reimbursement.  They filed suit in federal court, which dismissed the claims and was affirmed on appeal.

The Court of Appeals determined that coverage under Title VII is limited to common law employees, which depends on a number of factors, such as:

[1] the hiring party’s right to control the manner and means by which the product is accomplished. Among the other factors relevant to this inquiry are [2] the skill required; [3] the source of the instrumentalities and tools; [4] the location of the work; [5] the duration of the relationship between the parties; [6] whether the hiring party has the right to assign additional projects to the hired party; [7] the extent of the hired party’s discretion over when and how long to work; [8] the method of payment; [9] the hired party’s role in hiring and paying assistants; [10] whether the work is part of the regular business of the hiring party; [11] whether the hiring party is in business; [12] the provision of employee benefits; [13] and the tax treatment of the hired party.

While this test is most frequently utilized to determine whether an individual is an employee or independent contractor, it can also be applied to determine whether a volunteer is a covered employee.  Unlike other circuits, the Sixth Circuit considers compensation to be just one of the relevant factors, instead of categorically more important.  The Court rejected the plaintiff’s argument that it should be of lesser importance. After noting that the plaintiffs received no compensation or employment benefits, it also noted that they largely controlled when they volunteered and how they performed.  The plaintiffs were in no way economically dependent on the defendants.  The only factors in their favor was that the plaintiffs had worked for the defendants for several years and performed services in the defendants’ core business. Nonetheless, it was debatable whether the nature of their services was like that typically performed by employees or independent contractors.

The Court also found that the plaintiffs did not show that they were retaliated against on the basis of their religious beliefs.  The agency’s executive director had been initially friendly with them, which meant that another factor must have arisen when his behavior allegedly changed years later.  The Court also concluded that they could not show denial of equal protection because they failed to identify any other volunteers who were treated differently in that they were the only two volunteers who criticized the agency’s management.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Divided Sixth Circuit Counts Paid Volunteer Firefighters as Employees for Purpose of FMLA Coverage

Last week, the Sixth Circuit reversed summary judgment for a city employer on an FMLA claim on the grounds that the employer had the requisite 50 employees if paid volunteer firefighters were counted as employees of the employer. Mendel v. City of Gilbralter, No. 12-1231 (6^th Cir. 8-15-13). In that case, the plaintiff claimed that his termination violated the FMLA. The employer defended on the grounds that it was not subject to the FMLA, having only 41 employees instead of the requisite 50. However, the plaintiff pointed out that the defendant city would have more than 50 employees if volunteer firefighters were considered. The firefighters were responsible for their own training, were never required to respond to any fire or other emergency, were not provided with any employee benefits and were treated as independent contractors. Nonetheless, they were paid $15/hour when they did respond, which was comparable to the wage paid regular firefighters in surrounding communities and their own fire chief. The Court's majority found that the firefighters fit within the FLSA's definition of employees and not within the definition of "volunteer" because they were paid a substantial amount. Accordingly, the defendant city was subject to the FMLA. The dissenting judge concluded that the choice was not limited to employee or volunteer and that the firefighters could qualify as independent contractors, which would place the defendant city below the FMLA's 50-employee threshold.

According to the Court's opinion, the FMLA borrows its definition of "employee" from the Fair Labor Standards Act. The FLSA defines "employee" as "to suffer or permit to work." 29 U.S.C. § 203(g). This broad definition encompasses individuals who might not qualify as an employee under common law principles. Nonetheless, courts typically apply the "economic realities test" in determining whether an individual is an employee under the FLSA. In this case, the Court's majority concluded that the firefighters were employees because they were suffered or permitted to work and were paid a substantial wage for their efforts.

The majority also considered the FLSA amendment for volunteers, which provides at 29 U.S.C. §203(e) in relevant part that:

The term "employee" does not include any individual who volunteers to perform services for a public agency which is a State, a political subdivision of a State, or an interstate governmental agency, if—

(i) the individual receives no compensation or is paid expenses, reasonable benefits, or a nominal fee to perform the services for which the individual volunteered; and

(ii) such services are not the same type of services which the individual is employed to perform for such public agency.

The Court's majority concluded that the $15/hour paid to volunteer firefightes was more than a nominal fee because it was comparable to the wages paid to regularly employed firefighters. "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." 
 

Notably, the Supreme Court has held that those who "work in contemplation of compensation" are "employees" within the meaning of the FLSA, even though they may view themselves as "volunteers." Tony & Susan Alamo Found., 471 U.S. at 300–02, 306. Despite the fact that the Gibraltar firefighters are referred to as "volunteers," the inescapable fact nevertheless remains that they "work in contemplation of compensation." Thus, the Gibraltar firefighters are "employees" and not "volunteers" within the meaning of the FLSA.

The dissenting judge found the majority's analysis to be too narrow:

Volunteer status precludes employee status under the Leave Act; but that someone is not a volunteer does not necessarily mean they are an employee. Some types of workers fall into neither category, such as independent contractors, prisoners, and residential assistants in college dorms.

The dissent also found the $15/hour to be nominal in light of all of the unpaid training the firefighters must complete each year to maintain their certification. When those unpaid hours are considered, the average wage drops to less than $9/hour. 
 
Moreover, the city did not control their work, as required to fit within the FLSA definition:

The first firefighter to respond to a fire typically controls the scene; the City does not send anyone to supervise them. And the City does not require a firefighter to respond to any fires in the first place. Indeed a firefighter could go for years without responding to a single fire—and the City would not discipline him. . . . Persons 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.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Sixth Circuit: Volunteer Firefighters Can Be Title VII Employees

Earlier this month, the Sixth Circuit reversed a summary judgment which had been entered in favor of a volunteer fire department in Ohio. Bryson v. Middlefield Volunteer Fire Department, No. 10-3055 (6th Cir. 9/2/11). In that case, the plaintiff served as a volunteer firefighter and then was also hired as the department’s administrative assistant. She alleged that the former fire chief sexually harassed her and then constructively discharged her in retaliation for her complaints. She filed a Charge of Discrimination with the EEOC and OCRC, which found probable cause of harassment, but not retaliation. She then filed suit and the department moved for summary judgment on the basis that it did not employ 15 employees as required by Title VII. In particular, it denied that the volunteer firefighters were employees under Title VII. Although the firefighters were provided with insurance coverage and gift certificates, were covered by workers compensation and were provided with other benefits (such as access to department facilities and training, etc.), the trial court agreed that the renumeration received by the firefighters was not substantial enough to convert them from non-covered volunteers to covered employees. The Sixth Circuit reversed.

The Sixth Circuit concluded that whether an individual was covered by Title VII was governed by the common law of agency. The amount and type of compensation received by the individual was merely one factor to be considered and should not be given greater weight by making it an independent condition precedent to conducting the common law agency analysis. Because the trial court failed to consider all of the agency factors and then weigh them, the Court reversed so that the court could apply the proper analysis on remand.

Whether an individual is an “employee” for Title VII purposes arises in a number of contexts, including non-profits, shareholders, trustees, etc.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Sixth Circuit: Students Who Are Actually Learning Are Not Employees Under the FLSA

This morning, the Sixth Circuit Court of Appeals issued a rather rare child-labor decision. In it, the Court was required to decide whether students at a vocational school were student-learners or employees due minimum wage for the "work" they performed at the school (in a nursing, farming, maintenance or other workplace setting). The Court rejected the Department of Labor employee-trainee test in favor of one that determines whether the individual or the school primarily benefits from the services performed. In other words, "the proper approach for determining whether an employment relationship exists in the context of a training or learning situation is to ascertain which party derives the primary benefit from the relationship." In particular, the Court agreed that the students primarily benefitted from the work because the students were not displacing regular employees in performing essential services. Indeed, all of the work could be performed by the instructors without the assistance of the students if that were the defendant school's aim. Moreover, the education received by the students was effective at teaching necessary skills. Solis v. Laurelbrook Sanitarium and School, Inc., No. 09-6128.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Supreme Court Hears Debate of Whether Wrongful Discharge Claim Is Valid Based on Safety Concerns Shared with Insurance Auditor

Today, the Ohio Supreme Court heard oral argument about whether public policy wrongful discharge claims should be recognized when the employee did not “blow the whistle” to either a government agency or management about safety concerns, but rather, complained to a private sector insurance auditor about his paranoia of being set up to be fired in a document of fire alarm inspections.

As reported in the July 9, 2007 FYI, the Montgomery County Court of Appeals reversed summary judgment in favor of the defendant employer on the wrongful discharge claim after the plaintiff was fired for insubordination for expressing concern about the employer’s fire alarm system with an insurance agent who had been present to inspect the employer’s premises and provide an insurance quote. Dohme v. Eurand Am., Inc., 2007-Ohio-865 (3/2/07). Notably, the plaintiff had not been fired several years earlier when he reported to the fire department that one of the fire alarms had malfunctioned during a fire. Instead, he was transferred to another position which made him responsible for the fire alarm system. A few days prior to his termination for insubordination, the employer had specifically prohibited all employees from speaking with the insurance agent who was scheduled to inspect the premises. Although the plaintiff had not been specifically authorized in writing to meet with the insurance agent, he says that he had been asked to fill in for an absent employee. He then provided a report to the agent about overdue fire alarm inspections and noted that “suspiciously” one of the overdue inspections had not been included on the report. Plaintiff testified that he did not want to be blamed for the omission.

The employer argued that no public policy was jeopardized or implicated by the plaintiff’s termination as required by Ohio law. “Moreover, Plaintiff's statements did not indicate a concern for work place safety. The plain language of his comments only indicates his own suspicion that the missing inspection report is an attempt by Defendant to set him up for a deficient job performance.” However, the Court of Appeals rejected this argument: “[T]he employee's intent is largely irrelevant in an analysis of the clarity element of a wrongful discharge claim. What is relevant is whether [plaintiff] did in fact report information to the inspector that encompassed a public policy favoring workplace safety. If [plaintiff] did so, then the trial court erred in granting summary judgment.” Under state and federal law, “[t]here is a clear public policy favoring workplace fire safety. Therefore, retaliation against employees who raise concerns relating to workplace fire safety contravenes a clear public policy. . . . An employee who reports fire safety concerns to the employer's insurance inspector, regardless of the employee's intent in doing so, is protected from being fired solely for the sharing of the safety information.”

The Court of Appeals also rejected the employer’s argument that the plaintiff had failed to report his concerns to a government agency and chose, instead, an insurance agent. The Court determined that this argument “ignores the fact that an insurer's requirements may function to avoid fire safety defects. When such requirements are imposed, or higher premiums are the alternative, an employer . . . is motivated to cure safety defects. The market thus plays a role different from that of government, which may issue citations, but perhaps more immediate and compelling. And, making the insurer aware of defects through its representative furthers the public interest in effective fire safety measures.”

The Court of Appeals also rejected the argument that an “employee must make some formal announcement that his statements are being made for the purpose of protecting the public policy favoring workplace safety. Employers are presumed to be sophisticated enough to comply with the workplace safety laws. When an employer directs employees to not speak to an insurance representative inspecting a premises, an implication arises that the employer wishes to cover up defects, including those that create a danger to employees. Supporting the employer's conduct endorses its efforts to conceal potential dangers. As the Jermer court recognized, the Supreme Court views employee complaints as critical to the enforcement of the State's public policy. We would be minimizing the importance of these complaints and the State's public policy were we to concentrate on the employee's intent in raising the safety concern rather than on whether the employee's complaints related to the public policy and whether the employer fired the employee for raising the concern.”

During oral argument, the Supreme Court was told that there was no authority supporting the appellate court’s holding that whistleblowing claims can exist even when the whistleblower did not share his or her concerns with a government agency or with management. Some of the justices’
questions indicated that they were skeptical of drawing a bright line for whistleblowing claims which would limit them to government agents or management. Rather, a suggestion was made that public policy might be better served if whistleblower claims were recognized when the concerns were shared with anyone with power to remedy an unsafe situation. The employer’s attorney suggested that such a rule could lead to whistleblower claims being brought when employees merely reported their concerns to co-workers or to their spouses. Questions then focused on whether the insurance auditor could have improved an allegedly unsafe condition such that public policy would be served by recognizing a whistleblower claim when the concerns are shared with an insurance company. Apparently, the trial court record had not been sufficiently developed on that point.

Insomniacs can watch the oral argument at http://www.sconet.state.oh.us/videostream/archives/2008/

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with an attorney.