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Department of Labor Criticized for Overstepping Bounds in FLSA Claims Against Church

The U.S. Department of Labor brought claims against an Ohio-based church, the Grace Cathedral, for its failure to pay their restaurant workers for the work they did. Although these workers were considered volunteers, the lawsuit alleged that they were “forced” into working for free, in violation of the Fair Labor Standards Act (FLSA). The federal district court agreed with the Department, determining that the church was required to pay nearly $200,000 in back wages and nearly the same amount in other damages. The Sixth Circuit Court of Appeals disagreed and reversed the decision. Here are some of the important legal issues raised in that case.

What is the Fair Labor Standards Act?

The FLSA establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments. Covered nonexempt workers are entitled to a minimum wage of not less than $7.25 per hour effective July 24, 2009. Overtime pay at a rate not less than one and one-half times the regular rate of pay is required after forty (40) hours of work in a workweek. For more detail, click here to visit the Wage and Hour Division of the U.S. Department of Labor.

The DOL’s arguments crossed the line

One of the assertions the appellate court took issue with was that the restaurant employees were “coerced” into working for free. The appellate court found it was necessary to distinguish between “economic coercion” (which could be unlawful) and “spiritual coercion.” In this case, the appellate court reasoned that there were no violations because the restaurant workers had no expectation of being paid. Another surprising argument the Department made was that using unpaid labor was giving the church restaurant an unfair advantage over other restaurants in the area. The appellate court stated that this fact was immaterial. In fact, the court pointed out that “[a] church van competes with a taxi service. A Catholic fish fry competes with a fast-food restaurant. A volunteer home-building project competes with a construction company.”

Where the Department overstepped its bounds

As one of the appellate judges pointed out, the Labor Department argued the pastor of the church had spiritually ‘coerced’ them to work there” is the equivalent of the Labor Department being able to “regulate spiritual dialogue between pastor and congregation” and “assumes a power whose use would violate the Free Exercise Clause of the First Amendment.” According to some of the allegations against the pastor were admittedly “in poor taste,” such as telling the congregation that if they refused to volunteer, they were “blaspheming against the Holy Ghost.”

Nevertheless, the court held the Department did not have the authority to regulate those comments. Judge Raymond Kethledge criticized the Department for attempting to do so, saying “[o]ne hopes that the Department of Labor simply failed to think through its position in this case.” The appellate court further disapproved of the Department’s “conceit of unlimited agency power.” If you feel you have been the victim of discrimination or retaliation in the workplace, or if you have any questions regarding your employment rights, please contact the experienced employment law attorneys at Wrady & Michel, LLC. You can contact us either online or by calling us at (205) 265-1880. We are here to serve you!