The Grace Cathedral church near Akron, Ohio, found itself in big legal trouble for running a (money-losing) cafeteria open to the public in which much of the labor was provided free by volunteer members of the congregation. Beginning in 2014, the U.S. Department of Labor investigated and then sued it on the grounds that for an enterprise, church or otherwise, to use volunteer unpaid labor in a commercial setting violated the minimum wage provisions of the Fair Labor Standards Act (FLSA) of 1938. A trial court agreed with the Department and found liability, but now, in Acosta v. Cathedral Buffet et al., the Sixth Circuit has reversed the ruling and sent the case back for further proceedings, noting that “to be considered an employee within the meaning of the FLSA, a worker must first expect to receive compensation.”
Judge Raymond Kethledge, writing in concurrence, takes issue with what may be the most remarkable argument advanced by the Department of Labor: that the congregation volunteers should count as employees because “their pastor spiritually ‘coerced’ them to work there. That argument’s premise — namely, that the Labor Act authorizes the Department to regulate the spiritual dialogue between pastor and congregation — assumes a power whose use would violate the Free Exercise Clause of the First Amendment.”
Judge Kethledge goes on to note that as “the record makes clear, the Buffet’s purpose was to allow the church’s members to proselytize among local residents who dined there,” and that along with its congregation volunteers the establishment “had 35 full-time paid employees — all of whom, incidentally, have lost their jobs as a result of this lawsuit.”
A footnote: Given that the Obama Labor Department’s stance flies in the face both of sound labor policy and principles of church-state separation, why didn’t the Trump administration reverse position on it? One clue to a possible answer (via Ted Frank and commenters on Twitter) is that the nomination of a new solicitor for the department did not clear the Senate until December 21, 2017, two weeks after the case had been argued before the Sixth Circuit panel. (cross-posted and adapted from Overlawyered).