All-Star FanFest Volunteers Seek Unpaid Wages From MLB

Volunteers at Major League Baseball’s 2013 All-Star Game FanFest have filed a putative class action against the MLB in New York state court alleging that the league violated state wage and hour laws by failing to pay them minimum hourly wages.  John Chen, the named plaintiff, alleges that he and other “hospitality volunteers,” who served as greeters and ticket takers during the week-long festival, were not paid any cash wages for their work.  Instead, plaintiffs allege, the MLB provided them only with MLB paraphernalia and free admission to the FanFest.  The lawsuit asserts that the MLB violated the New York Labor Law (“NYLL”) and seeks unpaid minimum wages, liquidated damages, and attorneys’ fees.

This is not the first lawsuit brought against the MLB by FanFest volunteers.  In 2013, Chen filed a similar action in federal court alleging that the MLB’s “payment” of FanFest volunteers with MLB gear (such as clothing, water bottles, and backpacks) in lieu of actual wages violated both federal and state law.  In March 2014, however, U.S. District Judge John G. Koeltl dismissed Chen’s claims brought under the Fair Labor Standards Act (“FLSA”).  The Court found that even if the FanFest volunteers were properly classified as “employees,” they fell within a statutory exemption to the FLSA’s minimum wage requirements; namely, the volunteers were “employed by an establishment which is an amusement or recreational establishment” that does not operate for more than seven months in a calendar year.[1]  The Court also dismissed without prejudice Chen’s claims that the MLB violated the NYLL by failing to pay appropriate minimum wages, keep appropriate wage records, and provide statutorily required wage information.  Those NYLL claims appear to be the basis for the newly filed action in state court.

Article 19 of the NYLL requires employers to pay all employees minimum hourly wages in accordance with the statute.  The term “employee,” in turn, is defined quite broadly to include any individual “who is employed or permitted to work by an employer in any occupation.”  N.Y. Lab. Law § 651(5).  Several categories of individuals are, however, excluded from this statutory definition of employee, including volunteers “at a recreational or amusement event run by a business that operates such events,” so long as the event does not last longer than eight consecutive days and occurs only once per calendar year.  N.Y. Lab. Law § 651(5)(o).

This “recreational or amusement event” volunteer exclusion has not yet been interpreted by the New York Department of Labor (“DOL”) or New York courts.  The DOL has, however, had occasion to interpret another provision that excludes volunteers for charitable or religious organizations from the statutory definition of employees. See N.Y. Lab. Law § 651(5)(f).  In that context, the DOL has concluded that paying a volunteer any amount of compensation (beyond that necessary to reimburse for expenses) will convert a volunteer into an employee who must be paid minimum wage.[2]  It is unclear whether this principle would extend to an employer giving a volunteer non-cash compensation (such as t-shirts, baseball caps, water bottles, and backpacks), although there are reports that the DOL has investigated non-profit organizations after they rewarded volunteers with gift cards.  The DOL has also taken the position that individuals properly classified as “volunteers” will not perform any work that is also (or would otherwise be) performed by paid employees. [3]  It is unclear whether and to what extent FanFest volunteers supplemented or displaced paid workers in the roles of greeters and ticket takers.

The MLB litigation may allow New York courts an opportunity to provide guidance on the interpretation of the “recreational or amusement event” volunteer exclusion, as well as the extent to which the provision of non-cash compensation could transform an individual from a “volunteer” into an “employee.”  In the interim, if you would like more information or assistance regarding volunteer programs, please contact Laura Monaco at (212) 758-7754, or any other attorney at the Firm.

[1] See 29 U.S.C. § 213(a)(3).

[2] RO-07-0043, N.Y. State Dep’t of Labor Opinion Letter (May 11, 2007).

[3] RO-09-0068, N.Y. State Dep’t of Labor Opinion Letter (July 24, 2009).