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Liability Issues Regarding Volunteers

Bob Gregg, Boardman & Clark, LLP

Copied with permission from Robert E. Gregg, Boardman & Clark, LLP and Robert E. Gregg. The full article was condensed for purposes of publication in the MAVA Monthly. 

Many non-profit organizations and public agencies depend on volunteers and could not accomplish their mission without the volunteers' dedication, hard work and long hours. However, volunteers also generate potential liability. Some may cross the boundaries and generate liability for injury or improper actions toward clients or employees. Your organization--and you personally--may be liable for negligently selecting, monitoring or retaining volunteers who cause harm. Some disgruntled "volunteers" have claimed that they were not "volunteers" at all and are now due wages, back pay and benefits for two or three years under Federal Fair Labor Standards Act requirements. Some win! The standards can be confusing, but every organization using volunteers should understand the laws, standards and obligations in order to avoid the dangers and be able to effectively use volunteers to accomplish their mission. 

Employment Laws

Is the Person a Volunteer, Unpaid Intern or Employee?
Employment laws only apply to "employees." If the person is not an employee, then there is no application of any employment law. Over time, though, many organizations have learned that just calling someone an intern or volunteer does not make it so. They have been challenged and found liable under the employment laws for wages, overtime, benefits and discrimination. The major laws at issue are the Federal Fair Labor Standards Act and the anti-discrimination laws (and their state equivalents).

The Department of Labor and States are Making a Major Effort to “Catch” Misuse of Interns and Volunteers.

Unpaid Interns
Unpaid student interns have won employee status and back pay. An internship is supposed to be an educational experience and not just free labor. The Department of Labor has held that to be unpaid, the internship must meet a seven factor test; otherwise there must be at least minimum wage and overtime pay. Otherwise interns are entitled to back pay and attorney fees. A major focus of litigation has been over unpaid internships in both non-profit and for-profit organizations. An intern is supposed to be gaining experience in a career field they wish to enter. It is supposed to be an educational training experience, rather than simply production labor without pay.

In Glatt v. Fox Searchlight Pictures (2nd Cir. 2015) and Schumann v. Collier Anesthesia P.A. (2015), the courts adopted a “primary beneficiary” test. Even if the intern is involved in actual hands-on productive work with clients, customers or patients, or is doing routine tasks, is the internship still providing the primary benefit for the intern? In 2017 the U.S. Dept. of Labor adopted the Primary Benefits Test:

1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee –and vice versa. 

2. The extent to which the internship provides training similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.

3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.

4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar. 

5. The extent to which the internship’s duration is limited to the period in which the intern derives beneficial learning from it. 

6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern. 

7. The extent to which the intern and the employer understand that the internship is conducted without entitling the intern to a paid job at its conclusion. 

Any internship should be carefully constructed. It is advisable to go through an educational institution which gives credit to the intern and provides guidance and structure for the organization at which the intern is placed. If the organization does intend for the intern to perform productive work or direct services for the clients, then a paid internship is probably in order. Paid interns can be used in a wide variety of "work" duties for the benefit of the organization, without violating the law.

Volunteers
Volunteers can perform productive work. Volunteers can contribute directly to the mission of the organization. The standard is different under the FLSA. Volunteers are generally not seeking to enter a new profession. They are not seeking a future job from the organization. They are employed elsewhere, or not in the job market at all. Thus, they are in a different realm than interns/trainees. Thus, the Department of Labor views them in a different light. It is much more accepting of the volunteer status, especially in public agencies and non-profit charitable/service organizations. An individual who performs hours of service for a public agency or non-profit for civic, charitable or humanitarian reasons, without promise, expectation or receipt of compensation for services rendered, is considered to be a volunteer during such hours and therefore not subject to the FLSA. 

In deciding whether one is a true volunteer or an employee, the DOL uses an "Economic Realities Test"regarding the person's economic dependence on the organization. Under the FLSA, the economic realities test asks if an alleged employer:

-Has the ability to hire and fire the employees/volunteers;
-Determines payment rates and methods;
-Controls or supervisors employee/volunteer work schedules or employment conditions; and 
-Maintains employment records on the people at issue. 

Compensation is a key factor. Benefits and non-monetary payments can be considered"wages." Although "volunteers" may expect no compensation in exchange for service, some may still receive reasonable benefits, a nominal fee, etc., without losing their volunteer status. The DOL offers examples of payments, reimbursements, benefits and awards that will not deprive an individual of his or her volunteer status including:

-A uniform allowance or reimbursement for reasonable cleaning expenses paid to volunteers requiring a uniform to perform their duties;
-Reimbursements for out-of-pocket expenses incidental to providing volunteer services, including costs of meals and transportation;
-Reimbursements for tuition, transportation and meal cost involved in attending classes to learn how to effectively perform volunteer services;
-Reimbursements for books,supplies and other materials essential to volunteer training;
-Awards such as "length of service" awards. 

The compensation issue can be confusing. Too much value in "tuition," "fee or membership waivers for volunteers and their family members," "incentives," etc., can go over the line. In Nordic Hills, Inc. v. LIRC (Wis. Ct. App., 2001), the decision held that a volunteer ski patroller for the National Ski Patrol was actually an employee because she received a good deal of compensation in the form of free beverages, discounts on food, discount vouchers on ski equipment and free ski passes for the season for herself and her daughter. In the Alamo case, the "volunteers" were paid commissions based on their productivity. They were also fined for low performance or other violations and subject to disciplinary action the same as an employee. Thus, they were not volunteers. 

Volunteering for your own Employer
The general FLSA rule is that a person may not perform unpaid work for their own employer. The DOL imposes strong presumptions that any work outside the normal hours and the usual duties is considered overtime and must be paid. A "presumption" means that the organization using its own employees as "volunteers" is presumed to be in violation of the FLSA, and the organization has a great burden of proof to show otherwise: guilty until you prove your innocence. Yet, there are many employees who do validly volunteer for their own organizations. A city building inspector may volunteer to be a coach for a city-sponsored youth recreation program. A custodian at a community theater who volunteers to act in one of the plays. A secretary at the YMCA who volunteers to chaperone a weekend youth activity. Company employees may volunteer to help with the company-sponsored refreshment station at the weekend Cancer Society Walk.

Again, the DOL has developed a Six Factor Test. An FLSA exemption for volunteer status will be granted under the following circumstances:

1. The services are entirely voluntary, with no coercion by the employer, no promise of advancement and no penalty for not volunteering;

2. The activities are predominantly for the employee's own benefit;

3. The employee does not replace another employee or impair the employment opportunities of others by performing work which would otherwise be performed by regular employees;

4. The employee serves without contemplation of pay;

5. The activity does not take place during the employee's regular working hours or scheduled overtime hours; and

6. The volunteer time is insubstantial in relation to the employee's regular hours.

Liability to Volunteers

Harm to Volunteers

Is the organization liable to volunteers who are injured in the scope of service? Volunteers have suffered abuse, disability discrimination, age discrimination, sexual harassment and assault by employees and managers of the organizations they volunteer for. They cannot file Title VII sexual harassment cases, etc., since they are not employees. Can they file a civil suit for assault, infliction of distress, etc.? Civil suit damages are even greater than under employment law cases. 

Volunteers are injured by clients. This includes everything from being bitten by children to injury from abusive adults or even the parents or family members of the client group. Many more mundane accidents in traffic or slip-and-falls can happen during a volunteer's services. 

Children as Volunteers -Child Labor Laws
Children (those under age 18) can be employed at early ages, in "street trades" such as delivering newspapers as young as 12 years old. They can certainly also volunteer. Youth organizations are full of youth volunteers and "young leaders." Hospitals have teenage volunteers. Millions of young people volunteer. 

Though they are "volunteers," the child labor laws still may apply. Most child labor laws also cover voluntary activity. Many provide that a child "may not be employed or permitted to work" in age-prohibited activities or hours. The laws have lists of activities and hours which are prohibited for certain age groups, until a person is over age 18 or out of high school. (Also be aware of other age-related legal issues, such as having the “adult” 18-year-old volunteer serving alcohol at the charity wine and cheese fund-raising event, or supervising other teens.) 

An organization can be strictly liable for injury to the youth who is working in a prohibited activity or hours. There may be no defense for contributory negligence or even the youth's own intentional wrongful acts or policy violations, which created the predicament causing injury. Any organization "should know" about standard adolescent immaturity, lack of regard, risk taking and "egging each other on." 

Reducing the Risks of Liability

Some basic ideas for reducing potential exposure for liability for the acts or omissions of volunteers are:
-Check backgrounds of those in sensitive positions.
 

-Make sure all volunteers are properly trained. Organizations may want to consider including all volunteers in any training on workplace violence or workplace harassment. Similarly, if a volunteer is working in an area where there are safety issues, it is important to ensure that volunteers are aware of and follow all safety-related rules. Volunteers should also know how to act in the case of an emergency and to whom they should report. 

-Have volunteers sign an exculpatory agreement relieving the organization from liability for any injuries the volunteer may sustain while carrying out his or her duties, if allowed in your state. Organizations may also require the volunteer to agree to indemnify the organization for losses it may incur on account of the volunteer. 

-Review insurance policies to make sure the organization has adequate coverage. Liability insurance should protect against claims based upon the negligent acts of its volunteers. Further, it is important that the policies cover individuals who drive their own vehicles for organization functions as well as those who drive organization vehicles.

-Have some degree of observation, monitoring, client feedback or "reality checking" to catch and correct problems. Cease using volunteers who pose service risks or ongoing problems. Have a "control function" to monitor and double check those who handle finances, personnel or student records, identity information, medical information or other sensitive issues of clients or the organization. 

-Have a Volunteer Coordinator, an employee who can help assure proper use of, and behavior by, volunteers and that all the trainings, etc. are done.

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Have appropriate policies in place.