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2012 Precedent Nothing To Speak Of

2012 has been a relatively quiet fire law year from the perspective of major legal rulings being handed down. In fact, in my annual review for Firehouse which I submitted today, I opted to not even discuss 2012 precedent setting case law (there really weren’t any to speak of) and instead focused on new cases and controversies that developed in 2012… and boy were there alot of them!!!!

Nevertheless, there were a couple of cases that were decided in 2012 that are worth noting. During this holiday week when there is not alot of legal headlines – we pause to take a look back.

Probably the most significant fire law ruling in 2012 was the only US Supreme Court fire service decision, Delia v. City of Rialto, also known by it’s name at the Supreme Court, Filarsky v. DeLia.

There are a few reasons that I opted not to bother discussing this case in the Firehouse article – but probably the biggest is the convoluted reasoning that the Supreme Court used in the case.

Ok… so at this point there are two groups of readers out there – one group saying I am not sure what he means by convoluted, and the other group saying – gee, I wouldn’t call the DeLia decision convoluted.

To the latter group (most likely Federal court judges, law professors, and legal scholars), I agree – convoluted may be a bit strong. Any second year law student should be able to follow the reasoning. BTW – you should stop reading here.

To the rest of the readers – only a legal theorist who has spent way too much time thinking and not enough time doing could possibly reach the conclusion of the Supreme Court in DeLia… and explaining the Court’s decision in full detail would bore us to the verge of tears… or drinking… or both.  I did my best back to explain the ruling back in April, so if you are interested in a more in depth discussion by all means read the April 20, 2012 posting.

The thumbnail sketch of the DeLia case:

  • A firefighter, Nicholas DeLia, was suspected of abusing his injury status.
  • A private investigator observed him buying construction supplies including rolls of insulation.
  • At an interrogation conducted by a private attorney hired by the city (Filarsky) he was asked to explain the purchase.
  • DeLia said he intended to install the insulation in his house when he was better and it was still at his house in its original packaging.
  • He was asked to produce the insulation and on advice of counsel he declined, citing an expectation of privacy because the rolls were in his house.
  • DeLia was then given a written order by the fire chief to produce the insulation.
  • Over the objection of his attorney he was accompanied to his house by two chief officers whereupon he went inside, and came out with the insulation.
  • As a result the investigation was completed.
  • FF DeLia then filed suit against the city, the chiefs and Filarsky alleging a violation of his 4th Amendment Rights. In essence FF DeLia claimed that the order to bring something out of his house constituted a warrantless search – the same as if the chiefs had entered his house without consent or if the chief had ordered him to consent to an entry.
  • The courts in the case at all three levels (trial, court of appeals, and Supreme Court) held that what the chiefs did under Filarsky’s direction was a violation of DeLia’s Fourth Amendment Rights… but here is where it gets convoluted:
  • The courts held that everyone… the fire chief, the others chiefs, the city and even the attorney, Filrsky – had qualified immunity… so FF Delia loses….

I am not sure how much we would gain by getting into the reasoning of the Court, suffice it to say I don’t buy it. A Constitutional violation – any Constitutional violation – should be vindicated – if by no other means than by a $1 nominal judgment. However, our decidedly conservative (anti-employee) courts have been developing an ever increasing body of convoluted case law that finds immunity for this violation and qualified immunity for that violation, and justice be damned. It’s like a judicial game of keep-a-way where even when you win, you lose… and DeLia – whose 4th Amendment Rights were clearly violated – well he loses. Sorry about making you go through all that trouble.

The next case is a wage and hour case, Freeman v. Key Largo Volunteer Fire & Rescue Department et al, 2012 U.S. App. LEXIS 22392 (11th Cir. 2012), decided on October 31, 2012. It is a peculiar case with (not surprisingly) the same outcome as we saw in Delia: a firefighter who sues his fire department-employer, loses.

At issue in the case was whether or not a firefighter who receives $5 per hour is a volunteer receiving “nominal compensation” for his services, or an underpaid employee entitled to at least minimum wage.

Corey Freeman filed suit against Key Largo claiming that the $5 per hour he was paid to serve as a firefighter was less than the $7.25 Federal minimum wage and in violation of the Fair Labor Standards Act (FLSA). Key Largo claimed he got what he got because he was an unpaid volunteer and the $5 was merely nominal compensation.

The court concluded that Freeman was a volunteer. In reaching that conclusion the court inexplicably ignored the US Department of Labor’s primary test for determining if someone is a volunteer or not, the so-called 20% rule. Under that test an organization such as a fire department can give volunteers nominal compensation so long as it does not exceed 20% of what it would pay a similar employee. Here is a link to more discussion on the case, but truthfully it is another 2012 ruling that leaves me scratching my head… and another reason why I omitted it from my Firehouse article.

Tomorrow we will take a look at some other cases from 2012… unless of course there is some breaking fire law event!!!!

 

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Posted in Civil Suit, Constitutional Rights, FLSA, Politics, Volunteers

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No comments Posted by on December 27, 2012

Key Largo Volunteer Not an Employee under FLSA

At what point does a volunteer firefighter who receives some nominal compensation for his services become an underpaid employee entitled to at least minimum wage?

That question was recently put to the test in Key Largo, Florida when Corey Freeman filed suit claiming that because he was paid $5 per hour to serve as a volunteer firefighter he was actually an employee who was wrongly denied minimum wage.

The case, Freeman v. Key Largo Volunteer Fire & Rescue Department et al, 2012 U.S. App. LEXIS 22392 (11th Cir. 2012), was decided on October 31, 2012 but has more recently found its way into management and legal blogs, as well as the conventional media.

Freeman began with Key Largo VFRD in 2006, at which time he signed an agreement acknowledging his status as a volunteer and indicating he would receive $5 per hour, subject to a $1200 per month maximum. The department also employed paid employees who received $16.83 and $20.04 per hour.

The department was funded and under the umbrella of the Key Largo Fire and Emergency Services District. The hiring of paid department employees had to be approved by the district, who ultimately funded the positions.

Freeman filed suit in Federal court in 2010 claiming he was an employee of the department and/or the district, and that under the Fair Labor Standards Act (FLSA) he was entitled to minimum wage for all hours worked. The trial court ruled that he was not an employee under the FLSA, and Freeman appealed to the 11th Circuit.

The appeals court agreed with the trial court and applying  an “economic reality” test concluded that Freeman was not an employee. Central to the court’s ruling were the following:

  • Freeman signed the agreement accepting his status as a volunteer;
  • Volunteers received $5.00 per hour while employees received $16.83 and $20.04 per hour;
  • The KLVFRD needed permission from KLFESD to hire paid employees and Freeman never alleged that the department requested or that the district gave permission to hire him;
  • The days and shifts Freeman worked were not assigned and varied depending on his availability;
  • Freeman typically worked only two shifts per week;
  • The KLFESD did not supervise the firefighter and it did not mandate standard operating guidelines for the volunteer firefighters;
  • The firefighter’s individual rate of pay was not set by the KLVFRD or by KLFESA; and
  • Besides a W-2, the KLVFD provided no other employment records to the firefighter.

Oddly, the court did not consider nor even mention the 20% rule that is often used to evaluate when a volunteer’s compensation goes beyond a “nominal fee”.

As explained by the US DOL, the 20% rule states “As a general rule, the Department finds that a fee paid is (apart from expenses) nominal as long as it does not exceed 20 percent of the amount that otherwise would be required to hire a permanent employee for the same services.”

There are a number of issues associated with the 20% rule that the court might have tried to address, including:

  • Does the 20% rule apply to hourly pay, monthly pay, or annual pay?
  • If the 20% rule is applied solely on hourly pay, then $5/hour does indeed exceed 20% of $16/hour or $20/hour, in which case Freeman would satisfy his initial burden. The monthly and annual analysis would depend on total hours worked (40, 42, 48, 56 etc.) by the paid firefighters, at the applicable hourly rate. We could also consider it this way:  Does $1200/month (or $14,400 annually) exceed 20% of the monthly or annual compensation of the paid firefighters? If the firefighters receive more than $6,000 per month or $72,000 per year, then Freeman would lose based on the 20% rule. If they do not, then Freeman would have at least satisfied his burden under the 20% rule.
  • Should benefits factor into the evaluation of 20% or is it based on pay only?

Interesting questions that the court avoided having to address.

Here is a link to the US Department of Labor’s fact sheet discussing the economic reality test. Here is a link to a DOL opinion letter explaining the 20% rule.

Here is the court’s ruling: Freeman v Key Largo

Here is a management oriented blog about the decision, which incidentally fails to comment upon the absence of a discussion of the 20% rule.

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Posted in Civil Suit, FLSA, Labor Law, Volunteers, Wage and Hour

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1 comment Posted by on November 27, 2012

FLSA 20% Rule

Today’s Burning Question: How does the FLSA 20% rule with regard to volunteers work? We are having a debate over this at our department and our Firehouse Lawyers seem to disagree.

Answer: The FLSA’s 20% rule with regard to volunteers is essentially – that volunteers who receive some nominal compensation do not lose their status as volunteers provided they receive “generally, an amount not exceeding 20 percent of the total compensation that the employer would pay to a full-time firefighter for performing comparable services.”

An example: if the total compensation for full time firefighters is determined to be $40,000 per year, and a volunteer is given an $800/year stipend, then because $800 is less than 20% of the total compensation there is no FLSA violation.

However, if a volunteer were to be compensated at a higher rate, say $8,500/year – then it would be an FLSA violation and the department would then have to pay the firefighter at least minimum wage for all hours worked.

To determine “total compensation” the FLSA requires a department to look at what they pay their own hourly employees, and include additional benefits such as pensions, health care, and vacations. For departments that have no full time employees, they may look to comparable departments in the area.

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Posted in Burning Question, FLSA, Volunteers, Wage and Hour

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No comments Posted by on July 24, 2012