12/10/2014 09:51 am ET Updated Feb 09, 2015

Volunteers May Have Employee Legal Status

The federal Court of Appeals for the Sixth Circuit recently decided that volunteering Catholic nuns were not "employees" entitled to religious discrimination protections (Sister Michael Marie v. American Red Cross). Organizations utilizing volunteers, interns, and independent contractors should consider what characteristics create an "employee."

In brief summary, the current case arose because the nuns received performance reviews that would have entitled them to a promotion in responsibilities but they were instead terminated. They alleged religious discrimination in violation of Title VII of the Civil Rights Act of 1964. Title VII addresses actions by employers with 15 or more employees.

The Court noted that it is possible for a monetarily uncompensated volunteer to legally qualify as an employee. Past cases often involved eligibility for workers' compensation benefits for an injury. Volunteers that are provided a path to future employment within the organization are frequently considered "compensated." However, general workplace experience and training is typically insufficient to constitute compensation. Whether or not the volunteer received "compensation" is a factual question for the jury. While some courts consider compensation as the determining factor in creating employment status, the Sixth Circuit considers compensation as simply one of a number of factors.

The relative weight to be given various factors depends on the situation. These factors include, among others, control over how the task is performed, the required skills, the source of tools, duration of the relationship, how payment occurs, and if the work is part of the organization's regular business.

The Sixth Circuit in this case considered the degree of control that the organization had over assignments, including the time, place and manner of performance, to be significant. Control implies the right to fire that results in a loss of income. Volunteers receive no income and the organization lacks the traditional leverage that firing provides. In the current case, the organization did not set a fixed work schedule or closely control the nuns' activities. The nuns had considerable discretion in when and how they volunteered. Hence, there was a low degree of control.

Organizations should consider what distinguishes their volunteers from ordinary employees. Are volunteers promised a path to employment and do they receive items such as health insurance, gasoline money, gift cards, etc.? Are the volunteers on a fixed schedule and do they perform essential services that an employee might otherwise perform? Are the volunteers evaluated and controlled like employees?

If a volunteer is in fact an employee then employee protection laws such as minimum wage and overtime, as well as Title VII, will frequently apply. Consult experienced legal counsel to review your specific situation.