Last spring, Hantz Woodlands utilized hundreds of volunteers to plant more than 15,000 trees on more than 140 acres property that it controversially purchased from the city of Detroit. The volunteer event was a great success for Hantz Woodlands, a for-profit limited liability company, and it was favorably covered by most of the major news outlets in the area.
However, there are serious question about the legality of Hantz’s use of volunteers regarding his for-profit business. This is significant because if the workers that Hantz used to plant his trees were not volunteers, they may have been regarded as employees. Employees, by law, are due minimum wage amongst other benefits. This is true even if the workers agreed to plant the trees for no compensation, because an employer and a worker cannot contract around the law. Instead, who is and is not an employee rests entirely on the legal definitions of those terms as written in our employment laws and as interpreted by our courts.
The United States Supreme Court has defined a volunteer as “[a]n individual who, without promise or expectation of compensation, but solely for his personal purpose or pleasure, work[s] in activities carried on by other persons either for their pleasure or profit.” While the Supreme Court has recognized that the heart of volunteerism are individuals working for charitable, civic, or religious nonprofits with no expectation of compensation, other courts have been hesitant to categorically prohibit all for-profit enterprises from utilizing volunteers.
In order to help determine who is an employee and who is a volunteer, the Department of Labor has developed a six-factor test. No factor is conclusive and the determination is made based on a consideration of the totality of the circumstances. The factors are:
- What is the nature of the entity receiving the services?
- Did the worker receive or expect to receive any form of benefit for the services provided?
- Was the activity less than full-time occupation?
- Were regular employees displaced?
- Were the services offered freely?
- Where the services the kind typically associated with volunteer work?
Looking at the above factors, there is a good argument that the workers utilized by Hantz Woodlands were employees rather than volunteers.
Certainly, the workers in this instance were charitable people who had no expectation of compensation. It is also certain that they offered their services freely. However, the entity receiving the work was Hantz Woodlands, a for-profit company. The work was directly related to the trees that will be the assets from which the company plans to draw its profits. While the work was only for one day, that is only because of the large number of volunteers recruited for the project. Had Hantz Woodlands utilized a group of employees and given them all of the benefits an employer is required to give employees, the work would have taken weeks if not months. Therefore, there is a strong argument that the volunteers displaced employees as well, or at least made it possible for Hantz Woodlands to not hire employees.
The last point is perhaps the most important and gets to the heart of what was legally wrong about Hantz Woodland’s use of volunteers and why many have been frustrated with the project. Hantz Woodlands is a for-profit company that is growing trees to harvest for a profit. Even though the woodlands project arguably has a socially beneficial purpose as well, volunteers generally are not used to help the business of a for-profit enterprise, especially when those volunteers are working to further the heart of the business’s commercial purpose. Therefore, Hantz Woodlands should have paid employees, and perhaps they could have found a few in the neighborhood they claim to be eager to help.
The above analysis begs the question of why there has been no legal action against Hantz Woodlands? The answer is likely that since the Department of Labor and the Michigan Wage and Hour Division have limited resources, enforcement regarding such big, one-day volunteer events are lax. The Michigan Wage and Hour Division only investigates an employer if they receive a complaint from a worker, and the Federal Department of Labor is likely more concerned with repeat, flagrant violators of employment laws. Also, most of employment law has been constructed to protect individual workers in negotiating for their personal employment with an employer. It is not as well suited for governing situations like this where a for-profit business uses a large group of ready-and-willing volunteers for a one-day event as a labor force instead of paid employees. Regardless of the enforcement loopholes that may exist, the law is the law and Hantz Woodlands appears to be on the wrong side of it in this instance.