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In the case of Adams v. Palm Beach County, 2021 U.S. Dist. LEXIS 191114 a (S.D. Fla. 10/4/2021), Plaintiffs were golf course attendants at the Osprey Point Golf Course operated by Palm Beach County, Florida (the County). As part of that arrangement, they were permitted to play golf for reduced greens fees. Plaintiffs alleged that they were employees of Palm Beach County and, therefore, entitled to minimum wage payments under state and federal law. Separately, Plaintiff Gerald Kasmere alleged that he suffered employment retaliation after he complained about not receiving minimum wages. In response, the County filed a motion to dismiss Plaintiffs’ lawsuit. In so doing, the County argued that the Plaintiffs fell within an exception to the minimum wage laws for public agency volunteers.

Facts of the Case

The County solicited golf course volunteers through the website for its parks and recreation department. The posting for Osprey Point stated:

This is a high volume 27-hole golf facility that opened in 2010. The course is the first in Florida to receive Audubon Certified Classic Sanctuary status. Volunteers serve as course rangers, driving range attendants and bag drop attendants. Hours vary. Nights and weekends preferred. Osprey Point volunteers enjoy being outdoors, getting to know others with similar interests and reduced fees to play and practice golf.

The website further stated in red print: “This site doesn’t provide court ordered volunteer hours.” The website also indicated “an unlimited number of volunteers are needed” and “Osprey Point volunteers enjoy reduced fees to play and practice golf.”

Plaintiffs performed work at the direction of, and for the benefit of, the County at the Osprey Point Golf Club. They performed duties as assigned by management, including being a cart attendant, ranger, ranger assistant and range ball picker. They were required to follow strict rules with regard to the performance of their duties, such as not sitting while on duty. They were not paid wages. They were, however, offered discounted rounds of golf if they worked at least one shift of at least seven hours per workweek. They also were allowed to accept tips. A typical greens fee for a paying customer at Osprey Point was $96. Plaintiffs were permitted to play for $5.

Between October 2016 and November 2019, Plaintiff Gerald Adams played approximately 31 discounted rounds of golf. Between February 2019 and August 2019, Plaintiff Michael Shaw played approximately 43 discounted rounds of golf. Between October 2016 and March 2020, Plaintiff Gerald Kasmere played approximately 95 discounted rounds of golf.

At unspecified times prior to October 2020, Kasmere complained several times to his supervisor and other golf course officials employed by the County that he was not being paid cash wages for his services, which violated federal and state wage laws. He was on furlough in 2020 while Osprey Point was closed due to the coronavirus (COVID-19) pandemic. In October 2020, Kasmere met with a manager from Osprey Point to discuss returning there after the furlough ended. The manager explained that Osprey Point “needed workers in the ‘volunteer’ positions because some workers who had previously been in those positions were unable or unwilling to return to work because of the pandemic.”

The manager further explained that new pandemic-related policies would prohibit Kasmere from cleaning golf clubs or loading/unloading golf bags. He also explained that the tip jars were being removed. Kasmere “complained that removing the tip jars would make it even harder on ‘volunteers.’” Kasmere “objected that it was bad enough that the County did not pay wages and obtained free labor from its ‘volunteers,’ who were entitled to wage payments.” Kasmere was then told “for the first time that no positions were available.”

Motion to Dismiss

In response to the County’s motion to dismiss, the federal district court acknowledged that it “must view the well-pleaded factual allegations in a claim in the light most favorable to the non-moving party,” in this case, the Plaintiffs. While assuming “all the allegations in the claim are true (even if doubtful in fact),” the court noted “the factual allegations must be enough to raise a right to relief above the speculative level.”

As cited by the court, the Supreme Court had emphasized that “to survive a motion to dismiss a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” According to the court, factually unsupported allegations based “on information and belief” are not entitled to the assumption of truth. On a motion to dismiss, the issue before the federal district court was, therefore, whether Plaintiffs had alleged sufficient facts to plead a plausible claim for compensation under the Fair Labor Standards Act. (FLSA).

Fair Labor Standards Act

As described by the federal district court, the FLSA “requires every employer” to “pay to each of his employees a minimum wage.” 29 U.S.C. § 206(a)(1). Further, “Employee” is defined in the FLSA as “any individual employed by an employer.” 29 U.S.C. § 203(e)(1). Within the context of the FLSA, “‘Employ’ includes to suffer or permit to work.” 29 U.S.C. § 203(g).

In contrast to employees, the FLSA implementing regulations acknowledge: “Individuals who are not employed in any capacity by State or local government agencies often donate hours of service to a public agency for civic or humanitarian reasons.” Moreover, the court noted: “There are no limitations or restrictions imposed by the FLSA on the types of services which private individuals may volunteer to perform for public agencies.”

Public Agency Volunteer Exception

In particular, the federal district court recognized: “There is an exception for an individual who volunteers to provide services for a public agency which is a State, a political subdivision of a State.” Under the FLSA, this “Public Agency Volunteer Exception” would apply “if the individual receives no compensation or is paid expenses, reasonable benefits, or a nominal fee to perform the services for which the individual volunteered.” Such services, however, must not be “the same type of services which the individual is employed to perform for such public agency.” 29 U.S.C. § 203(e)(4)(A). As cited by the court, the FLSA implementing regulations defined a “volunteer” as:

An individual who performs hours of service for a public agency 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. 29 C.F.R. § 553.101(a).

Such individuals are considered volunteers and not employees of such public agencies if their hours of service are provided with no promise expectation, or receipt of compensation for the services rendered, except for reimbursement for expenses, reasonable benefits, and nominal fees, or a combination thereof....

Whether the furnishing of expenses, benefits or fees would result in individuals losing their status as volunteers under the FLSA can only be determined by examining the total amount of payments made (expenses, benefits, fees) in the context of the economic realities of the particular situation. 29 C.F.R. § 553.106.

Further, the court noted the FLSA regulatory definition of “volunteer” must be “applied in a common-sense way that takes into account the totality of the circumstances surrounding the relationship between the person providing services and the entity for which the services are provided, in light of the goals of the FLSA.” In so doing, the federal district court would look “at the objective facts surrounding the services performed to determine whether the totality of the circumstances supports a holding that, under the statute and under the regulations, the non-paid regulars are volunteers.”

Objectively Reasonable Expectations

In this case, the County had argued Plaintiffs were not “employees” under the FLSA because “the right to play golf at a reduced fee is not ‘compensation’ under the FLSA.” In the alternative, the County claimed the right to play golf as a reduced fee was a “reasonable benefit” for volunteers under the FLSA. In addition, the County maintained “Plaintiffs did not have an objectively reasonable expectation of wages or the equivalent.” In response, Plaintiffs contended “each round of golf was in-kind compensation worth approximately $91.”

For purposes of the motion to dismiss, viewing the allegations in the complaint in a light most favorable to Plaintiffs, the federal district court found Plaintiffs’ subjective belief that they should be paid wages for their services was “not objectively reasonable.” In so doing, the court noted “the positions they accepted at Osprey Point were clearly and unequivocally advertised as volunteer positions”:

The job posting does not mention wages. The job posting also listed discounted golf as something the volunteer could “enjoy,” equivalent to being outdoors and getting to know others with similar interests, neither of which is akin to compensable wages. A person seeing that posting would not reasonably conclude that wages would be paid.

Moreover, in the opinion of the court, “working as a ranger or cart attendant at a public golf course is akin to other positions that are amenable to volunteerism,” as described in the FLSA regulations. 29 C.F.R. § 553.104(b).

In this particular case, the court also found “nothing inherent about the job or job duties that would reasonably suggest that wages necessarily would be paid.” On the contrary, in the opinion of the court, it was “not objectively reasonable to expect wages when you sign up for a position advertised for volunteers, that can be performed by volunteers, then do not receive wages for an extended period of time.” Under such circumstances, the court held: “The only objectively reasonable conclusion from those facts is that you have accepted a volunteer position that pays no wages.” As characterized by the court: “Plaintiffs’ argument to the contrary borders on frivolous.”

Reasonable Benefit

Further, examining “the totality of the relationship between Plaintiffs and the County,” the federal district court determined “the ability to play golf at a reduced fee was a reasonable benefit that was consistent with the economic realities of the particular situation.”

Plaintiffs had argued the “reasonable benefit exception does not apply because the record does not support a finding that discounted rounds of golf are ‘commonly and traditionally’ provided to public agency volunteers.” The federal district court rejected this argument. In the opinion of the federal district court, this argument was “incorrect for several reasons.” First, the court noted “the statute does not include a ‘commonly and traditionally’ requirement; it speaks only of ‘reasonable benefits.’” 29 U.S.C. § 203(e)(4)(A). In so doing, the court acknowledged that the FLSA implementing regulations do discuss “certain benefits that are ‘commonly and traditionally provided,’” and found this description to be a “non-exclusive example”:

Individuals do not lose their volunteer status if they are provided reasonable benefits by a public agency for whom they perform volunteer services. Benefits would be considered reasonable, for example, when they involve inclusion of individual volunteers in group insurance plans (such as liability, health, life, disability, workers’ compensation) or pension plans or “length of service” awards, commonly or traditionally provided to volunteers of State and local government agencies....

Whether the furnishing of expenses, benefits or fees would result in individuals losing their status as volunteers under the FLSA can only be determined by examining the total amount of payments made (expenses, benefits, fees) in the context of the economic realities of the particular situation. 29 C.F.R. § 553.106.

Accordingly, the court noted: “the ultimate touchstone is reasonableness under the totality of the circumstances of the economic relationship.” In this particular instance, the court determined the value of the discounted golf played by Plaintiffs. For Adams (at $91 per round), the value was $2,821 over a 38-month period (an annual average of $890). For Shaw, it was $3,913 over a seven-month period. For Kasmere, it was $8,645 over a 42-month period (annual average of $2,470). In the opinion of the federal district court, the benefits of these amounts were “consistent with the economic realities of the situation” for volunteers:

Plaintiffs were volunteering at a golf course; they were offered discounted rounds of golf that could be used only on “certain days, times and locations where discounted golf rounds were made available.” The benefit could only be used at County-owned courses. Providing this benefit did not directly cost the County anything. If a Plaintiff opted to play a discounted round of golf, he still had to pay the County $5.

Further, the court found no indication in the complaint that “allowing these discounted rounds precluded others (who would pay full price) from using the courses.” The complaint, therefore, failed to allege “the County suffered a loss of other revenue.” As a result, the court found nothing in the complaint to “refute the logical inference that there was no material marginal cost to the County from allowing an extra round of golf to be played” by the Plaintiffs. Moreover, the court found no indication in the complaint that “this benefit could be monetized by transferring it to a third party.” Based upon all of these factors, the federal district court concluded: “Plaintiffs were receiving a reasonable, non-compensatory, limited, golf-related benefit for volunteering at a golf course.”

In the opinion of the court, this conclusion was consistent with the examples in the Department of Labor FLSA regulations. Under these regulations, the court noted “reasonable benefits” included “inclusion of individual volunteers in group insurance plans (such as liability, health, life, disability, workers’ compensation) or pension plans or ‘length of service’ awards.” As characterized by the court: “Providing someone with insurance or permitting them to participate in a pension plan is a more significant (or at least equal) benefit than a golf course providing discounted rounds of golf.”

The federal district court also cited precedent from a federal appeals court, which had held a stipend for a school golf coach was a “nominal fee” for purposes of the Public Agency Volunteer Exception. In the cited precedent case, the federal appeals court had held “as a matter of law that the stipend was not ‘compensation’ for service rendered because it was paid without regard to the number of hours worked” and “the amortized hourly rate was less than the federally-mandated minimum wage.” Similarly, in this case, the court found “the discounted golf privilege only accrues after a minimum number of hours are worked” but, once earned, the privilege was “not tied to the number of hours worked.”

Further, the court found the value of the benefit to Plaintiffs Adams and Kasmere was “comparable to, or less than the annual stipend” in the cited precedent involving the school golf coach. In particular, the court noted that the complaint did not allege the number of hours that each Plaintiff worked. As a result, the court determined the complaint “does not create an inference that the value of the discounted golf benefit exceeded minimum wage.”

Moreover, in the opinion of the court, “Plaintiffs mistakenly argue several times that the Court is bound by nonfactual, irrelevant, or unsupported allegations in the complaint” that Plaintiffs received “compensation” and “in-kind compensation.” In so doing, the court found Plaintiffs had confused “facts worthy of the assumption of truth” with “legal conclusions or unsupported allegations,” which are not sufficient to overcome a motion to dismiss. According to the court, the fact that Plaintiffs subjectively expected to receive compensation was irrelevant. Under the FLSA, the issue was “whether an objectively reasonable person would have expected to be paid wages for these positions.” Under the circumstances of this case, the federal district court held the complaint “fails to allege sufficient facts to establish a plausible claim that Plaintiffs were employees” under the FLSA.

Retaliation

As cited by the court: “The FLSA makes it unlawful for any person to discharge or in any other manner discriminate against any employee because such employee has filed any complaint related to non-payment of wages.” 29 U.S.C. § 215(a)(3). In this case, Plaintiff Kasmere also had alleged the County had violated the FLSA by retaliating against him for complaining about compensation and not returning him to his volunteer position following the pandemic furlough. Since Kasmere was not an “employee” of the County, the court similarly dismissed this FLSA claim for retaliation.

Conclusion

Having determined that Plaintiffs had failed to plead sufficient facts to establish that they were “employees” under the FLSA Public Agency Volunteer Exception, the federal district court granted the County’s motion to dismiss Plaintiffs’ minimum wage claims under the FLSA, as well as analogous state law which was consistent with the FLSA.

See also: Unpaid Student Interns Under the Fair Labor Standards Act. James C. Kozlowski. Parks & Recreation. May. 2010 Vol. 45, Iss. 5.

James C. Kozlowski, J.D., Ph.D., is an Attorney and Associate Professor in the School of Sport, Recreation and Tourism Management at George Mason University. Law review articles archive (1982 to present)