Legal Updates

Are Your School's "Volunteer" Coaches Actually Entitled To Overtime Pay?

The United States Court of Appeals for the Fourth Circuit recently ruled in Purdham v. Fairfax County School Board that a public school employee who also coaches a high school golf team is not owed overtime pay for his time spent coaching due to his “volunteer” (as opposed to “employee”) status under the Fair Labor Standards Act (the “FLSA”).  Purdham underscores the complexity of designating school coaches as volunteers for purposes of the FLSA, an issue that is of equal concern to both public and private schools.  This article discusses the Purdham decision – which examines the designation of coaches as volunteers in the public school setting – and also provides guidance on the steps that private schools must take to properly designate their coaches as volunteers.

Factual Background Of Purdham

The plaintiff, James Purdham (“Purdham”), had worked for the Fairfax County Public School District (the “School District”) as a safety and security assistant for approximately 20 years.  The School District properly classified Purdham’s position as non-exempt under the FLSA.  During his past 15 years of employment, Purdham also served as a golf coach for one of the School District’s secondary schools.

In addition to his safety and security duties, Purdham spent approximately 400 hours each golf season (which ran from early August through November) performing coaching duties.  The School District paid Purdham a stipend for his coaching duties and reimbursed him for his expenses and mileage in relation to his coaching activities.  When Purdham began coaching, his annual stipend was between $500 and $800.  Over time, the stipend increased to more than $2,000 per golf season.  The School District paid the same stipend to all coaches, regardless of the sport or success of the team.

In 2004, the School District decided – out of an abundance of caution stemming from ongoing FLSA-related litigation – to pay its non-exempt employees, including Purdham, retroactive overtime wages for time spent coaching during the 2003-2005 athletic seasons.  Further, for the 2005-2006 school year, the School District entered into contracts with its coaches, agreeing to pay them $14 per hour for coaching duties, plus one and one-half times their regular hourly rate for all overtime hours worked.

In 2006, the United States Department of Labor (“DOL”) issued an opinion letter clarifying that public school employees who perform coaching duties may properly be considered volunteers under the FLSA if there is no expectation of compensation (excluding a nominal stipend) and the coaching duties are performed without pressure or coercion.  Relying on this opinion, the School District concluded that its non-exempt employees had, in fact, been properly deemed volunteers in connection with their coaching duties, and that the employees were thus not entitled to overtime compensation under the FLSA.  As a result, the School District resumed paying annual stipends to its coaches, including Purdham, and announced that time spent in coaching would no longer be considered in determining overtime pay.

Trial Court’s Decision

Purdham subsequently filed an action against the School District claiming that he was an “employee” within the meaning of the FLSA with respect to his services as a golf coach and, thus, that the School District owed him unpaid overtime wages pursuant to the FLSA.

In its defense, the School District pointed to section 3(e)(4)(A) of the FLSA, the statutory provision that was the basis for DOL’s 2006 opinion.  This provision states that the term “‘employee’ does not include any individual who volunteers to perform services for a public agency” 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” and “such services are not the same type of services which the individual is employed to perform for such public agency.”  The School District argued that Purdham acted as a volunteer during the course of his coaching duties, as he was not doing the same type of work that was required by his safety and security assistant position, and because the stipend he received was a “nominal fee” authorized by law to be paid to volunteers.

The trial court dismissed Purdham’s case on summary judgment, and Purdham appealed, presenting the Fourth Circuit with the issue of whether the School District violated the FLSA by failing to pay him overtime wages for his golf coaching services.

Fourth Circuit’s Decision On Appeal

Concluding that the School District properly deemed Purdham a volunteer relative to his coaching activities, the Fourth Circuit affirmed the dismissal of Purdham’s case on summary judgment.  In its ruling, the Fourth Circuit explained that “where a public employee engages in services different from those he or she is normally employed to perform, and receives ‘no compensation,’ or only a ‘nominal fee,’ such work is exempt from the FLSA and the public employee is deemed a volunteer.”

Purdham Does Not Affect Public And Private School Teachers Who Coach Athletic Teams

Significantly, Purdham involved a non-exempt public school employee (a safety and security assistant) who assumed coaching responsibilities.  If Purdham had involved a teacher seeking extra pay for coaching duties, then the case would have been even more straightforward.

Applicable FLSA regulations state that public and private school teachers who spend a considerable amount of their time on extracurricular student activities, such as coaching athletic teams or acting as advisors in such areas as drama, speech, debate or journalism, are engaged in teaching while undertaking these activities.  Accordingly, the salary paid to teachers as “exempt” employees (teachers are exempt from the FLSA’s minimum wage and overtime requirements) covers all teaching duties, including those related to coaching and other extracurricular student activities.

In fact, teachers are even exempt from the FLSA’s salary basis requirement of $455 per week, which is the threshold salary that generally must be paid to an employee in order to properly classify the employee as exempt from the statute’s minimum wage and overtime requirements.  Consequently, public and private schools may compensate teachers at a rate of less than $455/week and need not provide additional compensation to those teachers who also coach athletic teams and/or otherwise assist with extracurricular offerings.

Applicability Of Purdham To Non-Exempt Non-Teachers At Private Schools

Technically, Purdham does not apply to private schools because it was based on a statutory provision of the FLSA that is specific to public schools and their employees.  However, DOL recognizes volunteer status for workers at private schools and other private nonprofit institutions under certain circumstances.

Specifically, DOL considers the following factors in determining whether a worker at a private nonprofit institution should be accorded volunteer status under the FLSA:  1) the nature of the entity receiving the services; 2) the receipt by the worker of any benefits, or expectation of any benefits, for his or her work; 3) whether the activity is less than a full-time occupation; 4) whether regular employees are displaced by the “volunteer”; 5) whether the services are offered freely without pressure or coercion; and 6) whether the services are of the kind typically associated with volunteer work.  Unfortunately, these factors do not provide employers with a bright-line rule.

Some additional guidance can be gleaned from the Field Operations Handbook of DOL’s Wage and Hour Division (“WHD”), which provides the following examples of activities generally considered to be nonprofit volunteer work.  While some of the descriptions used in these examples are dated, and even politically incorrect by today’s standards, these examples nonetheless shed some light on when workers may permissibly be categorized as volunteers.

• “[M]embers of civic organizations may help out in a sheltered workshop”;

• “[W]omen’s organizations may send members or students into hospitals or nursing homes to provide certain personal services for the sick or the elderly”;

• “[M]others may assist in a school library or cafeteria as a public duty to maintain effective services for their children”; and

• “[F]athers may drive a school bus to carry a football team or band on a trip.”

The Field Operations Handbook also states:  “Similarly, individuals may volunteer to perform such tasks as driving vehicles or folding bandages for the Red Cross, working with children with disabilities or disadvantaged youth, helping in youth programs as camp counselors, scoutmasters, [or] den mothers, providing child care assistance for needy working mothers, soliciting contributions or participating in benefit programs for such organizations and volunteering other services needed to carry out their charitable, educational, or religious programs.”  (Emphasis added.)

WHD appears to acknowledge that the existing framework for determining when workers may permissibly be treated as volunteers is not a model of clarity.  In this regard, WHD states in one of its recent fact sheets that it is reviewing the need for additional guidance on volunteers in the private nonprofit sector.

Don’t Forget To Check State Law

Generally speaking, the FLSA supercedes less-protective state laws, but not more-protective state laws.  Thus, public and private schools should be sure that any designation of a worker as a volunteer also satisfies applicable state law.

In Massachusetts, for example, the Executive Office of Labor and Workforce Development, Division of Occupational Safety, which administers the Commonwealth’s Minimum Fair Wage Law, looks to federal law for guidance on such issues, and, as such, is in accord with the DOL on the issue of school volunteers.  Some states, however, are more restrictive.

Recommendations For Public And Private Schools

We advise all schools, both public and private, to audit their employee classifications to ensure that non-exempt employees, especially those with coaching and/or other extracurricular duties, are paid appropriately.  Specifically, we recommend a wage-and-hour compliance audit that addresses the following topics:

• Are employees improperly classified as exempt when they should be non-exempt?

• Are non-exempt employees being compensated for all compensable overtime hours (which may include holidays and weekends) at the proper overtime rate?

• Are individuals or employees who perform “volunteer work” appropriately categorized as volunteers under federal and state law?

• Are employees being paid in a timely manner?

• Are employees being paid for all time actually worked?

Please contact us if you have any questions about the Purdham decision, the volunteer rules applicable to your school or organization, or FLSA compliance in general.