In Greenfield v. Dep't of Labor & Indus. of State, No.57156-1-II (Wash. Ct. App. Jun. 21, 2023), the court found that a intake counselor for the ACLU who worked on a volunteer basis for almost a year was not subject to the Washington Minimum Wage Law. As a volunteer working for a non-profit, he was exempt from the statute and the ACLU could not be held liable for refusing to pay him or offer him a future opportunity or employment.
Background Facts
Rhett Greenfield moved to Washington in 2017, and began his search for a new job. As part of his search, he looked at the American Civil Liberties Union (ACLU) website and applied for an intake counselor internship. The internship was in the website’s "Careers” section. It was advertised as a part-time position with a weekly hourly requirement of 12-16 hours. The posting did not list an amount for compensation or wages of any kind. Although Greenfield indicated during his interview that he would like to work full-time for the ACLU, he was never promised or offered a full-time position. Compensation was never discussed and Greenfield never asked about pay.
The internship was offered to Greenfield and he accepted. He interned two days a week. mostly manning an intake line and providing community resource information to members of the public. The ACLU described the intake line "primarily as a community resource and not integral to ACLU's operations." All intake counselors were either volunteers or interns. Training and orientation was provided to all intake counselors to ensure they were equipped to answer questions presented to them by members of the public.
Greenfield did not fill out any onboarding forms that are typically a part of beginning a position for paid employment, nor did he report hours. Despite this, he claimed he believed that he was an employee "training for full-time employment at the ACLU." He further believed he would receive legal training that would benefit his plans to someday work as a legal professional, and claimed that the ACLU never attempted to correct this "misunderstanding." Throughout the internship, Greenfield continued to relay to his supervisor that he desired full time employment.
Greenfield filled out an evaluation form at the end of his approximately six-month tenure, and contended that was the first time he saw the intake counseling position referred to as a volunteer position. Greenfield applied for two other paid positions at the ACLU, but was not selected.
After the internship, Greenfield filed a wage complaint with Washington State Department of Labor & Industries (L&I), stating that he "worked at the ACLU-WA as an intake counselor, an unpaid internship that I believed would lead to a full-time position at this specific employer. I was never paid, nor was I hired. None of this was consensual." He did not state the amount of wages he felt he was owed by the ACLU.
A representative from L&I advised Greenfield that her investigation revealed he had an unpaid volunteer position with the ACLU, which was permissible for the non-profit organization. She also informed him that his performing the duties of intake counselor amounted to consent to perform the volunteer work. The representative also cited the facts that he was never given a wage agreement and, in fact, never received any pay in that time period, and gave him the option of withdrawing his complaint. Greenfield refused, citing L&I's Administrative Policy ES.C.2 (2008), which lays out seven criteria distinguishing employees from interns. He argued that the position he filled at the ACLU did not meet the criteria to classify him purely as a volunteer.
In April 2020, L&I recommended a Determination of Compliance in the ACLU’s favor. Greenfield appealed to the Office of Administrative Hearings (OAH). The ACLU was granted an intervention. After a two-day hearing at the OAH, that body agreed with the determination made by L&I and also agreed with the ACLU's position in the case.
Greenfield appealed the decision in superior court, where the court again affirmed the decision of L7I and the OAH. It found that substantial evidence supported Greenfield's status as a volunteer and that he fell under the MWA’s clear exemption for volunteers. Greenfield appealed the superior court's decision.
Washington's Minimum Wage Act (MWA)
The MWA in Washington is modeled after the federal Fair Labor Standards Act (FLSA). Because of this, courts "may consider interpretations of comparable provisions of the FLSA as persuasive authority." Kilgore v. Shriners Hosps. for Child, 190 Wn. App. 429, 435, 360 P.3d 55 (2015) (quoting Innis v. Tandy Corp., 141 Wash.2d 517, 524, 7 P.3d 807 (2000)), but they are not bound by federal interpretations. Drinkwitz v. Alliant Techsystems, Inc. 140 Wn.2d 291, 298, 996 P.2d 582 (2000). The purpose of the MWA is to ensure that Washington workers' rights are protected and they are paid at least minimum wage for their work. Any exemptions to the law are narrowly construed.
Importantly, and of primary relevance in the case at hand, the MWA generally does not apply to non-profit organizations when there is no employer-employee relationship or where an individual provides gratuitous services to the nonprofit organization. RCW 49.46.010(3)(d).
L&I interprets RCW 49.46.010(3)(d) by way of the Code of Federal Regulations to define individuals who provide "gratuitous services as volunteers" under its administrative policy. Volunteers include those who offer their services “freely and without pressure or coercion, direct or implied, from an employer. Individuals who volunteer or donate their services, usually on a part-time or irregular basis, for public service or for humanitarian objectives, and are not acting as employees or expecting pay, are not generally considered employees of the entities for whom they perform their services." Admin. Pol'y ES.A.1, at 3-4; see also 29 C.F.R. § 553.101(a), (c) (2022).
Application of MWA to Interns and Trainees
Under the MWA, an “employee” includes “any individual employed by an employer.” RCW 49.46.010(3). An “employer” is “any individual, partnership, association, corporation, business trust, or any person or group of persons acting directly or indirectly in the interest of an employer in relation to an employee.” RCW 49.46.010(4). To “employ” includes “to permit to work.” RCW 49.46.010(2).
In determining whether an individual qualifies as an employee under the statute, courts generally employ the "economic dependence test," which examines "whether, as a matter of economic reality, the worker is economically dependent upon the alleged employer or is instead in business for himself." Hopkins v. Cornerstone Am., 545 F.3d 338, 343 (5th Cir. 2008). If an exemption applies, the courts do not need to apply this test in reaching a decision. Some interns and/or trainees are not considered employees if they work "without promise or expectation of compensation[.]" Walling v. Portland Terminal Co., 330 U.S. 148,152, 67 S. Ct. 639 (1947). Under these circumstances, the court will examine which party is the primary beneficiary of the relationship in making a decision as to whether an employer-employee relationship exists. "Accepting the unchallenged findings here that the railroads receive no ‘immediate advantage’ from any work done by the trainees, we hold that they are not employees within the Act's meaning.” Id at 153.
Federal courts use a seven-factor primary beneficiary test to determine whether interns and trainees are employees under the FLSA:
- "The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee[.]
- The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
- The extent to which the internship is tied to the intern's formal education program by integrated coursework or the receipt of academic credit.
- The extent to which the internship accommodates the intern's academic commitments by corresponding to the academic calendar.
- The extent to which the internship's duration is limited to the period in which the internship provides the intern with beneficial learning.
- The extent to which the intern's work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
- The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.”
Benjamin v. B & H Educ., Inc., 877 F.3d 1139, 1146 (9th Cir. 2017).
Greenfield argued that L&I attempted to place a blanket exemption on all non-profit organizations, and tried to persuade the court that he did not intend to provide gratuitous services, but took the internship only because he thought it would lead to a full-time employment offer. Despite Greenfield’s contentions, the evidence showed that he did in fact provide gratuitous services to the ACLU, which is a nonprofit organization. Thus, the court concluded that this situation qualifies as an exemption under RCW 49.46.010(3)(d). Therefore, the ALCU did not violate the law by not paying Greenfield.
Additionally, Greenfield did not bring evidence that he was promised a salary, but instead admitted that he neither inquired about pay nor filled out any employment forms such as a W-4 or I-9. Although he worked in the volunteer/internship position for almost a year, he was never paid and never received a pay stub. This tends to show that he was not performing his role at the ACLU with an expectation of payment.
Greenfield's subjective beliefs about his position and potential future employment were not enough without more evidence to prove his contentions. Merely expressing a desire to work at the ACLU full-time at some point in the future did not entitle Greenfield to a legally sustainable financial interest in doing so. The court held that he was not an employee under the plain language of the MWA and he was exempt under the plain language of the statute, RCW 49.46.010(3)(d).