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Local attorneys win key FLSA 6th Circuit appeal





SHERRY KARABIN

Legal News Reporter

Published: June 18, 2018

Roderick Linton Belfance attorneys William Chris, Lawrence Bach and Todd Mazzola, who recently won an appeal to the 6th U.S. Circuit Court of Appeals against the Department of Labor, are asking the government to repay the legal expenses their clients incurred during an extended court battle over whether members of a Cuyahoga Falls church were permitted to volunteer at the church’s buffet restaurant without pay.

On April 26 the attorneys, who represented Grace Cathedral church leader and televangelist Reverend Ernest Angley and the church’s for-profit restaurant, Cathedral Buffet, filed a petition with the 6th Circuit under the Equal Access to Justice Act seeking to recover attorney fees and other monies for their clients.

“The EAJA allows a private party who prevails in litigation against the federal government to recover attorney fees unless the government can demonstrate that its position was substantially justified,” said Roderick Linton Belfance principal Chris.

Initially filed in the northern district of Ohio in August 2015 by the U.S. Department of Labor’s Wage and Hour Division under the direction of Obama Administration Secretary of Labor Thomas Perez (Perez v. Cathedral Buffet, Inc. et al), the Fair Labor Standards Act (FLSA) lawsuit charged Reverend Ernest Angley and Cathedral Buffet with several violations, including failing to pay the federal minimum wage to 235 church members who volunteered at the buffet restaurant between 2012 and 2014.

The suit sought more than $388,500 in unpaid wages and liquidated damages.

Chris served as lead counsel during the district court bench trial, along with Bach, a principal at the firm, and of counsel Mazzola.

“First of all, it is important to note that the buffet did have a full-time paid staff and while it was designated as a for-profit entity, the truth is that the church was losing money by keeping it open,” said Chris. “These facts were stipulated at trial.

“They charged customers a small fee for a meal. It was really about providing church members a place to gather and dine on the church campus and giving the church and its members a way to interact with the local community by providing wholesome buffet-style food at a church-subsidized price,” Chris said. “The volunteers generally only helped out on weekends and holidays.”

Chris said during the trial they discovered the volunteers did not initiate the complaint.

“Instead the Secretary of Labor commenced his investigation, and ultimately decided to file the suit, based upon the review of one of a series of articles written by Akron Beacon Journal reporter Bob Dyer and subsequent department interviews with another 14 individuals.

“The Secretary also presented a theory that was developed after filing his complaint that the volunteers were ‘spiritually coerced’ into volunteering,” said Bach. “The Secretary advanced this coercion theory chiefly through the testimony of four former church members, who testified that Reverend Angley would solicit buffet volunteers from the pulpit during church services.

“These witnesses testified to various degrees that Reverend Angley made them feel that refusing to volunteer at the buffet was akin to failing God.

“It is important to understand,” said Bach, “that these four witnesses testified that they were testifying concerning only their personal situation. The district court had the testimony of 134 volunteers who unequivocally testified that they did not volunteer because of pressure or coercion.”

On March 29, 2017, U.S. District Court Judge Benita Pearson ruled in favor of the DOL, determining the volunteers should have been considered employees and ordering the defendants to pay $388,507.90 in unpaid wages and liquidated damages.

Mazzola, Chris and Bach filed an appeal with the 6th U.S. Circuit Court of Appeals.

“It was not just the $388,000 judgment that motivated our clients to appeal, or even the injunction that the district court issued,” said Chris.

“The district court’s judgment effectively overrode the volunteers’ own free choice and told the church and its volunteers that their sincerely-held religious beliefs were not worthy of protection or even recognition.”

In early December 2017, a three-judge panel of the 6th Circuit heard oral arguments in the case now known as Acosta v. Cathedral Buffet, Inc.

On April 16, 2018, the judges unanimously reversed the lower court decision.

The opinion states “Congress’s primary goal in enacting the FLSA ‘was to eliminate, as rapidly as practicable, substandard labor conditions throughout the nation.’

“But although the FLSA might aim to curb the societal ills caused by low wages, it does so through a comprehensive system of economic regulations. The Act does not go so far as to regulate when, where and how a person may volunteer her time to her church. After all, the giving of one’s time and money through religious obligation is a common tenet of many faiths.”

Scott Allen, a spokesperson for the DOL, said the agency “does not comment on the outcome of court proceedings.”

Mazzola, who briefed and argued the case to the 6th Circuit, said that during the appeal and the bench trial both sides supported their arguments by citing the April 1985 U.S. Supreme Court ruling in Tony & Susan Alamo Foundation v. Sec’y of Labor.

The case involved a nonprofit religious organization, which staffed its commercial businesses with “associates,” most of whom were recovering addicts and reformed criminals. They received food, shelter and other benefits for the work instead of payment.

In the foundation case, the high court determined its “associates” were employees and entitled to compensation under an “economic reality” test based on their receipt of benefits, rejecting arguments that applying the FLSA to the associates violated the Free Exercise and Establishment Clauses of the First Amendment.

“In our case, the Secretary of Labor argued that the Supreme Court's decision in Alamo meant that the defendants could not rely on the volunteers’ religious motivations or the fact that the volunteers considered themselves to be volunteers to avoid application of the Fair Labor Standards Act,” said Mazzola. “We argued that where religiously-motivated volunteerism is at issue, the Alamo case explicitly requires that the individual work with an expectation of compensation or for compensation in fact before he or she may be considered an employee.

“It was uncontested that no church member volunteer expected compensation for volunteering at the buffet,” Mazzola said.

“Because the parties had stipulated that no volunteer had any expectation of compensation, and because no church member volunteer was demonstrated to have any economic relationship with the buffet, the 6th Circuit panel concluded that the district court had improperly used the argued spiritual coercion as a proxy to find an employment relationship between the volunteers and the buffet.”

Chris said the 6th Circuit decision is a victory for “free choice, freedom of religion and against government overreach.

“The court of appeals has told the DOL in no uncertain terms that it must respect a church volunteer’s own choice to give his own time to further the organization’s mission without a government authority second-guessing whether the cause is worthy of that individual’s free labor,” said Chris.

Cathedral Buffet is no longer open to the public.

As of the publication of this story, the DOL still had a large window in which to petition the U.S. Supreme Court to review the 6th Circuit’s decision. If that doesn’t happen, the petition seeking almost $200,000 in attorney fees and other costs against the DOL will proceed in the district court.

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