Paul Mendel was a police dispatcher for the City of Gibraltar, Michigan. When he was fired, he sued the City, claiming violations of the Family and Medical Leave Act (FMLA).
At the time Mendel was terminated from his position, the City employed 41 individuals, excluding its “volunteer” firefighters. According to the Fire Chief’s estimate, the City typically had between 25 and 30 volunteer firefighters.
The volunteer firefighters were required to complete training on their own time without compensation. While they were not required to respond to any emergency call, they were paid $15 per hour for the time they spent responding to a call or maintaining equipment. The volunteers did not work set shifts or staff a fire station; they maintained other employment and had no consistent schedule working as volunteer firefighters.
The firefighters generally received Form 1099s from the City, though they did not receive health insurance, sick or vacation time, social security benefits, or premium pay. The City pays its part-time Fire Chief $20,000 per year, and the Chief testified in his deposition that he “tries to work 20 hours per week at the [Gibraltar] fire station.”
The City’s response to Mendel’s lawsuit was that he was not an “employee” for purposes of the FMLA and FLSA. Under the statutes, “eligible employees” must work for an employer that has more than 50 employees. By not counting the volunteer firefighters, the City ended up below the 50-employee threshold.
The federal Sixth Circuit Court of Appeals rejected the City’s argument. The Court ruled that “to answer the question of whether reputedly volunteer firefighters fall within the scope of the FMLA’s definition of an employee, we must turn to the section of the FLSA that addresses this issue. The FLSA generally defines ‘employee’ as ‘any individual employed by an employer.’ In a slightly more illuminating vein, it defines ‘employ’ as ‘to suffer or permit to work.’
“Noting the ‘striking breadth’ of the FLSA’s expansive definition of ‘employ,’ the Supreme Court has stated that this definition stretches the meaning of ‘employee’ to cover some parties who might not qualify as such under a strict application of traditional agency law principles. The Supreme Court has adopted an economic reality test to determine whether an individual is an employee under the FLSA. Under the Court’s long-standing FLSA jurisprudence, the determination of the relationship does not depend on isolated factors but rather upon the circumstances of the whole activity.
“Here, it appears that the Gibraltar firefighters fall within the FLSA’s broad definition of employee. The firefighters are suffered or permitted to work, and they even receive substantial wages for their work.
“This is not the end of our analysis, however. In 1986, Congress amended the FLSA to clarify that individuals who volunteer to perform services for a public agency are not employees under the Act. Section 203(e) now includes a provision that the term ‘employee’ does not include any individual who volunteers to perform services for a public agency which is a State, a political subdivision of a State, or an interstate governmental agency, if (i) 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 (ii) such services are not the same type of services which the individual is employed to perform for such public agency.
“The question before us is whether the wages paid to the firefighters constitute compensation or merely a nominal fee. In the context of the economic realities of this particular situation, we hold that the hourly wages paid to the Gibraltar firefighters are not nominal fees, but are compensation under the FLSA. The firefighters do not receive a nominal amount on a per call or similar basis. Rather, they render services with the promise, expectation, and receipt of substantial compensation. Each time a firefighter responds to a call, he knows he will receive compensation at a particular hourly rate – which happens to be substantially similar to the hourly rates paid to full-time employed firefighters in some of the neighboring areas. Essentially, the Gibraltar firefighters are paid a regular wage for whatever time they choose to spend responding to calls. These substantial hourly wages simply do not qualify as nominal fees.”
The Court acknowledged that “the fact that the FLSA’s categories of ‘employee’ and ‘volunteer’ do not necessarily match the common use of those terms or popular perception in general has required us to reach a result in this case that is admittedly somewhat counter-intuitive. However, under the relevant authority and the facts of this case, we are constrained to hold that, simply put, the substantial wages paid to these firefighters constitute compensation, not nominal fees, which makes the Gibraltar firefighters employees, not volunteers, for purposes of the FLSA and FMLA.”
Mendel v. City of Gibraltar, 2013 WL 4105641 (6th Cir. 2013).