Each year in the Fall, St. Louis hosts the ever-popular Rock ‘n Roll Marathon, which includes not only a 26-mile marathon, but also a half-marathon, a two-person half-marathon relay, a 5k race, and a health and fitness expo. The event is popular among runners and appeals to a wide variety of athletes, from the serious, hard-core marathoners to the “couch-to-5k” crowd, and everybody in between. In addition, the event is well-known for its music. The Rock ‘n’ Roll Marathon is a nation-wide phenomenon that has been stated in approximately twenty-four locations annually for the past two years.
Recently, however, the event has been the subject of legal scrutiny. On September 23, 2014, Saint Louis University School of the Law Associate Professor Yvette Liebesman (“Liebesman”), filed a class-action lawsuit in the U.S. District Court for the Eastern District of Missouri on behalf of herself and similarly situated individuals, against Competitor Group, Inc. (“Competitor Group”), which is a for-profit corporation that runs and operates the Rock ‘n’ Roll Marathon.
For each event, Competitor Group has relied on volunteers to perform various tasks including, manning water stations, giving directions, preserving barriers, keeping cars and pedestrians off of the running route, providing refreshments to participants, and escorting participants in the race. Volunteers are recruited with the understanding that they are helping charities and not-for-profit organizations officially associated with the races. However, according to the suit, Charities and not-for-profit organizations are required to pay Competitor Group a minimum of $1,650 or provide sufficient paying participants (a minimum of ten runners at $165 each in a given race) to be recognized in the Rock ‘n’ Roll Marathon events.
This lawsuit follows a Rock ‘n’ Roll race in St. Louis, Missouri in 2012, where Liebesman, among others, volunteered her time. In her lawsuit, Liebesman alleges that Competitor Group falsely led her and other volunteers to believe they were volunteering on behalf of the race’s charities. Liebesman states in her complaint:
Plaintiff and all those similarly situated, were ignorant of the fact that Defendant’s races had no charitable purpose and that instead, all volunteers and charitable organizations were providing Defendant with free labor for which it should have to pay, increased participation, and hence increased revenue. More simply, Plaintiff and those similarly situated did not, and had no way of knowing, that their role was to increase Defendant’s profit margins in a way not allowed under federal and state law.
The lawsuit alleges volunteers in the Rock ‘n’ Roll races are entitled to minimum wage under the Fair Labor Standards Act (“FLSA”) and Missouri Minimum Wage Law, and that Competitor Group was unjustly enriched by retaining labor for which it did not pay. In addition, Liebesman claims Competitor Group committed fraud by intentionally misleading volunteers to believe they were volunteering for charity, when it was profiting from fees paid by the charitable organizations. The suit seeks unpaid minimum wages, liquidated damages, attorney’s fees and costs, and other unspecified damages as allowed under Missouri law for the Plaintiff and other similarly situated individuals.
The Fair Labor Standards Act requires employers to pay minimum wages to employees for all hours worked. However, the FLSA exempts non-profit organizations from paying volunteers who donate services performed without pay. The Missouri Minimum Wage Law has similar exemptions. At issue is whether Competitor Group has a charitable purpose and thus exempted from paying its volunteers.
Looking forward, the outcome of this case may affect other organizations that produce charity-based events utilizing volunteers. For the time being, the lawsuit seeks certification of a nationwide class of individuals who worked in various capacities for Defendant’s races.