The current financial crisis has left non-profit organizations turning to volunteers as a means of dealing with technology services, program development, staff training or even fundraising. Such bold use of volunteer support may soon have the unanticipated effect of transforming non-profits into “employers” for the purposes of discrimination claims brought under Title VII of the Civil Rights Act 1964.

Title VII is a Federal anti-discrimination law that covers employers with 15 or more employees and prohibits discrimination on the basis of race, color, religion, sex or national origin. As with other Federal employment discrimination statutes, such as the Age Discrimination in Employment Act and the Pregnancy Discrimination Act, the term “employee” is not clearly defined in the legislation itself. Typically, US courts have looked at whether an “employee” is on the payroll (or is receiving “significant remuneration”) as a threshold inquiry; however, at least one court, the Sixth Circuit, recently broke new ground by holding that remuneration is only one factor in establishing an employment relationship. In Bryson v Middlefield Volunteer Fire Department a volunteer firefighter brought a harassment claim after she alleged that she had been subjected to unwanted sexual advances by the Station Fire Chief. The Fire Department, a non-profit organization, argued that she was not an employee for the purposes of Title VII because she received only de minimis benefits for her services. The Sixth Circuit disagreed. It said that remuneration is only a factor, not a controlling factor, in establishing an employment relationship, and that the Courts should also examine the degree of control exercised by the employer over the means and manner in which the work is accomplished.  

This issue is most likely to arise when an organization claims that it is not subject to Federal employment discrimination laws because it does not have the minimum number of employees necessary to trigger their application. Although Federal courts have uniformly concluded that uncompensated volunteers are not “employees” and therefore are not entitled to protection, under the Sixth Circuit’s new precedent, volunteers and presumably other unpaid workers (e.g. interns, graduate students, co-op participants) may soon be incorporated into the employee tally, bringing an unsuspecting “employer” into the purview of Title VII. Employers should also be aware of any obligations they may have under State law, as most US States have their own anti-discrimination statutes, which typically cover smaller employers too.

In light of this decision and because this area of law is still developing, employers should exercise caution before augmenting their staff with volunteers or other unpaid help.