COMPETITOR GROUP (Rock'nRoll Marathon races) is SCREWED

Dkdjdjdjdndndn wrote:

As noted above, even events held by for-profit organizations can be exempted from the FSLA under 29 U.S.C. 213(a)(3)(A) if it is "an amusement or recreational establishment." Examples include "amusement parks,

So are you saying that Six Flags could use volunteers instead of employees as their labor force?

I am saying that your McDonald's example is not very good.

I also repeated 29 U.S.C. 213(a)(3)(A). You can read the statute for yourself. The language seems to support this.

Now think about this: who would actually show up everyday day after day to "volunteer" if money wasn't offered? Nobody. Nobody would work at Six Flags for free. Even if they weren't required to pay under the statute, the reality is that they need to pay people to get them to do those jobs every day.

The distinction here is that these are annual events (in that area) and people are obviously willing to show up for the day to set up tents or hand out water without expecting money. There is no need for a financial incentive.

Great point.

With the current IRS, who gets tax exempt status and who doesn't often has nothing to do with what the law says.

The answer to your question is quite simple. The law reads "an organization [B}must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3)". As we know from the CG, putting on races is NOT an exempt purpose. Some (most?) of NYRR's operations are in pursuit of this non-exempt purpose, which therefore means that it should not be a tax-exempt entity.

See, this isn't that complicated if you bother to read the statute and use that noodle of yours?

Also, why do you keep on referencing 401(c)(3)? I first thought it was a typo but then you did it 2 more times. Are you unable to keep track of statute numbers?

The language of the statue seems to say that certain groups are exempt from federal minimum wage laws:

29 U.S.C. 213(a)(3) - (3) any employee employed by an establishment which is an amusement or recreational establishment, organized camp, or religious or non-profit educational conference center, if

(A) it does not operate for more than seven months in any calendar year, or . . .

https://www.law.cornell.edu/uscode/text/29/213

So the group may be able to get around those based on the exception. State contract law could be a different issue, thus there may be a question of whether a "gift" or token award is consideration for a service.

What does tax-status have to do with this?

I work for a Fortune 100 company and can assure you if a group of volunteers showed up to do anything at our office they would be turned away.

A for profit is asking for trouble by using volunteers period. Non profits get away with murder as well. The local hospital in my area is an example. The hospital sponsors the local marathon and they pressure employees to volunteer to work aid stations. When I say pressure I mean you won't find yourself on the schedule next week if you don't volunteer. Definitely a welcome to the South moment when I heard that.

I agree that both the for profit events and the non-profit events abuse volunteers.

Many for profit events should pay volunteers, and stop deceiving runners into thinking the entry fees all go to charity.

Non-profit events often abuse volunteers, and would be better off if they contracted with entities and individuals to provide services. They also deceive runners into thinking all the money goes to charity, when much of it goes to the non-profit.

Discerning runners should look into where their entry fees are going.

Volunteers should look into who they are actually helping and what the events support.

The problem is that most runners or even volunteers do not care where the money goes.

There are enough gullible runners/volunteers out there that are willing to pay/do almost anything to be part of an "event". When it comes to running, its a seller's market where event directors can do whatever they want and still come out ahead. And the market will bear people paying high entry fees and also volunteers assisting others make $.

It is hard to find a simple open race anymore: with low entry fees, an accurate course/ timing, minimal frills and where the participants that want to run hard/compete benefit. Some open track or xc meets. Very, very few road races.

Most open running races are primarily event parties.

Very good point. Do you think it would be worthwhile to start a thread naming these types of races? Or is there a better source for this info?

The plaintiffs are people just wanting to profit? And you blame them for that wrong accusation, but you don't apply it to Competitor, which is a for profit organization deceiving people to volunteer under the idea that they are serving a charity. Work for profit must be paid. If this case were frivolous, it would not have gone forward. This could happen to no better group of people.

I guess I never paid attention to how blatantly they advertise the charities in these things.

Also, the reason stated for trying to improve this is because of negative public reaction... nothing to do with any actual regulation violation. And nothing to do with "hey we're sorry for outright lying, and thanks to the volunteers who saved us even MORE money that also will not be going to that cause."

All "for profit" organizers will have to do is add something to the small print in a volunteer's waiver confirming that proceeds from the event may be used as profit.

I am not a lawyer but the waiver could say something like

Although events organized by said organization have raised over $300 million for charity and some proceeds which exceed costs will be donated to charity, the volunteer will acknowledge that although their contribution may support raising money for charity the said organization is not a not for-profit company.

jjjjj wrote:

The plaintiffs are people just wanting to profit? And you blame them for that wrong accusation, but you don't apply it to Competitor, which is a for profit organization deceiving people to volunteer under the idea that they are serving a charity. Work for profit must be paid. If this case were frivolous, it would not have gone forward. This could happen to no better group of people.

The plaintiff at this point is a law professor. That is all as far as I can tell. She volunteered twice in two years, so let's say 16 hours total. The minimum wage is $7.50 in this jx so the damages specific to this plaintiff are around $120. So no profit there.

Now, the attorneys are the ones I am saying are who are going to drive the case here. I did not say that Competitor is a good guy here. If people are saying that Competitor is bad for wanting to profit without trying to support a cause, then I don't see why the same concept doesn't apply to hungry trial attorneys.

The equivalent in the IP world are patent trolls. They will file a suit, complete discovery (which takes no time for the plaintiffs but they will demand the defendant produce every document known to man (so as to waste time and money). The cases usually never make it past summary judgment because it is much cheaper for the whales/defendant to pay a couple hundred grand to get the monkey off their back, so to say.

All that is needed is an allegation that states facts, if accepted as true (they need not be), could support a statutory claim. So the fact that the case wasn't dismissed (their motion to dismiss was without prejudice so they can try again but will fail - I read the complaint and it is sufficient for notice pleading in as USDC) simply means that the court takes everything in the complaint as true, and asks, could there be a case here? So the lack of dismissal is hardly persuasive.

The reality is that plaintiff's attorneys who are known for class actions behave a little differently from your average attorneys. Think about those commercials you see on TV. If you don't believe me, then that is ok with me. My wife worked for one of these firms for a short period and left almost immediately because of the atmosphere there. A lot of times the ethical bounds are being stretched and if they don't want to play ball they hire somebody else. Don't be mistaken - defense attorneys would be out of a job without this sort of affair. They can bill a ton of hours instead of wanting a contingency fee.

From what I read the court has not yet granted a class cert. If the attorneys fail to do this, they will walk away faster than a RnR marathon winner.

Just read that plaintiff is being represented by SIMMONS AND HANLY LLC. They specialize in asbestos and mesothelioma class actions and medical device claims. Exactly the type of firm I described above, and is literally the firm that plasters advertisements on TV.

http://www.simmonsfirm.com/

Make what you will of that.

Also, Competitor is represented by COOLEY, LLP, which is a very well respected firm. So we know they are paying about $500 an hour and have no problem dipping into the war chest. Big money.

Should be a good fight.

Competitor very stupide.

Oil companies succeeded in getting people to pump own gas.

Supermarkets make people check out own groceries.

Marathoners should get their own dam water.

It might not be all that clear, but Competitor, 13.1 series, and other for profit races will pay up if the groups they sucker into running the aid stations play hard ball. My club generally gets $400-$500 to run a relay exchange or water stop for these races in a major American city. They tried to shut us out one year but crawled back about a week from the race because they couldn't find a church or whatever to do it for free.

Mr Fortune 100 wrote:

I work for a Fortune 100 company and can assure you if a group of volunteers showed up to do anything at our office they would be turned away.

A for profit is asking for trouble by using volunteers period. Non profits get away with murder as well. The local hospital in my area is an example. The hospital sponsors the local marathon and they pressure employees to volunteer to work aid stations. When I say pressure I mean you won't find yourself on the schedule next week if you don't volunteer. Definitely a welcome to the South moment when I heard that.

Now THIS is some BS.

Hopefully I can avoid being flamed for spamming or talking about the purpose of the lawsuit . . . I did come across some numbers. They are interesting.

According the a non-competitor group marathon (Fargo Marathon Experience), there were 2500 volunteers for a race of over 20,000. For simplicity let's say that for every 8 runners there is one volunteer.

Then let's say that 3000 volunteers worked at a Competitor group marathon for an average of 6 hours at $10 an hour (in Missouri it's $7.50) then it would come out to:

3000*6*10= $180,000

That is actually very small!

Considering that the race pulls in around $120 per person at 20k applicants, the total revenue is $2.4 Million. Even after expenses and insurance, I believe that the races could absorb the wages or (more likely) increase the prices a relatively small amount ($10 per applicant).

So I admit that my fears of large price hikes were unfounded. The increase would be modest, and the "volunteers" would be paid (even if we account for the cost of hiring 3,000 people, taxes, and insuring them).

I think this would be a good balance for all stakeholders.

Competitor Group should just offer internships for college credit to hand out water during their races. This would be a way to get volunteers and not get in trouble for it!

Random Runner Dude wrote:

Lawsuit about unpaid wages for volunteers moves forward:

http://www.runnersworld.com/races/race-volunteers-lawsuit-against-competitor-group-will-go-forward

If I were a race director, I'd be very careful about not paying my volunteers...

This is gonna be interesting.

Well first the lawsuit would need to go against Competitor. Lots of friends of the court briefs would be coming from the PGA Tour, MLB, etc.

Also, it would only apply to events run by FOR PROFIT entities. The local YMCA Turkey Trot would not be affected.

I also think from what I have read that since this is a long standing practice the court will weigh that.

To me it is silly on the face of it unless the person was somehow coerced, but even then it would seem like the issue would be with the folks coercing the plaintiff. To me a person who agrees to do this is understanding that his/her time is being given freely. If a person worked for a company that required its employees to work an event, then this should be between the employee and the company not Competitor.