claremont ripley from the north carolina justice center and i'm here with my colleague carol brought up on behalf of appellant gregory armento the primary question before you today is whether mr are meant to was an employee or a volunteer when he performed unpaid bunkum community christian ministry or a b c c m under the north carolina wage an hour act according to the supreme court and tony and susan a llama foundation the secretary of labor the appropriate test for distinguishing between an employee and a volunteer is to look at two factors whether mr are meant to work in contemplation of compensation and whether he volunteered for his own purpose or pleasure or was somehow coerced to volunteer conclusions entitled to de novo review and i'm here to answer your questions but if i have time there are three things i'd like to cover in addition to why the a llama test is correct st is that when someone is considered an employee they are entitled to all of the x protections unless an exemption applies and there are no political exemptions here nd is that the primary beneficiary test is not appropriate but under a proper application of that test mr mental as an employee and finally i'd like to talk about how the relationship between mr mento and a b c c m falls within the purpose and the scope of the act and therefore the approach from steelman the hearse and that analysis is not appropriate either so turning st the alarm a foundation there the supreme court said that a volunteer is an individual who without promise or expectation of compensation but solely for his personal purpose or pleasure works and activities carried on by other persons either for their pleasure profit the trial court made only one reference to a lot for the proposition that an individual's understanding as to whether he would be compensated may be relevant in determining their employer volunteer status and because the court found that mr mesereau knew his service hours would be unpaid if it did not do any further analysis of those factors but in a llama zero the foundation residence of the supreme court found to be employees also did not expect to be paid they in fact said they did not want to be paid and they testified that they had no expectation of receiving a paycheck however the supreme court said that they were still working  expectation of contemplation because they worked in expectation of receiving room and board from the foundation the same is true here and that supported by that as in the factual findings from the trial court that mr mental received free room and board and that he performed those service hours to continue receiving that free room and board because if he did not perform them he could have been kicked out of the shelter where he lived the trial court also made the other  hire people to work for it then it became a business and i mean i recognize that it's a nonprofit but that does not mean that it doesn't have to operate and to keep its business running so i mean i know that that pm has has brought up this argument that it's not a market based exchange of labor but but mr are meant to work for them for pay he did not pursue other jobs while he was working for them for pay because he thought he was employed so i comply with the rules they could be kicked out and service hours were one of those rules or one of those requirements it is true that a rd of americans have to be at faith the right they bear their paperwork to say that they could be elsewhere but the service hours that mr armento performed at were at a b c c m and that is the only issue that is before the court i think i think weather service hours performed elsewhere might be legal it is a different issue in this court doesn't have to side that well no it's not it's not fair not deciding the factual question that the reason it's relevant is because it helps us understand whether that's a requirement that your are working to earn your room and board or whether at work requirement it's related to the rehabilitation rather than to some sort of way to pay for and for your room at the shelter i understand your honor but there is no exception from the ways in iraq excuse me that also recognizes that that work can be both rehabilitative and employment and it goes back to that issue that if there's an employer employee relationship that mr armento is protected is entitled to protection unless an exemption applies there's also no exemption for nonprofits under the wage now right there's not an exemption just because a b c c n n was doing good charitable work once they entered into this economic relationship with mr mentos they are they have to comply with the the rules and under a lot of foundation mr meant so was their employee there's there's another there's an important distinction i think so but tween this case and a llama foundation and that is that alonso was under the fair court put on commercial activity and the application of the act is is not useful here in determining whether you floyd the other test that is useful is the economic realities factors that this court laid out in shultz adopting supreme court factors from long ago and u s b still and in that test i think it's very useful when we look at this tremendous actual paid employment the time that he spent at the front desk working according to a schedule time that c m considered him an employee under a supervisor filled out employment forms if you look at the economic realities factors he was clearly an employee during that time period in an employee employer relationship and those service hours those front desk hours the time spent working at the front desk as paid employment was absolutely indistinguishable from his front desk work that was considered service hours the only difference was whether it was paid or not and in fact whether it was paid or not was up to how a b c c m classified it and they could they could even reclassified retroactively there's a spreadsheet included in the judge at the trial court's findings  fact and a discussion about the operations manual manager reclassifying some of his hours as service hours or is not service hours afterwards so the fact that he was already in an economic relationship according and economically dependent according to those felt factors when he was working at the front desk so that all of his time working at the front desk should have been considered employment at like to quickly turn to the primary  test which the lower court discussed because that test is not appropriate here for the same reasons i've been saying that mr r meant to was compensated and the supreme court said that without a d for the actual wages he did receive but really determined not by just what the testimony is or just one i believe there is there are facts in the record showing that he was paid nine dollars an hour there's actually stipulations that he the question about his compensation he's going to be paid for every dollar he works well i don't think it doesn't have to be that he's going to be paid for every dollar he work well i'm not that's what your whole claim was about really we are asking that he be paid for everything that is considered work under the wage and hour act but when they're incompetent i thought you also said to us that what we look to is what he compensated she's going to do what he believes he's going to pay for that seems to me that can't be the standard right no i don't i don't think that is i was actually saying what he believes he's going to be paid is not as important as what actually happened and that's what the a lot of court looked at those residents did not believe they were going to be paid but they were still employees because of the compensation that they received for their work here we dispute the finding that mr momento knew he was going to be working for free but but that's immaterial actually because he was in fact compensated at nine dollars an hour for some of its time and for the rest of its kind he was still compensated in the form of room and board according to the supreme court that's the same as wages why was the several offered you know you're right it has to be a contract there are all kinds of regulations the regulation say that furnishing room and board and other facilities can't count as wages but there are certain requirements  there's another factor from the lama foundation that i don't know that i've mentioned the importance and that is whether he actually was working freely and volunteer and freely or whether there was some sort of back economic coercion and that again the fact similar factors and bench off the city of virginia beach where firefighters said they should have been played for volunteer time and the court said well they weren't required and they were asked to do that time so so they weren't coerced to volunteer the opposite is true here mr mental was required to perform service hours therefore if the court should find that he wasn't really volunteering that time thank you counsel they the other thing i wanted to say not controlled or required by the employer that's another framing we can look at and say that his time spent performing the service hours which were integral and essential to the running of the a b c theater seltzer world work that should be a case involved to remember partners who operated business together defendant was the sole proprietor plaintiff will hold time for the business and when the relationship ended the plaintiff sued claiming among other things that she was entitled to back pay under the earlier standards act this court said that when considering the question of whether someone was an employee for purposes of the fair labor standards act with court must look to the economic realities of the situation the standard calls for pragmatic construction of the concept of employment were must therefore look broadly to the circumstances of the whole activity rather than two isolated factors or technical concepts  also specifically rejected the use of the six factor test used in the independent con factor contacts and the one that the plaintiff is advocating or your own you'll counsel if i could ask you if we do not have a volunteer employer contact and we don't have an independent contractor employer context how would you characterize the pla no court said this relationship that we have here we don't know what to call it we don't know what it is but we know what it's not it's not an employer employee relationship so whenever we answer that question we don't have to specifically answer what the relationship questions the st question is whether the relationship parties have deviated from the traditional understanding of employment in fundamental ways does the court will not shoehorn that relationship into the had second question is whether the application of the act to the relationship will advance the x objectives so turning to this case asking the st question looking at the totality of circumstances what makes this relationship different from the traditional employment relationship first this is an artificial job market created specifically for participants of the work rehabilitation programs or in times of shorter's community volunteers no one hears displacing a bonafide applicant desiring to sell their services at prevailing rates nobody here is working for any profit making activities everyone's working for the nonprofit branch of competitive job market the indispensable prerequisite for this job the history of homelessness this is highly suggestive of a lack of employer ability you know marketplace back to work evidence shows the work could be done more efficiently and effectively by a b c c m volunteers also not in a competitive job market one is not normally gauge an individual in order to rehabilitate instead of terminating problematic employees they receive skilled counseling program relentlessly pushes workers to find outside employment the term engagement is fixed that's two years no matter how efficient they become the replaced by someone who's not nearly as efficient and the whole cycle starts over again and they come in they're told these are unpaid hours this is not a bargain for exchange for labor or mutual economic gain they're told that at the outset biggest difference between this job and normal job is you don't even have to do it you can opt out of it by working for someone else you can opt out of by just going to school which are minnows doing well is what he did when he left the program you can get out of it by volunteering for another organization here are meant to was excused from the program altogether even though none of those exceptions applied to him for about seven months because the program was so concerned with his lack of progress finding  standards act a policy of the north carolina wage an hour act is to protect those who is a matter of economic reality or in that upon businesses to which they render service entire purpose of the service hours program is to transition sorry paying participants to stay in the shelter visitations the participants are more likely to remain outside of the enfranchise workforce in marginalized from the general public doesn't turn directly contradicts the larger golden towering that if they had to start paying people for service hour work the st thing that would happen is they would reduce their services of no longer have for example the shuttle service because they don't need it to qualify for the g p d  funding it would result in community volunteers doing all this work they would be the ones coming in and cooking for the residents and cleaning up after all this result in a surplus of time i'm home the least employ of all residen q which in turn would lead to an exacerbation the mental health and substance abuse issues that led so many of these people to this place and in the st place i sing a program that helps homeless veterans transition unfair competition that arises from businesses cut their pay it's business cut the cost of paying low wages participants in the program are not displacing a bona fide applicant desired to sell his services prevailing c m any kind of advantage in a commercial or marketplace activity another point is that minimum wages are not necessary to maintain a minimal standard of living for these residents basic needs are met here irrespective of their ability to pay and i would refer the court to the discussion in the bensky v peters case the th circuit case we've cited there it's a prison labor case where the court decided f not improve their standard of living the standard of living was set by their living space that similar here the standard of living is provided for those minimal standard of living that they that these laws are intended to protect our set by the number of other programs have come to a b c c m and they base their program what they've seen there so apply in north carolina wage in aarakshan programs this program would result in the application of  whether this relationship deviates in a fundamental way from an in the traditional employment relationship and most certainly does that's not resemble a traditional application the act of as we just discussed would not further the purposes of the act and in fact would probably contradict the purposes of the act on some level i would like to touch on one point here he talks about a new player said if it didn't do service hours you'd get kicked out but that's not necessarily true as we've discussed there's a lot of ways to not form service and as we sort of conclude near the conclusion of our presentation i'd like to emphasize a few key facts that are critical throughout the analytical framework of this case st of all ten and an opportunity to help develop self sufficiency and self determination on the other side of the coin veterans restoration quarters did not open its doors to reg armento because they were looking for employees there simply was not the same exchange of labor for wages as there is in a true employment relationship and trying to force this situation into the definition of employment under the north carolina wage analysis act is like trying to fit a square peg through around hole in other words to say that the economic realities of the situation amounts to climate is really this regard reality to a great extent according to reverend scott rogers the executive director c m and one of the founders of the veterans restoration quarters back in the late  in off the streets to provide shelter and stabilization and to facilitate self sufficiency and self determination in addition to providing shelter this larger mission involves addressing physical and mental health conditions substance abuse isolation and a variety of other conditions that led to their homes and as for the service hours program in particular he says that it is like again part of residents rehabilitation it's about the opportunity to teach them both healthy ways to relate with each other each them how to be responsible and how to have healthy living standards in their own lives with regard to the and that was with regard to the provides us with a way to give residents a temporary employment along with a brief work history and we can responsibly and with integrity say to employers that they have been able to perform these duties and those duties and it gives them confidence that they can have these residents on their job site and these programs are successful recall that all of the residents of the veterans restoration supporters a prerequisite for their becoming a resident there is homelessness so everybody there came there from a place of homelessness and yet as dr reverend rodgers points out eight out of ten of them leave the veterans restorations corders in two years or less with stable income and permanent housing and considering where they've come from not just in a place of homelessness but all of the other factors physical and mental illness that's been untreated other conditions that lead them to the place of pomona's homelessness where they were is a major accomplishment that that that type of a success rate and to force again to force that the square peg of the situation through the round hole of the legal definition of employment of be  this rate a program that has proven to be effective for countless homeless veterans for over three decades and mr dunlap alluded to this bill when asked what would happen if a b c c m were required to pay minimum wage for service hours robin rogers said there just isn't funding to pay for that and so when there isn't funding what they do is they deploy their community volunteers so you would have this absurd result where the residents who are the ones in need of structure and community and a sense of purpose  engagement are left to sit idle while community volunteers come in and maintain the place cook the food clean up and do the things that morning to reverend rogers is the very purpose of having these programs for the considering the issues in front of it and state that under scholtz the shots factor barbershops test this court should provide a de novo review for the legal questions that test that looks exactly at what and in lawyer employer relationship is in a similar situation to what we have here and in a llama foundation the court looked at the economic realities of relationship between the parties and said that where or where there is an economically dependent relationship in which there is an element of economic coercion and an expectation of compensation in the form room c m required mr mentor to do identical work that was unpaid and a b c c m determined in fact when it would and would not pay during the same work with the goal of their unpaid work program don't matter if admirable but a b c c m is a charitable organization that provides important services to the veterans community in asheville but what matters as a matter of economic reality is that mr arm and so was their employee there was a bargain for exchange here he performed many hours of work each week for pay but even when he did not perform week work for wages he performed work and the expectation that he would continue to receive room and board from a b c s good a b c sam provided room and board for persons who did not perform paid work for them yes they certainly did that's not the issue in front of the court but if the court does want to consider that issue it should follow the alamo foundation holding as well and look again at whether there is an economically dependent relationship based on the expectation of compensation in the form of rimmon board and an economically coercive situation here with a home with population of veterans who are needing to leave the shelter within a specified time period they are clearly economically in need and economically dependent on the shelter for their room and board so such time as they leave but but is not interested in a record he your point could go work for somebody else and that would be fine with the board yes your honor that's correct he could work for another organization although the record does not show that many people do that but he could have done so however if he had done so then he would not have been in an employment relationship with a yeah here he did work for a b c c n n he did work that furthered their mission he did work in expectation of compensation from them that he could have received that compensation without working for them directly is is immaterial the fact is that he did work for them he said there has been some discussion of whether the fact that the work was not available in the competitive job market is an issue and  i would submit that usually those discussions are in the context of whether the fair labor standards act is involved whether there is interstate commerce involved and that's not an issue in this case we're talking about the north carolina wage an hour after because armistice work was essential to a b c s mission as a nonprofit it was part of their job market they said that they would have to find someone else to do the work if you did not do it whether it be a volunteer or somebody who they hired the work would have to get done and so and so if it was work that was essential to their operations and but act was intended to cover it back to certainly intended to cover these relationships with unequal bargaining power and the situation of a homeless veteran who is dependent on an organization for his very survival in some instances surely shows and surely is intended to be covered by the fair labor standards act and i don't know how these persons need a place to live and they need a wage that allows them to eventually move out and be self sufficient in terms of the chilling effect the judge rushing i believe asked about there is nothing to stop any c c m from using community volunteers community volunteers would not be in an economically coercive relationship with a b c so yeah they would not be expecting compensation so there should be no reason why other non profits or religious organizations couldn't turn to community volunteers as a b c c m does quite properly and not be expected finally i just wanted to say that the north carolina wage and hour act applies when there's an employer employee relationship a must there is an exemption nonprofit organizations are covered by the act there is no exemption for volunteers where there is an employer employee relationship there is an exemption for prisoners and there was some discussion of a prisoner case which is inexplicable because the standard of the fair labor standards act is different but because