# Tony and Susan Alamo Foundation v. Secretary of Labor

Supreme Court of the United States
471 U.S. 290
TONY AND SUSAN ALAMO FOUNDATION ET AL. v. SECRETARY OF LABOR
Certiorari to the United States Court of Appeals for the Eighth Circuit
No. 83-1935. Argued: Mar. 25, 1985 --- Decided: Apr. 23, 1985
Petitioner Foundation is a nonprofit religious organization that derives its income largely from the operation of commercial businesses staffed by the Foundation's "associates," most of whom were drug addicts, derelicts, or criminals before their rehabilitation by the Foundation. These workers receive no cash salaries, but the Foundation provides them with food, clothing, shelter, and other benefits. The Secretary of Labor filed an action in Federal District Court against the Foundation and petitioner officers thereof, alleging violations of the minimum wage, overtime, and recordkeeping provisions of the Fair Labor Standards Act (Act). The District Court held that the Foundation was an "enterprise" within the meaning of 29 U.S.C. § 203(r), which defines that term as "the related activities performed . . . by any person or persons for a common business purpose," that the Foundation's businesses serve the general public in competition with ordinary commercial enterprises, and that under the "economic reality" test of employment the associates were "employees" of the Foundation protected by the Act. The court rejected petitioners' arguments that application of the Act to the Foundation violated the Free Exercise and Establishment Clauses of the First Amendment. The Court of Appeals affirmed as to liability.
Held:
1. The Foundation's businesses constitute an "enterprise" within the meaning of the Act and are not beyond the Act's reach because of the Foundation's religious character. This Court has consistently construed the Act liberally in recognition that broad coverage is essential to accomplish the goal of outlawing from interstate commerce goods produced under conditions that fall below minimum standards of decency. The Act contains no express or implied exception for commercial activities conducted by religious or other nonprofit organizations, and the Labor Department has consistently interpreted the Act to reach such businesses. And this interpretation is supported by the legislative history. Pp. 295–299.
2. The Foundation's associates are "employees" within the meaning of the Act, because they work in contemplation of compensation. Walling v. Portland Terminal Co., 330 U.S. 148, distinguished. The fact that [p291] the associates themselves protest coverage under the Act is not dispositive, since the test of employment under the Act is one of "economic reality." And the fact that the compensation is primarily in the form of benefits rather than cash is immaterial in this context, such benefits simply being wages in another form. Pp. 299–303.
3. Application of the Act to the Foundation does not infringe on rights protected by the Religion Clauses of the First Amendment. The Free Exercise Clause does not require an exemption from a governmental program unless, at a minimum, inclusion in the program actually burdens the claimant's freedom to exercise religious rights. Here, since the Act does not require the payment of cash wages and the associates received wages in the form of benefits in exchange for working in the Foundation's businesses, application of the Act works little or no change in the associates' situation; they may simply continue to be paid in the form of benefits. But even if they were paid in cash and their religious beliefs precluded them from accepting the statutory amount, there is nothing in the Act to prevent them from voluntarily returning the amounts to the Foundation. And since the Act's recordkeeping requirements apply only to commercial activities undertaken with a "business purpose," they would have no impact on petitioners' own evangelical activities or on individuals engaged in volunteer work for other religious organizations. Pp. 303–306.
722 F.2d 397, affirmed.
WHITE, J., delivered the opinion for a unanimous Court.
Roy Gean, Jr., argued the cause for petitioners. With him on the briefs was Roy Gean III.
Charles Fried argued the cause for respondent. With him on the brief were Solicitor General Lee, Michael W. McConnell, Karen I. Ward, Sandra Lord, and Barbara J. Johnson.
* ↑ Burt Neuborne and Charles S. Sims filed a brief for the American Civil Liberties Union as amicus curiae urging affirmance.
This work is in the public domain in the United States because it is a work of the United States federal government (see 17 U.S.C. 105).
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