On January 6, 2026, the California Court of Appeal for the First Appellate District reversed a grant of summary judgment in a wage and hour class action on behalf of many thousands of participants in The Salvation Army’s Adult Rehabilitation Centers. Attorneys at Rosen Bien Galvan & Grunfeld and Rukin Hyland Riggin represent plaintiffs in this matter. The Court’s opinion is here.
The trial court held as a matter of law that plaintiffs—who The Salvation Army forced to work 40 hours a week for its thrift store business in California without monetary compensation in order to participate in its Adult Rehabilitation Centers and receive room and board—were not The Salvation Army’s employees. The trial court applied a narrow employment test for people providing labor to a nonprofit that turned on whether the workers had an agreement for compensation. In their opinion the Court of Appeal rejected the trial court’s test, announced a new test for distinguishing between volunteers and employees of nonprofits, and remanded for further proceedings.
The Court of Appeal held that, where a worker performs labor for a nonprofit, he or she is an employee unless the nonprofit can establish two criteria: “(1) the worker freely agreed to work for the nonprofit to obtain a personal or charitable benefit, rather than for compensation, and (2) overall, the nonprofit organization’s use of the volunteer labor is not a subterfuge to evade the wage laws.” In applying that test, a court must consider, inter alia, whether the benefits provided to the worker are contingent on the worker’s labor and satisfactory performance, whether the worker freely volunteered their services without coercion, whether the labor was performed for a long or short period of time, whether the organization used the workers to replace or perform the same functions as paid employees, and whether the nonprofit otherwise exploited the workers.
Impact Fund, Disability Rights Advocates, California Rural Legal Assistance Foundation, Disability Rights Advocates, Disability Rights California, Disability Rights Legal Center, Legal Aid at Work, Legal Services for Prisoners with Children, Wage Justice Center, and Worksafe signed on to an amicus brief in support of plaintiffs’ appeal.