RBGG and Co-Counsel Represent Workers Against Salvation Army in ARC Unpaid Wages Litigation

Case Update

On March 15, 2023 , Judge Jesse M. Furman of the United Sates District Court for the Southern District of New York issued an order denying the Salvation Army’s motion to dismiss in Geiser v. The Salvation Army, No. 1:22-cv-01968 (S.D. NY). The order is here. Geiser is one of three similar class and collective actions brought by Rosen Bien Galvan & Grunfeld LLP and its co-counsel, Cohen Milstein Sellers & Toll PLLC and Rukin Hyland & Riggin LLP, against The Salvation Army.

RBGG’s Michael Freedman was quoted in a Law360 article about the Court’s decision: “Mike Freedman of Rosen Bien Galvin & Grunfeld, who is representing the workers, said he looked forward to his clients’ day in court and thanked the New York judge for joining Illinois and Georgia in allowing the claims to proceed. ‘Our clients and countless other vulnerable individuals were and continue to be taken advantage of by the Salvation Army in the name of rehabilitation,’ Freedman said in a statement. ‘Instead of providing support when our clients needed it most, the Salvation Army woefully underpaid them, making it harder for them to financially stand on their own two feet.'”

On March 8, 2023, Judge Sarah E. Geraghty of the United States District Court for the Northern District of Georgia had issued an order denying The Salvation Army’s motion to dismiss in Alvear v. The Salvation Army, No. 1:22-cv-0979-SEG (N.D. Ga.). The order is here. In Alvear, which addresses ARCs in the Southern United States, Judge Geraghty rejected all of The Salvation Army’s arguments for dismissal. Judge Geraghty found the Alvear complaint plausibly alleged employment with respect to all of the relevant considerations—whether the workers had an expectation of compensation, whether the employer or workers were the primary beneficiaries of the work, and whether a finding of employment would advance or hinder the FLSA’s purposes. Accordingly, Judge Geraghty denied the motion to dismiss and ordered The Salvation Army to answer the complaint.

On January 31, 2023, in the third of the three cases, Judge Manish Shah of the United States District Court for the Northern District of Illinois issued an order denying The Salvation Army’s motion to dismiss in Clancy v. The Salvation Army, No. 1:22-cv-01250 (N.D. Ill.). The order is here. In Clancy, which addresses ARCs in the Central Territory, Judge Shah rejected all of The Salvation Army’s arguments for dismissal. Judge Shah found on the allegations in the Clancy complaint that all of the relevant considerations—whether the workers had an expectation of compensation, whether the employer or workers were the primary beneficiaries of the work, whether the workers were economically dependent on the employer, and whether the labor practice undermined minimum labor standards or resulted in unfair competition—“point in favor of a covered employment relationship” between the plaintiffs and The Salvation Army. Accordingly, Judge Shah denied the motion to dismiss, ordered The Salvation Army to answer the complaint, and opened discovery in the case.

In all of the cases, the plaintiffs—participants in The Salvation Army’s Adult Rehabilitation Centers (“ARCs”)—allege that The Salvation Army violates the Fair Labor Standard Act (“FLSA”) and applicable state laws by failing to pay the plaintiffs minimum wage. The ARCs provide participants with room, board, and limited rehabilitation services, but require that participants work a minimum of forty hours per week for The Salvation Army’s thrift stores. For their difficult and sometimes dangerous labor transporting, sorting, repairing, and processing donated goods, The Salvation Army pays participants as little as $1 and no more than $25 per week, well below the federal minimum wage of $7.25 per hour and higher state minimum wages. The three cases cover the ARCs in The Salvation Army’s Central Territory, Eastern, and Southern Territories.

The defendants in all three cases moved to dismiss the complaints, arguing that even accepting the allegations in the plaintiffs’ complaints as true, the plaintiffs had not alleged that they were The Salvation Army’s employees under the FLSA and relevant state laws.

More information about the cases, including information for how to opt into the cases if you participated in a Salvation Army ARC during the relevant time period, can be found at https://www.cohenmilstein.com/case-study/salvation-army-arc-unpaid-wages-litigation.

Rosen Bien Galvan & Grunfeld and Rukin Hyland & Riggin are attorneys in a fourth case, which covers ARCs in California. More information on that case can be found at https://rbgg.wpengine.com/rbgg-files-statewide-class-action-against-the-salvation-army-over-rehab-program-employment-practices/.

Original Post – March 10, 2022

Rosen Bien Galvan & Grunfeld, along with co-counsel from Cohen Milstein Sellers & Toll PLLC and Rukin Hyland & Riggin LLC, represents participants in Salvation Army adult rehabilitation centers and adult rehabilitation programs (“ARC workers”), who perform labor in support of the organization as a condition of their enrollment, in three lawsuits alleging that The Salvation Army violated federal law and many states’ laws when it failed to pay minimum wage to ARC workers. These lawsuits seek to hold The Salvation Army liable for these wages as the ARC workers’ employer, and to permit ARC workers to join these cases (see below). RBGG attorneys working on the case include Gay Grunfeld, Michael Freedman, and Priyah Kaul.

TO JOIN THIS LAWSUIT, CLICK HERE.

Case Background

Thousands of vulnerable individuals—people who are unhoused or marginally housed, who are very poor, who have drug or alcohol addiction problems, who are entangled in the criminal justice system, and/or who suffer from mental illness—enroll in Salvation Army adult rehabilitation centers and adult rehabilitation programs (“ARCs”) each year. As a condition of their enrollment, these individuals must take part in “work therapy,” performing difficult labor in support of the Salvation Army’s operations, particularly its lucrative thrift stores. ARC workers haul heavy furniture, operate dangerous machinery, repair broken goods, and organize donations. If participants are unable to complete their assigned work, they are expelled from the program and its associated housing.

This work is performed for at least 40 hours per week, under the direction or control of Salvation Army employees, in exchange for wages starting as low as $1 a week and capping out at $20-$30 per week, as well as cramped communal housing, and food. ARC workers are not allowed to seek additional work outside of the Salvation Army to supplement their income. They are required to relinquish any government benefits, including food stamps, to the organization for the duration of their enrollment.

These putative collective actions, filed in federal courts in New York, Illinois and Georgia on March 9, 2022, allege that relevant territories of The Salvation Army, encompassing 38 states and thousands of ARC workers, violated federal law and many state laws when they failed to treat ARC workers as employees. The case further alleges that The Salvation Army violated federal law and many state laws by failing to pay ARC workers the federal minimum wage and certain state minimum wages for all hours worked.

The cases are styled: Michael Clancy, et al. v. The Salvation Army, U.S. District Court, Northern District of Illinois; Raymon Alvear, et al. v. The Salvation Army, U.S. District Court, Northern District of Georgia; and Robert Geiser, et al. v. The Salvation Army, U.S. District Court, Southern District of New York

Plaintiffs are represented by attorneys from Rosen Bien Galvan & Grunfeld LLP. Cohen Milstein Sellers & Toll PLLC, and Rukin Hyland & Riggin LLP. The plaintiffs in the case filed in Georgia are also represented by Radford & Keebaugh.

Joining the Case

If you are or were an ARC worker and wish to join this case:

First, confirm that you were enrolled in a Salvation Army Adult Rehabilitation Center or Program in one of the states covered by these actions:

Eastern Territory: includes Connecticut, Delaware, northeast Kentucky, Maine, Massachusetts, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, and Vermont
Central Territory: includes Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, South Dakota, and Wisconsin
Southern Territory: includes Alabama, Arkansas, Florida, Georgia, Kentucky (outside of northeast), Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, Washington, DC, and West Virginia

Next, confirm that you were enrolled in the ARC program within the last three years.

Then click here to be directed to the DocuSign website. Once there, you will be prompted to enter your name and e-mail address. The system will direct you to complete a Consent to Join form. Review the form to ensure accuracy, then sign using a computer or your mobile phone. You must complete this form to join the lawsuit.

After you sign, DocuSign will make a copy of the form available to you for your records.

By signing the form, you will be consenting to join one or more of the lawsuits asserted against The Salvation Army and asserting your Fair Labor Standards Act, 29 U.S.C. § 216(b), claim against the Salvation Army to seek recovery of unpaid minimum wages. There is a three-year statute of limitations on your claim under the FLSA, and that statute of limitations will continue to run until you submit a consent to join form.

Frequently Asked Questions

Is This a Class Action? What Does that Mean?

These cases are potential collective actions under federal law, and both the Central and Eastern cases include potential class actions under certain state laws. Both class and collective actions provide a mechanism for a group of workers with similar claims to litigate those claims together in one case, and both require the Court’s approval, or certification, to proceed on a class or collective basis. We will be seeking certification in the near future. The federal collective action will only include individuals who consent to join the case, as described below. As described above, your statute of limitations on the federal minimum wage claims will continue to run until you submit a consent to join form.

Am I Eligible for the Federal FLSA Claim?

Did you perform work as part of a Salvation Army Adult Rehabilitation Center Program in one of the states above and earn less than the federal minimum wage? You may have a claim under federal law if you did so in the three years prior to submitting a Consent to Join form.

What About Retaliation?

The law prohibits your employer from retaliating against you for exercising your rights under the FLSA by joining a lawsuit. If you have any concerns about retaliation in connection with joining this lawsuit, please contact us immediately.

Do I Have to Pay Anything?

No. We are handling this case on a contingency basis, so we will only be paid if the lawsuit is successful in obtaining a settlement, final judgment, or award. Our payment is subject to approval by the Court, and will come out of that settlement, final judgment, or award.

I Have Other Questions. Who Can I Contact?

If you are interested in more information about this lawsuit, please contact Cohen Milstein via phone (202-408-4600) or email (SalvationArmycase@cohenmilstein.com).