Rukin Hyland & Riggin LLP and Co-Counsel Represent Workers Against Salvation Army in ARC Unpaid Wages Litigation
On January 31, 2023, Judge Manish Shah of the United States District Court for the Northern District of Illinois issued an order denying Defendant The Salvation Army’s (“Defendant”) motion to dismiss in Clancy v. The Salvation Army, No. 1:22-cv-01250 (N.D. Ill.). Clancy 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. 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. In Clancy, which addresses ARCs in the Central, or midwestern, United States, 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.
The motions to dismiss in the two other cases against The Salvation Army are fully briefed and pending before the Southern District of New York and the Northern District of Georgia. Argument on the motion to dismiss in the Northern District of Georgia is set for March 6, 2023.
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.com/rbgg-files-statewide-class-action-against-the-salvation-army-over-rehab-program-employment-practices/.