Don't Volunteer as Tribute. Is Urban Outfitters Exploiting Volunteers?

With the busy holiday season approaching, popular retail chain Urban Outfitters is looking to get a head start by asking its salaried workers to “volunteer” at its new fulfillment center. Urban’s volunteers would work six-hour shifts in exchange for lunch and transportation. By definition, volunteers aren’t compensated for the work they do, so this essentially means that Urban Outfitters is asking its salaried employees to spend nights and weekends doing the work of hourly employees – for free.

The retailer claimed to receive an enthusiastic response from its employees (despite some less-than-savory media coverage when the story broke), but that doesn’t make it legal. Hourly workers were excluded from the “team building” opportunity in an attempt to comply with labor laws, but is that enough? The Department of Labor could potentially find fault in using salaried employees (who are exempt from overtime) to do hourly work, denying the opportunity for more hours to those who depend on them. Granted, many people argue that volunteers know they aren’t going to be compensated – that’s what volunteering means – but it starts to seem shady when the work that is usually done by paid workers is instead done by an unpaid labor force.

So, when does a volunteer stop being a volunteer and start being an employee? If you asked Urban Outfitters and a number of other for-profit companies, it’s not always clear. In fact, the lines have become increasingly blurred over the past few years, but the confusion on the topic should not serve as a smokescreen allowing companies to exploit volunteers for their own profit.

In the early months of 2014, similar questions were raised at South by Southwest (SXSW), a small indie festival turned conference titan. The nine-day gathering features some of the biggest names in music, film, politics and technology and is primarily staffed by volunteers. In the case of SXSW, the conference would not be possible without its volunteers – and yet all of the profit goes to SXSW, Inc. exclusively. But, volunteers don’t leave empty handed. They receive perks (depending on the number of hours they work) such as wristbands, gear and badges. That doesn’t mean SXSW is correct in using a free labor force, but it doesn’t necessarily mean they’re wrong to, either. Unfortunately, it isn’t that cut-and-dried, and it never really has been.

On one side, SXSW is operating as a recreational establishment that is only open for a small part of the year, exempting the company from normal minimum wage and overtime standards. On the other side, however, the Department of Labor says that individuals may not volunteer for for-profit private sector companies – so you can see how this gets a bit tricky.

SXSW isn’t the only festival to get in trouble – we covered a similar situation with volunteers at the Insomniac music festival. A majority of volunteers thought the work they did was worth the time they spent there, but the festival was met with the same issues as SXSW. Is it ok if the volunteers are doing it for their enjoyment? Is it a problem that their work is making money for a non-charitable organization?

Instances like these have become even murkier when non-profit organizations get involved as well. Competitor Group, a sports marketing and management company, has come under scrutiny concerning its running events, including the Rock n’ Roll Marathon series. Large-scale running events like these are usually operated by a small army of volunteers eager to help raise money for charity sponsors. It sounds like a nice thing to do, until you find out that that there’s less money going to charity than you think.

The way it works currently is, in order to be an official charity for the race, the non-profits have to have at least ten registered runners, granting Competitor Group over $1,500 in profit through registration fees. Charities then recruit volunteers and solicit more runners for the event. In exchange, they can fundraise and market themselves as event charities, while typically receiving very little of the direct profit from the event. Volunteers who expected that their work would go to the benefit of their favorite charitable causes feel like they have been misled – and with good reason. Last year, Competitor Group sued the American Cancer Society for pulling out of a sponsorship agreement. The ACS said that its arrangement with Competitor Group cost them more than they ended up taking in.

So, which side will these cases end up favoring? As of right now, it is still wildly unclear. But, the Department of Labor has set its sights on all sorts of volunteer arrangements, with the mission of finding some clarity when it comes to these new issues. One thing is for sure though, a decisive ruling in any of these cases could completely change how companies go about using volunteers.