Insomniac Lawsuit: What's the Problem with Recruiting Unpaid Volunteers?

Last month, Live Nation and Insomniac were hit with a putative class action lawsuit alleging the companies broke federal and California labor laws when they recruited unpaid volunteers for their music festivals. We’ve noticed that some former volunteers of the events may be confused as to why this suit was filed – and why it has merit. After all, these people willingly signed up as volunteers – and this means they knew they weren’t going to be paid for their time. So why is one volunteer now suing Insomniac – a company that gave her free festival admission – for back wages?

Employee misclassification is one of the leading labor abuses in the country.

The Ethical Issues

No Real “Quid Pro Quo.” Insomniac allegedly told its volunteers: you help out at a festival and, in exchange, you’ll have time to enjoy some live music. Sounds good in theory, but the suit claims Insomniac never delivered on its promises.

Plaintiff Elizabeth Valladares says she arrived at 12:30 p.m. to Insomniac’s Nocturnal Wonderland and completed her shift at 2:30 a.m. She was assigned to the general store, where she helped concertgoers purchase glow sticks, candy, cigarettes and other items. According to the suit, Valladares spent the entire time at the festival in the general store, except when taking a single meal break, and had no time off to enjoy the festival. The lawsuit describes the volunteers’ “free” admissions as “highly overstated and essentially worthless,” as they spent most of their time working for Insomniac. While this may not be true of every volunteer, it was Valladares’ experience – and the belief that others may have had similar experiences – that led the attorneys to file the case.

Insomniac Holds Collateral. According to the lawsuit, Insomniac holds a “deposit fee,” which will be charged to volunteers’ credit cards if they do not perform their duties to Insomniac’s satisfaction. Valladares claims she was required to submit her credit card information when registering for Nocturnal Wonderland. According to the suit, Insomniac held $89.90 for one to five days after the event to “ensure she completed her ‘duties’ and behaved appropriately during her volunteers hours.” She also had to leave her driver’s license for Insomniac to hold when she arrived at the volunteer parking lot. The suit claims that not only did these volunteers receive no wages for carrying out the work of paid employees, they also, in some cases, were forced to pay Insomniac to work for them because the company could keep their deposits.

Insomniac is Exploiting Music Lovers for Free Labor. Insomniac, according to the New York Times, is “the biggest promoter of electronic dance music in the country” and, in 2011, grossed $60 million in ticket sales for a single event. Despite the fact that Insomniac’s events are “lucrative, for-profit operations,” the company staffs its events largely by recruiting unpaid volunteers, according to the suit. The lawsuit claims Insomniac is taking advantage of volunteers’ love for music, “leveraging their eagerness to attend these events against their willingness to work for free.”

The Legal Issues

Insomniac is a for-profit company. Federal labor law defines a volunteer as an individual who “performs hours of service for a public agency for civic, charitable, or humanitarian reasons, without promise, expectation or receipt of compensation for services rendered,” and states that employees cannot volunteer services to for-profit, private sector employers. Sure, these festival “volunteers” signed up knowing that they would not be paid – but take a look at who they were “volunteering” for. As for-profit, global event leaders and owners of one of the world’s top five e-commerce sites, which attract more than 27 million unique visitors every month, Live Nation and Insomniac are hardly civic, charitable or humanitarian organizations. The U.S. Department of Labor gives examples of what legitimate volunteer services look like – folding bandages for the Red Cross, helping in youth programs as camp counselors, soliciting contributions for charitable, educational or religious organizations, etc. – and this picture doesn’t exactly align with the image of concert “volunteers” working at merchandise tents while their credit card information is held as collateral.

You Can’t Recruit “Volunteers” in Place of Paid Employees. In 1985, Congress amended the Fair Labor Standards Act (FLSA) to “ensure that true volunteer activities were neither impeded nor discouraged, while at the same time minimizing the potential for abuse or manipulation of the FLSA’s minimum wage and overtime requirements.” And this is the crux of the whole issue – you cannot recruit volunteers in the place of paid employees. According to the lawsuit, Insomniac misclassified workers who should have been paid employees as “volunteers” with the “knowledge and intent to subvert the legal protections afforded to paid employees" and "to profit at the expense” of its “volunteers.” What if retail stores started recruiting “volunteers” to assist customers and, in exchange, gave these “volunteers” free clothing?

Just because a company calls you a “volunteer” doesn’t mean you meet the definition. In fact, employee misclassification is one of the leading labor abuses in the country. The U.S. Department of Labor has launched a Misclassification Initiative to combat the “pervasive issue” of employee misclassification, while some states have made legislative moves to help hold employers accountable for deliberately misclassifying employees.

California Has Laws, Too. In addition to protections provided by the FLSA, certain states have enacted additional laws to protect their workers’ rights. According to California law, a company cannot employ someone for more than five hours unless that person receives at least a 30-minute meal break, and Valladares alleges she should have been considered an employee under the law. According to the suit, she received her meal break only after repeated requests – and after the sixth hour of her shift – in violation of state law. Because her shift lasted 14 hours, she should have also received a second 30-minute meal break, which under California law should be provided no later than the end of the employee’s 10^th hour of work, the suit claims. California labor law also requires that eligible employees receive 10-minute, paid rest breaks for every four hours worked. The plaintiff claims she was never given any rest breaks.

Now, this plaintiff’s experience doesn’t necessarily apply to all Live Nation and Insomniac volunteers. There are some volunteers who had great experiences and were given time to enjoy the events; however, the attorneys who filed this case believe it was not just Valladares who was treated this way, and that was their reason for taking action. It’s honorable to offer your time as volunteer, but it’s important that you aren’t being taken advantage of or being deprived of your legal rights – even if you think you’re getting something in return. Laws were enacted for a reason, and the laws alleged to have been broken in this case are the very same laws that protect you every day against minimum wage and overtime violations at the hands of your employer.