March 09, 2022

FOR IMMEDIATE RELEASE
March 9, 2022

Contact: Belin Rosen / cohenmilstein@berlinrosen.com

THE SALVATION ARMY ACCUSED OF ILLEGALLY UNDERPAYING VULNERABLE THRIFT STORE WORKERS

Multiple Federal Lawsuits Allege Salvation Army Exploits Workers, Including Minimum Wage Violations

Individuals Attending Rehabilitation Program Are Forced to Work for as Low as $1 Per Week and Must Relinquish All Government Assistance, Such as Food Stamps; Many Exit Program With No Supports or Pathways to Employment

NEW YORK, GEORGIA, ILLINOIS – Three lawsuits filed today against The Salvation Army allege that the national non-profit organization has been violating the Fair Labor Standards Act (FLSA) and related state wage-and-hour laws for years by failing to pay minimum wage to thousands of people who live and work in its adult rehabilitation centers (ARCs) nationwide. The three federal cases were filed in New York, Illinois and Georgia, states representing three of the Salvation Army’s four territorial headquarters.
 

The Salvation Army requires that enrollees in its ARCs perform “work therapy”— a minimum of forty hours of arduous labor in service of The Salvation Army thrift stores — in exchange for extremely low wages, which can start as low as $1 a week and cap out at $20-$30 per week; cramped communal housing and food. Many of these people are unhoused, suffer from mental illness, are overcoming addiction or were recently incarcerated; in fact, some participate as an alternative to incarceration. The grueling work they must complete includes hauling heavy furniture, operating heavy and often dangerous machinery, repairing broken goods, sorting through donations and maintaining The Salvation Army’s thrift stores. If participants are unable to complete their assigned work, they are expelled from the program and its associated housing.

Despite the substantial benefit The Salvation Army derives from the labor of these vulnerable workers, who form the backbone of its lucrative thrift store operations, The Salvation Army pays them almost nothing—well below applicable minimum wage laws. ARC workers are also not allowed to seek out additional work outside of the Salvation Army to supplement their income; those that do risk being kicked out of the program and losing their housing. The Salvation Army requires that ARC participants relinquish any government benefits, including food stamps, to the organization for the duration of their enrollment.

ARCs do not provide any skills training or educational programming that would further participants’ employment after leaving the program. Workers accordingly often leave ARCs with little to no support system or means to seek gainful employment. Meanwhile, in 2019, The Salvation Army’s thrift stores reportedly generated nearly $600 million in earnings.

“In name, The Salvation Army’s ARCs claim to be rehabilitative, but the reality is that they take advantage of vulnerable people with few options. Instead of getting support on the road to stability and recovery, participants are forced to do grueling manual labor, live in meager conditions, make pennies in wages and give up government assistance that could improve their self-sufficiency,” said Michael Hancock, Of Counsel at Cohen Milstein Sellers & Toll.

For example, Plaintiff Stuart Love entered The Salvation Army ARC program in Kansas City, Missouri in November 2019 and completed the program in May 2020. During his time in the ARC, he received a starting weekly wage of only $3 and received a dollar a week increase until it was capped at $21, well below the federal minimum wage. Plaintiff Avery Acker enrolled in the ARC program in Altoona, Pennsylvania in April 2021. While working in a Salvation Army warehouse, sometimes up to 15 hours a day, Acker only received $6 a week for his work, but often was denied his wages until the following week. By the time he completed the program in February 2022, his weekly wage had been capped at $25 a week. 

“I participated in the ARC program to gain stability, but it did nothing to set me up for success after I left,” said plaintiff Avery Acker, who was in an ARC in Altoona, PA. “Making only dollars a week meant that I left the program in no better shape than I had entered it, meanwhile the Salvation Army got months of my virtually unpaid, full-time labor. I didn’t deserve to be treated this way, and neither do the thousands of workers in ARCs around the country.”

Under the FLSA, workers are owed federal minimum wages ($7.25 per hour). The extremely minimal wages which participants are paid weekly falls far below these requirements. The Salvation Army does employ full-time workers, who are paid the minimum wage or more for the same work assignments as ARC participants. If The Salvation Army were unable to take advantage of the nearly-free labor of the ARC participants, it would be required to hire workers to perform their duties. 

“For years, The Salvation Army has had two tiers of workers: full-time staff who are paid at or above the federal minimum wage, and ARC participants who are paid a pittance for the same work,” said Jessica Riggin of Rukin Hyland & Riggin LLP. “The Salvation Army is an organization with tremendous resources and, like any employer, must adhere to federal law and pay all employees the minimum wage. ARC participants across the United States, past and present, deserve the wages they have earned doing grueling work for The Salvation Army.”

“The Salvation Army cannot use its non-profit status and service to the community as an excuse to exploit the labor of vulnerable individuals, many of whom are living in poverty at the time they enter the ARCs. Instead, like any other non-profit, The Salvation Army must comply with federal and state laws designed to protect low wage workers,” said Gay Grunfeld of Rosen Bien Galvan & Grunfeld LLP.

The Salvation Army operates 120 ARCs throughout the United States. These lawsuits filed against The Salvation Army in Georgia, Illinois and New York seek to hold the national non-profit organization accountable for violation of the FLSA and related state wage-and-hour laws.

The plaintiffs are represented by national employment firms Cohen Milstein Sellers & Toll, Rukin Hyland & Riggin LLP, and Rosen Bien Galvan & Grunfeld LLP.  The plaintiffs in the case filed in Atlanta are also represented by Radford & Keebaugh.

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