Tony and Susan Alamo Foundation v. Secretary of Labor, 471 U.S. 290 (1985)

One important issue under the free exercise clause of the First Amendment has been the question whether the state can regulate the activities of religious organizations. Many, but not all, regulatory statutes provide exemptions from coverage for religious organizations. If no exemption is granted, does the regulation violate the free exercise clause?

One common area of governmental regulation is the employment relationship. The federal Fair Labor Standards Act (FLSA), for example, imposes certain minimum wage, overtime, and record-keeping requirements on enterprises engaged in commerce. The FLSA, however, expressly exempts from its coverage employees of religious organizations engaged in the noncommercial, religious work of their employer. But the FLSA does not expressly exempt employees of religious organizations engaged in commercial activities. Moreover, the Department of Labor has consistently interpreted the FLSA to cover such commercial activities so long as they are carried out for a ‘‘business purpose.’’

In 1985, in Tony and Susan Alamo Foundation v. Secretary of Labor, the United States Supreme Court considered the question whether the FLSA applies to workers engaged in the commercial activities of a religious organization and if so, whether applying the FLSA in this manner violates the free exercise clause. In this case, the Department of Labor had brought suit against the Tony and Susan Alamo Foundation, a nonprofit religious corporation whose articulated purpose was to ‘‘establish, conduct and maintain an evangelistic church, and generally to do those things needful for the promotion of Christian faith, virtue and charity.’’ The Department of Labor claimed that the foundation had violated the minimum wage, overtime, and record-keeping provisions of the FLSA. As part of its work, the foundation operated a wide array of commercial businesses, including hog farms, service stations, restaurants, and retail stores, staffed in large measure by approximately three hundred volunteer ‘‘associates,’’ most of whom had been drug addicts, derelicts, or criminals before their rehabilitation. The associates received no wages, but the foundation did provide them with food, clothing, shelter, and other benefits such as medical care.

The foundation resisted the litigation, arguing that the FLSA did not cover its associates because they were volunteers, not employees, and because these associates were engaged in religious activities exempt from the FLSA. The foundation also argued that application of the FLSA to its activities violated the free exercise clause of the First Amendment.

The U.S. Supreme Court unanimously found that the foundation’s associates were in fact employees since they engaged in the work of the foundation with the expectation of receiving substantial in-kind benefits in exchange for their labor. The Court further found that the associates engaged in commercial activities despite the foundation’s status as a taxexempt, nonprofit organization. Significant to the Court was the fact that the foundation’s various businesses competed with nonreligious commercial enterprises. If the foundation’s various businesses were allowed to pay substandard wages, the Court concluded, they would have an unfair competitive advantage over their secular competitors. Thus, the Court held that the FLSA applied to the foundation’s associates.

The Court then addressed the constitutional question whether application of the FLSA to the commercial activities of religious organizations could be squared with the free exercise clause. The Court concluded that the FLSA’s minimum wage and overtime pay requirements did not infringe the associates’ free exercise rights because the associates were free to give their wages back to the foundation. Likewise, the Court concluded that the record-keeping requirements that the statute imposed on the foundation were not so onerous as to entangle the government excessively with religion.

In the years since the Supreme Court’s 1985 decision, Congress has continued to refuse to exempt the commercial activities of religious organizations from FLSA coverage while retaining an exemption for their employees engaged in noncommercial activities. At the same, courts have continued to maintain that FLSA coverage of the commercial activities of religious organizations does not violate the free exercise clause.

DAVISON M. DOUGLAS

References and Further Reading

• Bethel, Terry A., Recent Labor Law Decisions of the Supreme Court, Maryland Law Review 45 (1986): 170.
• Gregory, David L., The First Amendment Religion Clauses and Labor and Employment Law in the Supreme Court, 1984 Term, New York Law School Law Review 31 (1986): 1.

See also Accommodations of Religion; Exemptions for Religion Contained in Regulatory Statutes; Fair Labor Standards Act and Religion