A lawsuit filed in federal court in Missouri may start a chain reaction that alters the business model of popular for-profit races like the Color Run.
Yvette Joy Liebesman, an associate professor at Saint Louis University School of Law, is challenging the business practices of Competitor Group, Inc. Competitor Group owns the Rock ‘n’ Roll Marathon and Half-Marathon. The races are scheduled in 21 U.S. cities for 2014/2015, with seven more races in Canada, Mexico, and Europe.
In her suit, Liebesman alleges that Competitor Group has violated the Fair Labor Standards Act (FLSA) by using volunteers, over 1,000 per race. Volunteers “performed various tasks required by [Competitor Group] in order to operate the events, including, among other things, manning water stations, giving directions, and riding escort for the participants in the race,” the suit reads.
Liebesman twice rode as a bicycle escort for lead runners in the St. Louis Rock ‘n’ Roll Half-Marathon. In addition to not being paid for her work, she alleges she was required to provide her own bicycle, cell phone, and headset for those events.
Like Liebesman, the suit asserts,
These “volunteers” were recruited under the auspices that they were providing a community service for various charity groups, all of which pay [Competitor Group], in one form or another, for the privilege of being an “Official Charity.” While these charity groups provide [Competitor Group] with the veneer of community service, in fact [Competitor Group] is exploiting a volunteer labor force to avoid paying for necessary labor, a privilege not afforded for-profit companies under the Fair Labor Standards Act. As such, [Competitor Group] must pay minimum wage to those who work to make [Competitor Group’s] events possible.
The Rock ‘n’ Roll Marathon requires volunteers to be affiliated with a charity. In order for a charity to be designated an “official charity,” it must provide ten volunteers to the race, which Liebesman says guarantees Competitor Group $1650 in fees. In exchange, the charity may advertise its race participation, ostensibly increasing its visibility and long-term fundraising.
The involvement of charities “create[s] an impression in individuals who might provide [Competitor Group] labor and the public that its events are not-for-profit and that it is a not-for-profit organization,” the suit reads. “Instead, the Official Charities are both a revenue stream and a veneer for recruiting free labor for [Competitor Group].”
Liebesman’s complaint about the illusion of a not-for-profit event is a familiar one in Alaska. In 2013, the Color Run 5K was held in Anchorage for the first time, drawing over 15,000 participants. 200 volunteers from the Boys & Girls Club charity helped put on the race, earning about $10,000 for the organization. Meanwhile, Laurel Andrews of Alaska Dispatch News (ADN) estimated that Color Run earned at least $300,000 profit in Anchorage.
Color Run is owned by IMG. “We provide a total event management solution,” the parent company website says, “including sponsorship attainment, government funding, athlete acquisition, and contractor and volunteer management.”
Color Run returned to Anchorage in 2014, competing against the Anchorage Community Mental Health Services Race for Recovery. Jennifer Smerud, director of the Race for Recovery, worried the Color Run would reduce participation in her not-for-profit race and make it difficult to meet its goal of raising funds for a new playground for traumatized kids.
Fairbanks also saw its first Color Run in 2014.
Rock ‘n’ Roll Marathon and Color Run are part of a young for-profit industry of running events that follow a similar business model. After the success of the 2013 Anchorage Color Run, this industry has its sights set on Alaska.
Mud Factor, owned by Eight51, is a 5K muddy obstacle course run that drew 7,000 participants to its 2014 event in Anchorage. It donated nothing to charity, and like Rock ‘n’ Roll Marathon, relied heavily on volunteers. Mud Factor is returning to Anchorage and Fairbanks in 2015.
Another for-profit race, Spartan, is so excited about Alaska that it has scheduled a race in 2015 without yet determining its location. Its website says that perks for volunteers include snacks and water, parking, and free bag check.
Liebesman’s suit is very likely to change these practices. She correctly asserts that the duties of volunteers are “necessary and integral” to the races, and for-profit race companies do not fall under any of the exceptions of the FLSA. This would entitle her to minimum wage for her work.
However, Liebesman is filing the suit as a class action, seeking damages for all volunteers in all Competitor Group races. Competitor Group will fight to demonstrate that, at a minimum, the class should not include all volunteers, but maybe only a handful that match the work provided by Liebesman. She may also have difficulty seeking the higher minimum wages in states where the Rock ‘n’ Roll Marathon was held that exceed the federal minimum wage.
Ultimately, the goal of this type of class action suit is not to receive damages; it is to change industry behavior. If Liebesman succeeds, events like the Color Run will have to find new ways of supplying workers for its races.
The case is filed in the Eighth District and will have no precedent in Alaska. Although, if the suit is successful, it will likely lead to a cascade of similar suits around the country.
Competitor Group CEO David Abeles called Liebesman’s allegations “completely baseless.” His company has until November 21 to respond to the suit.