Archie v. Grand Central Partnership
United States District Court for the Southern District of New York
997 F. Supp. 504 (1998)
- Written by Samantha Arena, JD
Facts
The Grand Central Partnership Social Services Corporation (SSC), the Grand Central Partnership (GCP), and the 34th Street Partnership, Inc. (34th SP) (the agencies) (defendants) were nonprofit social-service agencies that administered the Pathways to Employment (PTE) program under which formerly homeless and jobless individuals (plaintiffs) performed clerical, administrative, maintenance, food-service, and outreach tasks. The PTE program required individuals to work a certain number of shift hours per week and clock in and out. Agency staff ran workshops in which program participants could learn job-readiness skills, including how to interview and create a resume. PTE participants were compensated between $40 and $60 per week. Because of the work completed by PTE participants, the agencies were able to secure and maintain lucrative contracts with other entities by submitting lower bids than businesses that paid their employees higher wages. The PTE participants sued, arguing that the agencies’ practice of paying subminimum wages and the advantages they gained from such practice violated the Fair Labor Standards Act (FLSA) (the act). The agencies argued that they were not covered by FLSA because the participants were trainees receiving job-skills-development training rather than employees entitled to minimum-wage payment.
Rule of Law
Issue
Holding and Reasoning (Sotomayor, J.)
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