United States District Court, W.D. North Carolina, Asheville Division
MEMORANDUM OF DECISION AND ORDER
Reidinger United States District Judge
MATTER is before the Court following a bench trial on
November 13, 2019. Upon consideration of the testimony and
evidence presented by the parties, the Court hereby enters
the following Findings of Fact and Conclusions of Law.
12, 2017, the Plaintiff Gregory Armento
(“Armento” or the “Plaintiff”)
initiated this suit against the Defendant Asheville Buncombe
Community Christian Ministry, Inc., (“ABCCM” or
the “Defendant”), alleging failure to pay minimum
wage and overtime in violation of the Fair Labor Standards
Act (“FLSA”), 29 U.S.C. §§ 206 and 207,
and the North Carolina Wage and Hour Act
(“NCWHA”), N.C. Gen. Stat. §§ 95-25.3
and 95-25.4; record-keeping violations under 29 U.S.C. §
211(c) and N.C. Gen. Stat. § 95-25.13; misclassification
of employees under 29 C.F.R. Part 541; retaliation and
wrongful termination in violation of 29 U.S.C. §§
215 and 218c and the North Carolina Retaliatory Employment
Discrimination Act (“REDA”), N.C. Gen. Stat.
§ 95-241; claims under 42 U.S.C. §§ 1983 and
1985; and claims for “duress, undue influence, and
illegal contracts” and intentional infliction of
emotional distress. [Doc. 1].
7, 2018, the Defendant filed a motion to dismiss the
Plaintiff's claims, except for the NCWHA claim, under
Rule 12(b)(6) of the Federal Rules of Civil Procedure, and a
motion for partial summary judgment under Rule 56 of the
Federal Rules of Civil Procedure on the Plaintiff's FLSA,
NCWHA, and REDA claims. [Docs. 46, 49].
March 27, 2019, the Court issued an Order granting the
Defendant's motion to dismiss with respect to the
Plaintiff's claims for record-keeping violations under
the FLSA and NCWHA; duress, undue influence, and illegal
contracts; intentional infliction of emotion distress;
retaliation and wrongful termination under the FLSA and REDA;
and violations of 42 U.S.C. §§ 1983 and 1985, but
denied the Defendant's motion with respect to the
Plaintiff's claims for unpaid wages and overtime
violations under the FLSA and NCWHA. [Doc. 66]. In the same
Order, the Court granted the Defendant's motion for
summary judgment with respect to the Plaintiff's claims
for minimum wage and overtime violations under the FLSA but
denied the Defendant's motion with respect to the
Plaintiff's claims for minimum wage and overtime
violations under the NCWHA. [Id.]. As a result, the
Plaintiff's only remaining claim is for unpaid wages and
overtime violations under the NCWHA. [Id.].
matter thereafter proceeded to a bench trial. Upon conclusion
of the presentation of evidence, the Court allowed the
parties to file supplemental briefs. The parties filed those
briefs on December 6, 2019. [Docs. 110, 111]. Having been
fully heard and briefed, this matter is ripe for disposition.
Plaintiff Gregory Armento is a United States Army veteran who
was homeless in 2015.
Defendant Asheville Buncombe Community Christian Ministry,
Inc., is a nonprofit corporation, organized in accord with
Section 501(c)(3) of the Internal Revenue Code. [Second
Revised Joint Stipulations (“Joint Stip.”), Doc.
95 at ¶ 1].
Defendant operates The Veteran's Restoration Quarters
(“VRQ”) in Asheville, North Carolina.
[Id. at ¶ 2]. The VRQ offers rehabilitative
services to homeless veterans with the goal of making them
self-sufficient, drug-free and alcohol-free, and capable of
establishing permanent housing and permanent employment.
VRQ provides homeless veterans with transitional housing,
meals, counseling, a gym, an onsite chaplain, educational
assistance, a computer room, a library, laundry facilities,
Alcoholics Anonymous meetings, nursing services, psychologist
services, case management services, claims assistance, and
transportation to the local United States Veteran's
Administration (the “VA”) medical center.
[Id. at ¶ 2-3].
VRQ receives funding by way of grants from the VA through the
Homeless Providers Grant/Per Diem Program (“GPD
Program”) pursuant to Title 38 of the United States
Code and subject to the requirements thereof. [Id.
at ¶ 2]. The funding from the VA only partially covers
the cost of the services provided by the VRQ. The VRQ pays
the rest of its costs with funding from other sources,
including charitable donations and grants from entities like
Land of Sky Regional Council, a local non-profit
organization. Neither the Defendant nor the VRQ derives any
funding from work performed by VRQ residents. As a non-profit
entity subject to the requirements of the GPD Program, the
Defendant would have to return the grant money it receives
from the VA if it earned a profit.
Roughly 2, 500 individuals volunteer regularly at the VRQ by
preparing and cooking meals, helping at the front desk,
teaching life skills classes, performing maintenance,
cleaning, assisting with landscaping, providing housekeeping,
and performing other similar activities. The VRQ does not
compensate volunteers for the hours that they work.
part of the overall housing and rehabilitative services
program at the VRQ, all residents are required complete a
certain No. of “Service Hours” by performing
various chores around the VRQ. [Id. at ¶ 7].
The only exception to the Service Hours requirement is that
VRQ residents who are employed full-time or attend school
full-time do not have to perform Service Hours. [Id.
at ¶ 10]. Residents are not paid for completing Service
Hours. Residents can perform Service Hours at the VRQ by
maintaining the living spaces, cleaning the kitchen, cleaning
common areas, staffing the front desk and computer lab, or
driving a van. Residents also can perform their Service Hours
at a different ABCCM location or a charitable organization
that has no affiliation with ABCCM.
Service Hours further the mission and purpose of the VRQ by
providing structure for residents' lives and helping them
build job skills and gain experience to become
self-sufficient and employable. Residents also develop a
sense of personal pride in the VRQ by working Service Hours.
No. of Service Hours that a resident must perform is
determined by his employment and school enrollment status.
Residents employed full-time or enrolled in school full-time
do not have to perform any Service Hours. Unemployed
residents must perform twenty Service Hours per week, while
residents who are employed part-time or enrolled in school
part-time must perform ten Service Hours per week. The
Defendant defines part-time employment as working thirty
hours or less per week.
While some residents perform more Service Hours than are
required, such extra service is on a volunteer basis and
there are no repercussions for refusing to work extra Service
Hours if asked.
Residents performing Service Hours at the VRQ perform chores
that would otherwise be performed by community volunteers,
resident volunteers, or residents providing hours pursuant to
other programs (e.g. the Transitional Employment Program,
infra). Community volunteers typically complete the chores
around the VRQ more effectively and reliably than residents
performing Service Hours, primarily because VRQ residents
generally have a history of employment difficulties and other
related problems. While the Defendant has more issues with
residents performing Service Hours than volunteers, it is
particularly forgiving towards residents when they make
mistakes performing Service Hours.
VRQ has enough community volunteers to perform all the chores
that are performed by residents performing Service Hours.
According to Reverend Scott Rogers, the Executive Director of
ABCCM, the VRQ would only use volunteers and would not have
residents perform any Service Hours at all if its sole
objective was to ensure that the work was performed and
performed in the most effective manner.
VRQ enforces its rules through a “Three Strikes
Accountability Policy.” [Plaintiff's Ex. 1-A at
11]. That policy provides that residents can receive a strike
for committing infractions or violating rules, including by
refusing to perform required Service Hours. [Id.].
Residents can be removed from the VRQ for committing their
third strike, although residents who commit particularly
serious infractions can be removed prior to their third
strike. [Plaintiff's Ex. 1-A at 11; Plaintiff's Ex.
20 at 1].
Transitional Employment Program
VRQ also has a Transitional Employment Program, which allows
residents to work at the VRQ for pay. [Joint Stip. at ¶
12]. Unlike the Service Hours program, residents are not
required to work in the Transitional Employment Program.
Residents wishing to participate in the Transitional
Employment Program must apply and be approved. Residents can
work up to 1, 000 hours in the Transitional Employment
Program. [Id. at ¶ 13].
Participants in the Transitional Employment Program work in
various positions at the VRQ, including as front desk
managers and as van drivers. [Id.].
Transitional Employment Program is designed to help
“transition homeless veterans into meaningful
employment in the community.” [Plaintiff's Ex. 7 at
3]. The Transitional Employment Program provides participants
with “the experience, knowledge, and skills necessary
to attain competitive employment in the community.”
Transitional Employment Program allows unemployed residents
to earn money, develop job skills, build responsible habits,
demonstrate accountability, acclimate to consistent
employment, generate an employment history, and otherwise
transition towards self-sufficiency. [Joint Stip. at ¶
12]. The Transitional Employment Program also empowers the
Defendant to give residents who complete the program an
honest job recommendation for potential employers.
Plaintiff's Enrollment at the VRQ
Plaintiff enrolled at the VRQ on September 2, ...