Tony and Susan Alamo Foundation v. Secretary of Labor
Decided on Apr. 23, 1985; 471 US 290


A. Issues Discussed: Establishment clause, Free exercise clause

B. Legal Question Presented:

Does minimum wage, overtime, and recordkeeping requirements of the Fair Labor Standards Act apply to workers engaged in the commercial activities of a religious foundation, regardless of whether those workers consider themselves 'employees' and is the application of the Act in this context a violation of the Religion Clauses of the First Amendment?


A. Background:

"The Tony and Susan Alamo Foundation is a nonprofit religious organization incorporated under the laws of California. Among its primary purposes, as stated in its Articles of Incorporation, are to 'establish, conduct and maintain an Evangelistic Church; to conduct religious services, to minister to the sick and needy, to care for the fatherless and to rescue the fallen, and generally to do those things needful for the promotion of Christian faith, virtue, and charity.' The Foundation does not solicit contributions from the public. It derives its income largely from the operation of a number of commercial businesses, which include service stations, retail clothing and grocery outlets, hog farms, roofing and electrical construction companies, a recordkeeping company, a motel, and companies engaged in the production and distribution of candy. These activities have been supervised by petitioners Tony and Susan Alamo, president and secretary-treasurer of the Foundation, respectively. The businesses are staffed largely by the Foundation's 'associates,' most of whom were drug addicts, derelicts, or criminals before their conversion and rehabilitation by the Foundation. These workers receive no cash salaries, but the Foundation provides them with food, clothing, shelter, and other benefits.

In 1977, the Secretary of Labor filed an action against the Foundation, the Alamos, and Larry La Roche, who was then the Foundation's vice president, alleging violations of the minimum wage, overtime, and recordkeeping provisions of the Fair Labor Standards Act with respect to approximately 300 associates. The United States District Court for the Western District of Arkansas held that the Foundation was an 'enterprise' within the meaning of 29 U.S.C. 203(r), which defines that term as 'the related activities performed... by any person or persons for a common business purpose.' The District Court found that despite the Foundation's incorporation as a nonprofit religious organization, its businesses were 'engaged in ordinary commercial activities in competition with other commercial businesses.'

The District Court further ruled that the associates who worked in these businesses were 'employees' of the Alamos and of the Foundation within the meaning of the Act. The associates who had testified at trial had vigorously protested the payment of wages, asserting that they considered themselves volunteers who were working only for religious and evangelical reasons. Nevertheless, the District Court found that the associates were 'entirely dependent upon the Foundation for long periods.' Although they did not expect compensation in the form of ordinary wages, the District Court found, they did expect the Foundation to provide them 'food, shelter, clothing, transportation and medical benefits.' These benefits were simply wages in another form, and under the 'economic reality' test of employment the associates were employees. The District Court also rejected petitioners' arguments that application of the Act to the Foundation violated the Free Exercise and Establishment Clauses of the First Amendment, and the court found no evidence that the Secretary had engaged in unconstitutional discrimination against petitioners in bringing this suit...

Like the District Court, the Court of Appeals also rejected petitioners' constitutional claims..."

On certiorari the US Supreme Court affirmed the judgment of the US Eighth Circuit Court of Appeals.

B. Counsel of Record:
Opposing Side
Unavailable Unavailable
C. The Arguments:
Opposing Side
Unavailable Unavailable
Opposing Side
Brief of amici curiae urging affirmance by Burt Neuborne and Charles S. Sims filed a brief for the American Civil Liberties Union.

Charles Fried argued the cause for respondent. With him on the brief were Solicitor General Lee, Michael W. McConnell, Karen I. Ward, Sandra Lord, and Barbara J. Johnson.

Roy Gean, Jr., argued the cause for petitioners. With him on the briefs was Roy Gean III.


"In order for the Foundation's commercial activities to be subject to the Fair Labor Standards Act, two conditions must be satisfied. First, the Foundation's businesses must constitute an '[e]nterprise engaged in commerce or in the production of goods for commerce.' Second, the associates must be 'employees' within the meaning of the Act. While the statutory definition is exceedingly broad it does have its limits. An individual who, 'without promise or expectation of compensation, but solely for his personal purpose or pleasure, worked in activities carried on by other persons either for their pleasure or profit,' is outside the sweep of the Act.

...Petitioners contend that the Foundation is not an 'enterprise' within the meaning of the Act because its activities are not performed for 'a common business purpose.' In support of this assertion, petitioners point to the fact that the Internal Revenue Service has certified the Foundation as tax-exempt under 26 U.S.C. 501(c)(3)...

The Court has consistently construed the Act 'liberally to apply to the furthest reaches consistent with congressional direction' recognizing that broad coverage is essential to accomplish the goal of outlawing from interstate commerce goods produced under conditions that fall below minimum standards of decency. The statute contains no express or implied exception for commercial activities conducted by religious or other nonprofit organizations, and the agency charged with its enforcement has consistently interpreted the statute to reach such businesses...

That the Foundation's commercial activities are within the Act's definition of 'enterprise' does not, as we have noted, end the inquiry. An individual may work for a covered enterprise and nevertheless not be an 'employee'...

Relying on the affidavits and testimony of numerous associates, petitioners contend that the individuals who worked in the Foundation's businesses... expected no compensation for their labors...

Nevertheless, these protestations, however sincere, cannot be dispositive. The test of employment under the Act is one of 'economic reality'... [I]n this case the associates were 'entirely dependent upon the Foundation for long periods, in some cases several years'...

Petitioners further contend that application of the Act infringes on rights protected by the Religion Clauses of the First Amendment. Specifically, they argue that imposition of the minimum wage and recordkeeping requirements will violate the rights of the associates to freely exercise their religion and the right of the Foundation to be free of excessive government entanglement in its affairs. Neither of these contentions has merit."

The US Supreme Court affirmed the judgment of the US Eighth Circuit Court of Appeals.

Justice Vote: 9 Pro vs. 0 Con

  • White, B. Pro (Wrote majority opinion)
  • Rehnquist, W. Pro (Joined majority opinion)
  • Burger, W. Pro (Joined majority opinion)
  • Brennan, W. Pro (Joined majority opinion)
  • Marshall, T. Pro (Joined majority opinion)
  • Blackmun, H. Pro (Joined majority opinion)
  • O'Connor, S.D. Pro (Joined majority opinion)
  • Stevens, J.P. Pro (Joined majority opinion)
  • Powell, L. Pro (Joined majority opinion)

    The ACLU, as amicus curiae, urged affirmance of the US Eighth Circuit Court of Appeals' judgment; the Supreme Court affirmed in a 9-0 vote, giving the ACLU an apparent win.