Fine for Volunteer Labor Makes Wineries Wary

As small California wine producer announces closure due to assessment, other wineries question their own programs

by Paul Franson
An enthusiastic wine club member seals his own bottle of dessert wine at Westover Winery in 2013.
Castro Valley, Calif.—California seems to be paying more attention to laws that restrict volunteer grape pickers and other labor.

Owner Bill Smyth of Westover Winery in Castro Valley is closing his winery after the California Division of Labor Standards Enforcement assessed him $115,550 in fines, back wages and penalties for using unpaid volunteers to pick grapes. 

The state apparently acted after a volunteer suffered an arm injury after the work was completed and asked Smyth to pay the medical expenses. He refused to pay unless she agreed not to press further claims, as he was afraid her insurance company might pursue him for damages.

The injured party, Kim Cantacessi, now works as a field representative for the Service Employees International Union, a labor union with 2 million members.

Smyth is hardly the only winery owner to use volunteers. Many people consider picking grapes and working at wineries to be a form of entertainment, if not a privilege that often comes with bottles of wine or parties as perks. Some travel services even offer to arrange for volunteers to pick grapes in Italy and France.

David Harmon invites people who’ve bought his Carneros della Notte wine to pick for an hour and then enjoy a party, but he says they don’t really pick that many grapes. “I have to hire a crew,” Harmon said. He came up with an “Own a Vineyard” scheme, through which people could “buy” a vine or two for a year and pick the grapes if they choose.

Still, he admitted, “We’re not sure if we will continue to (offer) picking due to concerns over liability.”

Wendell Lee, the general counsel of the Wine Institute, wrote a paper about using volunteers at wineries.

“While wineries may receive offers by winery customers to provide free labor at the winery, or labor in exchange for wine, the use of volunteers at for-profit companies is fraught with serious legal problems. The use of volunteers is strictly regulated through provisions of the federal Fair Labor Standards Act and California’s state and local wage and hour laws. Enforcement agencies have the power to require wineries that violate wage and hour laws to pay minimum wage and overtime pay, if applicable, along with penalties and attorneys’ fees.”

He continued, “Generally, for-profit companies should avoid the use of volunteers. Volunteers are generally allowed only for public service, religious or other charitable organizations and purposes—and even then, volunteers are usually not allowed to perform the same type of services for the nonprofit organization that a hired employee would normally perform.”

He said that wineries could use temporary workers and independent contractors but not volunteers. Lee emphasized that wineries can’t get away with calling volunteers independent contractors unless they’re truly independent contractors. Misclassifying an employee as a volunteer can result in substantial fines.

On the other hand, nonprofit 501(c)(3) organizations can use volunteers if they don’t perform commercial work and there’s no expectation of payment.

Lee concluded, “Wineries can provide educational seminars, for example, where consumers pay for the experience of working at a winery, but these seminars must be monitored closely by an employee. It’s like going to a dude ranch: Consumers pay for the experience.”

Many wineries hold wine “boot camps” for club members, but they are considered education, and the members have to pay to attend.

A vintner at one winery that has such a program but didn’t want to be identified admitted, “I was worried after that fine, but I researched it carefully and found that if the guests were paying to attend the program it was OK.” 

Of course, they picked a small amount of grapes, not a significant part of the winery’s production, and any possible injuries would have been covered by winery liability insurance.

Cakebread Cellars allows some club members to pay to attend its prestigious American Harvest Workshop along with up-and-coming chefs and members of the media. These participants all pick a few grapes, much to the amusement of the regular pickers. “It is more educational than a regular production practice,” noted Bruce Cakebread.

Other states may not prohibit the practice, however, and many wineries ask for volunteer help through social media.

The Wine Institute’s Lee added that even using volunteers for tasks such as parking cars or directing traffic during winery events is a problem.

He also discussed winery use of “interns.”

“The Division of Labor Standards Enforcement’s reach also includes a winery’s use of unpaid ‘interns.’ The division generally follows federal interpretations, which exempt interns from wage and hour laws only if six criteria are met.”

The training, even though it includes actual operation of the employer’s facilities, is similar to that which would be given in a vocational school;

The training is for the benefit of the trainees or students;

The trainees or students do not displace regular employees, but work under their close observation;

The employer derives no immediate advantage from the activities of trainees or students, and on occasion the employer’s operations may be actually impeded;

The trainees or students are not necessarily entitled to a job at the conclusion of the training period; and

The employer and the trainees or students understand that the trainees or students are not entitled to wages for the time spent in training.

Bruce Cakebread for one thinks interns are often misused. “As a parent of two recent college graduates, I think unpaid ‘internships’ should be a practice stopped in all jobs. It has gotten out of hand, and employers who do it are taking advantage of the current economic situation. It has many ramifications going forward that I don’t think are positive for the workforce or employers.”

The Wine Institute’s Lee recommended that wineries considering volunteer or internship programs consult with an attorney knowledgeable of state and federal labor laws to avoid any legal issues.

Posted on 10.14.2014 - 19:09:58 PST
This is so incredibly asinine. And my taxes go to help fund these over-reaches? No wonder the Tea Party makes sense to some. Have you forwarded this on to your lawmakers?
St Helena, CA USA