Attorneys representing a female Conway entrepreneur have asked a U.S. District Court to declare invalid the U.S. Department of Labor's arbitrary decision to ban Rhea Lana Riner's consignor-volunteer method of operating her growing for-profit child clothing business.
In clearer words, the federal government yet again is grossly overextending its tentacles into private commerce and the activities of freedom-loving Americans.
Legal group Cause of Action filed a complaint in January in a Washington, D.C., court seeking declaratory and injunctive relief for Rhea Lana's Franchise Systems.
The Labor Department decided in 2013 that this enterprising lady's business, which staffs its consignment clothing sales with volunteers who in turn get first dibs on the economical kids' clothing and toys, was violating its regulations.
Baloney. I happen to believe it's a great idea that allows those with lower incomes the chance to purchase used necessities for their children at great prices. And when did innovation become a negative in the land of manifest destiny and freedom?
Yet the bureaucrats decided that the chain of consignment shops has to actually pay consignor-volunteers as "employees" or be slapped with big penalties for not abiding by the agency's dictates.
Labor minions have since filed a motion to dismiss Cause of Action's suit, contending that Riner's business has suffered no harm from its ruling. Oh, really? Sound to anyone else like a tactic that would have unfolded in the former Soviet Union?
"The [agency's] theory of dismissal would subject Rhea Lana Inc. and the Rhea Lana Franchise System to regulatory purgatory," wrote Cause of Action attorneys.
Riner's nightmare began in January 2013 when the Labor Department launched an investigation into her business practices then concluded (despite apparently receiving no complaints from parents and others who participate in Rhea Lana's events across 23 states) that the volunteers are "employees" under the Fair Labor Standards Act.
Labor, wrote Cause of Action lawyers, "is now hiding behind its regulations in an attempt to avoid judicial review."
Cause of Action Executive Director Dan Epstein said: "This illogical move by the Department of Labor demonstrates just how out-of-date their regulations are and how far they are willing to go to shut down free enterprise. We are facing a government that is essentially telling Americans: 'we want to meddle in the minute details of how and where you volunteer.' Thousands of entities operate with willing volunteers and to single out Rhea Lana's is arbitrary, outside the law and damaging to families and entrepreneurs across the country."
According to Epstein, "This case has massive implications because the federal government seems to believe that it has the power to limit citizens' freedom to volunteer. ... Under [Labor's] logic, an eBay seller is also an employee."
Consignors at Rhea Lana's keep about 70 percent of the profits generated from their items while Rhea Lana's retains 30 percent. The small family business has quickly grown nationwide.
Cause of Action seeks a declaration that Rhea Lana's volunteers are not employees under the Fair Labor Standards Act and seeks an injunction that prohibits the the Department of Labor from bringing action against the company.
"For years we've received overwhelming support from the families trying to save money and provide for their children through our sales," said Riner. "Yet now we find ourselves having to defend how moms choose to use their personal time to benefit their families. For the government to step in and overregulate our business and our industry makes no sense. We're fighting back to protect our business and the families we serve."
Said Reed Rubinstein of Cause of Action: "[Labor] erred in applying a categorical ban against volunteerism in this context. ... The economic realities of Rhea Lana's consignment events don't create an employee-employer relationship between Rhea Lana's and its volunteers."
Riner said her business has helped families stretch budgets in difficult times by allowing them to save money purchasing children's clothing and toys at consignment prices. And therein lies the "compensation" to those who choose to volunteer their time and efforts in various communities. It would seem the harassment stems not from a complaint but solely from within well-appointed offices at the Labor Department.
"Participants at Rhea Lana's events have always been satisfied with their experience," said Riner. "Shoppers find bargains, our consignors earn a large portion of the sales price and our consignor-volunteers enjoy participating at events and having special access."
She said it's a mystery just who the government believes it is protecting in its action against her, or why it believes Americans are unable to decide when or if to volunteer.
"The federal government has failed for years now to do what is needed to help Americans create jobs, " she added. "Why would it attack a small business for doing what is needed?" Why indeed.
------------v------------
Mike Masterson's column appears regularly in the Arkansas Democrat-Gazette. Email him at [email protected]. Read his blog at mikemastersonsmessenger.com.
Editorial on 06/29/2014