Twenty years ago, I held my first consignment event for children’s clothing. I was a stay-at-home mom at the time, and I realized that it was difficult for many families to afford new clothes for their children. What started as a sale in my family’s living room is now Rhea Lana’s, the nation’s premier children’s consignment event company, operating more than 80 locations in 24 states.
My business model includes consignors who volunteer at our events across the country. Moms, dads, and others who love the children they care for help to set up and host our consignment events in a manner similar to a neighborhood yard sale. Our events bring buyers and sellers together for the benefit of both, like eBay. But instead of selling our products online, we offer them in person. Volunteers are able to sell their own gently used children’s clothing and toys, and they have access to other vendors’ items for sale before the general public. In the end, the families who do business with Rhea Lana’s are happy. They’ve got extra money in their pocketbooks and clothes that feel new to their children.
Many businesses across the country employ a similar model. Gone are the days of full-service transactions. Today, we pump our own gas. We bus the table at our favorite franchise fast-food restaurants. Should I earn wages for scanning my items, putting them into bags, and inserting my own credit card into the machine at Walmart? Of course not, that would be absurd.
But that’s exactly the line of thinking the Department of Labor used when they determined that Rhea Lana’s was in violation of the Fair Labor Standards Act in 2013.
The DOL claims to have a strict policy against volunteering with for-profit companies. Yet software companies such as Google and Red Hat control the work of thousands of volunteer programmers, and no one expects wages for serving themselves frozen yogurt, just as a store employee would do. The companies may benefit, but so do the volunteers. Software is better, and prices are lower.
This kind of common sense was ignored by the previous presidential administration. Federal regulators insisted on getting involved even after the Arkansas DOL found our company to be in compliance with the law. When the DOL reached out to all of our volunteers suggesting legal recourse if they were not paid wages, none of our volunteers wanted to file suit. None.
Yet, the DOL continues to threaten our company with millions of dollars in fines if we don’t comply with their interpretation of the Fair Labor Standards Act. These fines would cripple our business.
Our case is now before the D.C. Circuit Court. This fall, with the help of Cause of Action Institute, we decided to appeal a federal district court ruling that found that our volunteers, who expect and receive no compensation, and who all sell their own children’s clothing and toys at our events, must be classified as employees. The Fair Labor Standards Act is designed to protect workers from exploitation, and even the district court agreed “that [Rhea Lana’s] labor practices are [not] designed to exploit consignors who volunteer to assist with sales.”
We are hopeful the D.C. Circuit will overturn the lower court’s decision. I encourage current Labor Secretary Alexander Acosta to consider wisely the implications of Fair Labor Standards Act enforcement on businesses like mine moving forward.
Regardless, Congress should ensure that everyone operating a children’s consignment event can continue to provide a valuable service to families in their community by passing the Children’s Consignment Event Recognition Act. This bill, introduced earlier this year by Sens. Tom Cotton, R-Ark., and John Boozman, R-Ark., as well as Rep. French Hill, R-Ark., would provide an exemption for volunteers at children’s consignment events from the requirements of the Fair Labor Standards Act.
Americans have a long and proud tradition of volunteering for nonprofit organizations and also many for-profit companies, especially in today’s sharing economy. With the help of customers who volunteer, Rhea Lana’s consignment events bring the community together with benefits to all involved. The federal government should be applauding such efforts, not trying to stifle them.
Rhea Lana Riner is the founder and chief executive officer of Rhea Lana’s, a children’s consignment company based in Conway, Ark.
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