Friday, October 17, 2014

SLU Professor Sues Rock 'n' Roll Marathon for Fraud, Exploiting Volunteers

Posted By on Fri, Oct 17, 2014 at 6:00 AM

click to enlarge "So, wait, this isn't a charity?" - ELVERT BARNES VIA FLICKR
  • Elvert Barnes via Flickr
  • "So, wait, this isn't a charity?"

When Yvette Joy Liebesman biked to the starting line at the 2012 St. Louis Rock 'n' Roll Marathon, she knew she wouldn't get paid for spending the morning escorting half-marathoners along the route.

She didn't mind. She was a volunteer, and she thought her free labor would help charities and not-for-profits officially associated with the popular race.

But that's not really what happened. The time and effort Liebesman and thousands of other race volunteers in 27 U.S. cities don't directly benefit any charities. Instead, profits go to the race's owner, a for-profit company called Competitor Group Inc. -- something Liebesman didn't realize.

Now Liebesman, a professor at Saint Louis University School of Law, is suing for minimum wages for her and all other Rock 'n' Roll Marathon volunteers. In a class-action lawsuit filed last month, Liebesman's lawyers say race operators are "exploiting a volunteer labor force" by hiding behind a "veneer of community service."

See also: VIP Port-a-Potties? Rock 'n' Roll Marathon Has Big Perk for Big Spenders

From the lawsuit:

Plaintiff (Liebesman), and all those similarly situated, were ignorant of the fact that Defendant's (Competitor Group, Inc.) races had no charitable purpose and that instead, all volunteers and charitable organizations were providing Defendant with free labor for which it should have to pay, increased participation, and hence increased revenue. More simply, Plaintiff and those similarly situated did not, and had no way of knowing, that their role was to increase Defendant's profit margins in a way not allowed under federal and state law.

The lawsuit claims Competitor Group Inc. failed to pay minimum wage required by the Fair Labor Standards Act, violated state minimum wage rules, unjustly earned free labor and committed fraud.

Organizing races brings in big bucks. Private-equity firm Calera Capital bought Competitor Group Inc. for almost $250 million in 2012, according to Sports Business Daily.

Private-equity firm Calera Capital is buying endurance sports leader Competitor Group Inc. for close to $250 million, sources said, ending a nine-month auction of the company.

This week Competitor Group Inc. responded, dismissing the lawsuit and ensuring St. Louis that this weekend's Rock 'n' Roll Marathon will still run on schedule.

Here's CEO David Abeles' official statement:

A lawsuit was recently filed against Competitor Group. We believe the allegations are completely baseless and we are confident that once the facts are analyzed it will be resolved quickly. It will not impact this weekend's event in St. Louis, which will continue just as planned. While we cannot comment any further on the pending litigation, we are proud of the Rock 'n' Roll Marathon's four year history in St. Louis and we will continue to build upon our strong relationships with our community partners.

So just how vital are volunteers to the Rock 'n' Roll Marathon? Volunteers help set up the check-in, assign runners race numbers, distribute T-shirts and swag bags, direct runners to their start corrals, help participants board shuttles, staff the VIP area, distribute refreshments at the finish line and throughout the course, set up the on-course relay transition zone and more. There are also medical volunteers, who help treat minor injuries.

See also: Weezer to Perform at Plush As Part of Rock & Roll Marathon in October

In the lawsuit Liebesman says she thought the marathon benefited charity organizations because race organizers advertise affiliations with "official charities." But it turns out that all you have to do to be an official charity is pay Competitor Group Inc. for the privilege.

Any 501(c)3 organization that pays $1,650 -- that's $165 each for ten runners -- is allowed to call itself "an (not the) official charity of the Rock 'n' Roll St. Louis Marathon" and gets a tent in the "Charity Village" at the end of the race. Race participants from "official charities" get a medal, a discount for an expo booth and a media credential.

From the lawsuit:

Defendant (Competitor Group, Inc.) employs the official charities to create an impression in individuals who might provide it labor and the public that its events are not-for-profit and that it is a not-for-profit organization. Instead, the official charities are both a revenue stream and a veneer for recruiting free labor for Defendant.

The lawsuit calls the marathon's business model a "scheme" designed to increase profit margins by pretending to have a charitable purpose.

Want to see the race in action? The Rock 'n' Roll St. Louis Marathon is this weekend, October 17 and 18, starting at Market Street west of Tucker Boulevard.

Follow Lindsay Toler on Twitter at @StLouisLindsay. E-mail the author at Lindsay.Toler@RiverfrontTimes.com.

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