You might have heard the strains of distant cheering the other day after the U.S. Court of Appeals for Washington, D.C., overturned a lower court's dismissal of the long-running case of Conway mother and entrepreneurial businesswoman Rhea Lana Riner.
It was every bit a banner courtroom victory for this lady who refused to be intimidated by governmental overreach and what, as opposed to common sense, I like to call uncommon nonsense.
Riner founded her clothing consignment company in her living room in 1997. It began with her idea to invite a few friends to her house to exchange their children's clothing. Since then, Rhea Lana Inc. has expanded as the premier children's consignment franchise with 80 locations across 24 states.
Things were looking good for the mother of three as her fledgling idea grew into full-blown reality.
But in 2013, the U.S. Department of Labor conducted an audit and sent her a letter claiming her company was in violation of the Fair Labor Standards Act by not paying the volunteers minimum wages and overtime pay. In short, the government said these volunteers who help at the consignment events where their own kids' clothes are on sale must be classified as Rhea Lana employees.
She argued they aren't employees and sued. Her case was dismissed in the lower court for lack of reviewable action.
So the Court of Appeals reversal brought understandable relief to the mother who simply used her initiative and creative spirit to launch a concept whereby mothers could create a marketplace for their children's used clothing. In return, the volunteers were allowed first dibs on purchasing clothing other volunteers had brought to sell.
I always pictured the Rhea Lana process as a kind of neighborhood garage sale. It's far beyond a stretch of common sense in my mind to call these mothers and parents "employees" of any form. How about you?
The Court of Appeals held that the government's original letter to Rhea Lana is, in fact, subject to immediate judicial review. The ruling read:
"We conclude the Department's letter to Rhea Lana is final agency action because it is more than mere agency advice. By notifying Rhea Lana that the company was in violation of its wage-and-hour obligations, the letter rendered knowing any infraction in the face of such notice, and made Rhea Lana susceptible to willfulness penalties that would not otherwise apply. The letter thus transmitted legally operative information with a 'legal consequence' sufficient to render the letter final. We therefore reverse the district court's dismissal."
Rhea Lana's was represented by the Cause of Action Institute. That group's president and CEO, and former federal judge, Alfred J. Lechner Jr., said they, too, were gratified by the decision. "People who receive agency letters like the one the Department of Labor sent Rhea Lana should be able to go to court to protect their rights," he said. "The outcome of this case will set an important precedent about the right to judicial review, the scope of the government's control over U.S. commerce, and whether individuals are free to volunteer their time for their own benefit."
Lechner reiterated that the institute believes without question that the Department of Labor overstepped its authority and that it looks forward to "Rhea Lana's day in court." It's unclear just when that day will come since her case now returns to the district court where the never-say-die housewife and mother will show why volunteers can use their time as they see fit toward making a success of these consignment events.
On Riner's Facebook, the mother expressed her relief: "Two-and-a-half years ago the federal government looked at Rhea Lana's in Central Arkansas and told us that consignors could not volunteer at our events--even though they are creating a marketplace for their own items. Then they threatened us with overwhelming fines. And to top it off, they blocked our access to the courts so we could not try to defend ourselves. Well, [this] was the day we've been waiting a long time for. ... The court ruling allows Rhea Lana's to go head-to-head with the federal government and to fight for the right of moms to use their personal time the way they choose--for their own benefit and to help their families!"
Rhea Lana called the events staffed by volunteers valuable activities upon which many families depend, and that have become a nationwide industry. "Be sure to know we will keep fighting for your right to participate in this wonderful, collaborative marketplace where everyone wins," she continued. " ... I'm very, very grateful for your support, my friends. You give me the courage and inspiration to keep fighting for us all!"
Sometimes, amid all the turmoil and nonsense that exists within the systems we've created and allowed to regulate and control our lives, the good guys and gals actually do still win one.
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Mike Masterson's column appears regularly in the Arkansas Democrat-Gazette. Email him at mmasterson@arkansasonline.com.
Editorial on 06/14/2016