AmeriCorps Membership and Unrequested “Gap-Period” Service Do Not Create FLSA Employment Absent a Mutual Employment Relationship

1. Introduction

In Matthew Burgess v. Lessie Bates Davis Neighborhood House Inc., the Seventh Circuit addressed when—if ever—an AmeriCorps participant may qualify as an “employee” entitled to protections under the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq.

Plaintiff-appellant Matthew Burgess participated in an AmeriCorps program sponsored by Lessie Bates Davis Neighborhood House (a nonprofit) and later claimed the organization and its CEO, Gary Gaston, violated federal wage-and-hour law by failing to pay him for work performed, including work he says he did during a “gap period” between AmeriCorps grant years.

The core issues were:

  • Whether Burgess was an “employee” under the FLSA while serving as an AmeriCorps member.
  • Whether Burgess became an FLSA employee during the gap between AmeriCorps program years when he continued performing tasks.
  • Whether the district court properly granted judgment on the pleadings and properly handled Burgess’s state-law claims after disposing of the federal claim.

2. Summary of the Opinion

The Seventh Circuit affirmed the district court’s judgment on the pleadings for defendants, holding that Burgess was not an employee at any time relevant to his FLSA claim.

  • During the funded AmeriCorps terms (March–July 2021 and mid-September 2021–July 2022), Burgess was an AmeriCorps member and therefore statutorily not an employee of the host organization for FLSA purposes.
  • During the gap period (August to mid-September 2021), the pleadings showed no employment relationship: Burgess continued acting as though his AmeriCorps role persisted, used AmeriCorps forms, sought “stipends,” did not work on site, and—critically— was not asked by Lessie Bates to work. The “totality of circumstances” did not support employee status.
  • The panel also modified the judgment to clarify that the dismissal of Burgess’s state-law claims (after the federal claim fell away) was without prejudice.

3. Analysis

3.1. Precedents Cited

Federated Mut. Ins. Co. v. Coyle Mech. Supply Inc., 983 F.3d 307 (7th Cir. 2020)

The court relied on Federated Mut. Ins. Co. v. Coyle Mech. Supply Inc. for the procedural framework governing Rule 12(c) judgment on the pleadings and what materials may be considered (complaint, answer, and exhibits to pleadings) while drawing facts in the nonmovant’s favor. This mattered because Burgess argued the motion should have been converted to summary judgment due to an extra document; the court noted the district court did not consider it, preventing Rule 12(d) conversion concerns.

Lisby v. Henderson, 74 F.4th 470 (7th Cir. 2023)

Lisby v. Henderson supplied the standard of review: de novo review of a judgment on the pleadings. This underscores that the appellate court independently assessed whether the pleadings plausibly established an FLSA employment relationship.

Berger v. Nat'l Collegiate Athletic Ass'n, 843 F.3d 285 (7th Cir. 2016)

Berger v. Nat'l Collegiate Athletic Ass'n was central in two ways:

  • It placed the burden on the plaintiff to allege facts showing he was an employee.
  • It framed the employment inquiry as a “totality of circumstances” assessment of the working relationship, quoted through earlier Seventh Circuit authority.

The panel used Berger to evaluate the real-world relationship during the gap period—focusing on conduct, expectations, and indicia of mutual employment rather than labels alone.

Brant v. Schneider Nat'l, Inc., 43 F.4th 656 (7th Cir. 2022)

The court cited Brant v. Schneider Nat'l, Inc. for a pleading requirement: beyond employee status, an FLSA plaintiff must allege he was underpaid for at least one workweek. While the decision ultimately turned on the absence of an employment relationship, Brant signaled that FLSA claims fail at the threshold if they do not connect alleged work to a compensable workweek under the statute.

Vanskike v. Peters, 974 F.2d 806 (7th Cir. 1992)

Vanskike v. Peters was invoked (through Berger) to reinforce that “employee” status for FLSA purposes is determined by a practical, totality-of-circumstances approach. The court applied that pragmatic lens to conclude that continuing to perform tasks without being asked—while still using AmeriCorps trappings and seeking stipends—did not create a mutual wage-for-work bargain.

Groce v. Eli Lilly & Co., 193 F.3d 496 (7th Cir. 1999)

Groce v. Eli Lilly & Co. governed the disposition of state-law claims once the federal claim was resolved. The Seventh Circuit used Groce to clarify that when a federal court relinquishes supplemental jurisdiction, dismissal of the state claims is necessarily without prejudice. The panel accordingly modified the judgment for clarity.

3.2. Legal Reasoning

(a) Statutory exclusion: AmeriCorps members are not FLSA employees

The court’s first and most decisive step was statutory. Congress and implementing regulations expressly remove AmeriCorps members from employee status vis-à-vis the assisted organization:

  • 42 U.S.C. § 12511(30): AmeriCorps members “shall not be considered to be an employee of the organization receiving assistance.”
  • 45 C.F.R. § 2510.20: regulatory confirmation of non-employee status.

Given the pleadings, Burgess’s March–July 2021 service fell squarely within an AmeriCorps term sponsored by Lessie Bates. His email signature (“AmeriCorps Volunteer Intake Specialist Aide”), AmeriCorps-branded timesheets, and fixed weekly stipend were all consistent with AmeriCorps membership—not employment.

(b) Living allowance ≠ wage

The court emphasized that AmeriCorps compensation is a living allowance, not a wage: 45 C.F.R. § 2522.245 states the allowance “is not a wage.” The pleadings reinforced this: Burgess received a fixed stipend regardless of reported hours, which is structurally unlike hourly FLSA compensation.

(c) The “gap period” analysis: totality of circumstances and the absence of mutual employment

The key factual window was August to mid-September 2021, after the first grant year ended but before the next began. Burgess argued he worked during that period and therefore should be treated as an employee owed wages (and potentially overtime).

Applying the totality-of-circumstances approach, the court found the pleadings did not plausibly establish an employment relationship:

  • Lessie Bates notified Burgess that the stipend would end with the grant year and would not resume until the new grant and program start. That communication undermined any reasonable inference that Lessie Bates intended to employ him (i.e., pay wages) during the gap.
  • Burgess did not allege that Lessie Bates asked him to perform work during the gap. Instead, emails showed him unilaterally sending updates and questions about AmeriCorps participants.
  • Burgess continued using AmeriCorps indicia (timesheets on letterhead; inquiry about “stipends”), suggesting he viewed himself as continuing his AmeriCorps role rather than entering an employer-employee arrangement.
  • An internal email from the volunteer coordinator (“Why does SIUE still have him working?”) suggested confusion and lack of organizational direction, inconsistent with a managed employment relationship.

In short, even if Burgess did perform services, the pleadings did not show a mutual assent to an employment relationship (work in exchange for wages under the organization’s employ). The court treated this as fatal to FLSA coverage in that period.

(d) Return to AmeriCorps membership

When the new term began, Burgess signed a Member Service Agreement stating his stipend was “not an hourly wage or a salary” and that by participating he did not become an employee of Lessie Bates; benefits were tied to the federal grant’s terms. The court treated this as consistent with the statutory regime and as further confirmation of non-employee status during the second term.

(e) Displacement argument under 42 U.S.C. § 12637(b)(3)

Burgess argued that if he became an employee during the gap, then re-entering AmeriCorps would violate 42 U.S.C. § 12637(b)(3) (prohibiting “displac[ing]” employees with AmeriCorps members). The court declined to reach the issue because the premise failed: Burgess was not an employee during the gap, so there was no displacement risk to analyze.

(f) Supplemental jurisdiction and “without prejudice” dismissal

After disposing of the sole federal claim (FLSA), the district court relinquished supplemental jurisdiction over state wage claims. The Seventh Circuit modified the judgment to clarify that the state claims were dismissed without prejudice, consistent with Groce v. Eli Lilly & Co..

3.3. Impact

Although designated a nonprecedential disposition, the decision provides a clear roadmap for similar disputes:

  • Statutory clarity for AmeriCorps hosts: Courts will treat AmeriCorps membership as a near-complete bar to FLSA “employee” status against the host organization, consistent with 42 U.S.C. § 12511(30) and implementing regulations.
  • Gap-period claims face a high pleading burden: Plaintiffs must allege facts showing a real employment relationship—direction, request/authorization to work, mutual understanding of compensation—rather than merely continuing to perform tasks.
  • Form and practice matter: Continued use of AmeriCorps forms, “stipend” terminology, and the absence of wage-like features (hourly pay tied to hours worked) undercut employee-status allegations.
  • Procedural significance: The decision reinforces that when federal claims are dismissed early, state wage claims often return to state court via dismissal without prejudice, shaping litigation strategy for plaintiffs who plead both state and federal wage theories.

4. Complex Concepts Simplified

Judgment on the pleadings (Rule 12(c))
A decision based only on the pleadings (complaint, answer, and attached exhibits), assuming the plaintiff’s well-pleaded facts are true. If those facts still do not establish a legal claim, the defendant wins without discovery or trial.
“Employee” under the FLSA
The FLSA protects workers who are legally “employees.” Courts use a practical test (not just labels) to determine whether the relationship is employment. But where Congress explicitly excludes a class (here, AmeriCorps members), that statutory rule governs.
Living allowance / stipend vs. wage
A wage is compensation for work (typically tied to hours or output). An AmeriCorps living allowance is a fixed program benefit intended to support service participation, and regulations state it “is not a wage.”
Totality of circumstances
A holistic evaluation of the relationship—what each side did, expected, and agreed to—rather than relying on one factor or a job title.
Supplemental jurisdiction
Federal courts may hear related state-law claims when a federal claim is in the case. If the federal claim is dismissed, courts often dismiss the state claims so they can be pursued in state court. That dismissal is typically “without prejudice,” meaning the claims can be refiled.

5. Conclusion

The Seventh Circuit’s decision holds that an AmeriCorps participant cannot convert service into an FLSA wage claim against the host organization when (1) federal law deems AmeriCorps members non-employees during program terms and (2) the pleadings do not show a mutually assented employment relationship during any gap between grants. The opinion also reinforces a procedural principle: once the federal claim falls away, state wage claims dismissed for lack of supplemental jurisdiction are dismissed without prejudice.