The Salvation Army lawsuit that most people are asking about is actually a set of related federal and state class actions filed in 2022, all accusing the charity of running its Adult Rehabilitation Center (ARC) thrift-store operations on unpaid labor in violation of minimum wage laws. The cases cover ARC operations in 38 states. As of mid-2026, none has produced a settlement, the lead Illinois case is on appeal after the Salvation Army won summary judgment, and a parallel California case was revived by a state appeals court in January 2026.1Cohen Milstein Sellers & Toll PLLC. Salvation Army ARC Unpaid Wages Litigation
What ARC Participants Are Required to Do
The Salvation Army operates roughly 120 to 126 Adult Rehabilitation Centers in the United States and enrolls an estimated 150,000 adults each year, most of them unhoused or struggling with addiction.2OnLabor. Work Therapy or Wage Theft Enrollment requires at least 40 hours per week of what the organization calls “work therapy”: sorting donated clothing, testing electronics, operating machinery, loading and driving furniture trucks, and staffing the retail floors of Salvation Army thrift stores.3Rosen Bien Galvan & Grunfeld LLP. RBGG Files Suits Against Salvation Army in ARC Unpaid Wages Litigation
In exchange, participants get shared housing, meals, donated clothing, and weekly cash stipends running from about one dollar to thirty dollars depending on the center.2OnLabor. Work Therapy or Wage Theft They generally cannot take outside jobs, and government benefits such as food stamps must be turned over to the organization during the stay. Anyone expelled for missing work or breaking program rules loses housing immediately.3Rosen Bien Galvan & Grunfeld LLP. RBGG Files Suits Against Salvation Army in ARC Unpaid Wages Litigation Some participants enter voluntarily; others are court-ordered as an alternative to incarceration.4University at Buffalo. Hatton Unpaid Labor The program’s completion rate is about 17 percent.5Prison Legal News. Work Therapy: How the Salvation Army’s Chain of Rehabs Exploits Unpaid Labor
The Salvation Army calls participants “beneficiaries” receiving rehabilitative care rather than employees earning wages, and describes the labor as therapy meant to teach responsibility and replace addictive behaviors.6The Salvation Army – SE Michigan ARC. Program In 2024, its thrift store operations generated more than $556 million in revenue.2OnLabor. Work Therapy or Wage Theft
What the Lawsuits Allege
The core claim is that ARC participants function as employees in everything but title, and are owed at least the federal minimum wage of $7.25 per hour, or higher state minimums where applicable, such as $15.00 in Illinois and $13.73 in Michigan.7Cohen Milstein Sellers & Toll PLLC. Court Certifies Worker Minimum Wage Class Collective Action Against the Salvation Army
Plaintiffs invoke the “economic reality” test under the Fair Labor Standards Act, arguing they are economically dependent on the Salvation Army for food and shelter, that the organization directs every aspect of their labor, and that they often work alongside paid non-enrolled staff doing identical tasks.2OnLabor. Work Therapy or Wage Theft They also argue the programs offer no meaningful job placement and no way for participants to save money.
The complaints rely heavily on Tony and Susan Alamo Foundation v. Secretary of Labor, a 1985 Supreme Court decision holding that workers at a religious nonprofit’s commercial operations were employees under the FLSA, that in-kind benefits like food and shelter count as compensation, and that applying wage laws to a religious nonprofit’s commercial activities does not offend the First Amendment.8Legal Information Institute – Cornell Law School. Tony and Susan Alamo Foundation v. Secretary of Labor Judges in all three federal ARC cases have cited Alamo when denying the Salvation Army’s early motions to dismiss.3Rosen Bien Galvan & Grunfeld LLP. RBGG Files Suits Against Salvation Army in ARC Unpaid Wages Litigation
Where Each Case Stands
Illinois: Clancy v. The Salvation Army
Filed March 9, 2022, in the Northern District of Illinois (No. 1:22-cv-01250), Clancy covers the Salvation Army’s Central Territory, including Illinois, Michigan, Wisconsin, Indiana, Iowa, Kansas, Minnesota, Nebraska, North Dakota, and South Dakota. It has been the lead case. On March 26, 2026, Judge Manish S. Shah certified a class action for ARC workers in Illinois, Michigan, and Wisconsin, and a ten-state FLSA collective action. The certified groups covered more than 3,500 participants in Michigan, more than 3,000 in Illinois, more than 650 in Wisconsin, and nearly 1,000 in the remaining states.7Cohen Milstein Sellers & Toll PLLC. Court Certifies Worker Minimum Wage Class Collective Action Against the Salvation Army
Five days later, on March 31, 2026, the same court granted the Salvation Army’s motion for summary judgment, dismissing the case before trial. Plaintiffs appealed to the Seventh Circuit on April 8, 2026, and that appeal is pending.1Cohen Milstein Sellers & Toll PLLC. Salvation Army ARC Unpaid Wages Litigation
Georgia: Massey v. The Salvation Army
Filed the same day in the Northern District of Georgia (No. 1:22-cv-00979), Massey covers the Southern Territory, which runs from Texas and Florida up through Maryland and Virginia. The case was stayed pending developments in Illinois and terminated on November 20, 2023, though the docket shows a filing as recently as March 2026.9CourtListener. Massey v. The Salvation Army
New York: Acker v. The Salvation Army
Also filed March 9, 2022, in the Southern District of New York (No. 1:22-cv-01968), Acker covers the Eastern Territory, including New York, Pennsylvania, Ohio, Connecticut, Massachusetts, and several other northeastern states. The court conditionally certified a collective action in May 2023, the case was reassigned to Judge Arun Subramanian in August 2023, and as of mid-2026 it is listed as ongoing.10Civil Rights Litigation Clearinghouse. Geiser v. The Salvation Army
California: Spilman v. The Salvation Army
A separate California class action delivered the plaintiffs’ most significant recent win. On January 6, 2026, the California Court of Appeal for the First Appellate District reversed the trial court’s grant of summary judgment to the Salvation Army, holding that the lower court applied an “overly narrow” standard by looking only at whether participants had an agreement for compensation.11Justia. Spilman v. The Salvation Army Justice Gordon B. Burns wrote the opinion, which set out a two-part test for California courts evaluating whether a nonprofit’s unpaid workers are actually employees. The nonprofit must show that the worker freely agreed to work in exchange for a personal or charitable benefit rather than compensation, and that its use of unpaid labor is not a strategy to evade wage laws or displace paid employees.12Metropolitan News-Enterprise. Volunteers The case was sent back to the trial court to apply that framework. No damages have been awarded.
The Separate Forced-Labor Case Is Over
A different group of former ARC participants pursued a separate theory, suing under the Trafficking Victims Protection Reauthorization Act. That case, Taylor v. The Salvation Army, was filed in Chicago in late 2021 and dismissed in September 2022. The Seventh Circuit affirmed the dismissal in a 2-1 decision on August 6, 2024, with Judges Kenneth Ripple and Michael Scudder describing the ARC as a “responsibly run treatment program” and characterizing the loss of housing and food for those who stopped working as a “legitimate consequence” of the program rather than a threat of serious harm.13Seventh Circuit Court of Appeals. Taylor v. The Salvation Army, No. 23-1218 Judge Candace Jackson-Akiwumi dissented, writing that the majority “unjustifiably raised the pleading bar.”14Courthouse News Service. Seventh Circuit: Salvation Army Work Therapy Program Doesn’t Violate Forced Labor Laws The forced-labor theory is legally distinct from the wage cases, and this one is closed.
Is There Money to Claim Yet
No. There is no settlement, no announced payout amount, and no payout date in any of the ARC wage cases.1Cohen Milstein Sellers & Toll PLLC. Salvation Army ARC Unpaid Wages Litigation The federal collective actions had a Consent to Join deadline of September 11, 2023, for former ARC participants enrolled between September 20, 2019, and that date in the Southern, Central, or Eastern territories. People who enrolled solely because of a court order or condition of probation were excluded.15Salvation Army ARC Lawsuit. Southern Territory What happens next depends largely on the Seventh Circuit’s decision in the Clancy appeal, which will influence the pace and posture of the remaining cases.