09/23/2026
Deep Dive
Vocational Rehab Patients Pushing Back Against Work Without Pay, Sept. 23, 2026, 5:15 AM EDT, Maia Pandey, Reporter [REPRINT FROM BLOOMBERG LAW]
Substance abuse treatment centers that require patients to work unpaid as part of the program are coming under scrutiny after recent wage-and-hour litigation and state enforcement actions.
This month, Massachusetts attorney general hit the Adults & Teen Challenge Northeast Inc. recovery program with $1.15 million in citations for allegedly requiring participants to perform unpaid labor as a condition of treatment. That finding came just weeks after a Texas federal judge allowed a former patient’s suit against a Houston drug rehabilitation program over similar unpaid wage claims to advance to trial.
Such cases pose the relatively novel legal question of when, if at all, rehabilitation patients count as employees under the federal Fair Labor Standards Acts or state law if they’re completing labor while enrolled in a recovery program. Despite one recent federal appeals court decision establishing a test for these situations, there’s no clear consensus among courts.
Patients have filed claims against both the organizations providing treatment — which kept the wages they earned — and the businesses for which they worked.
Thirteenth Amendment and Racketeer Influenced and Corrupt Organizations Act claims also could come into play in situations where participants are offered entry into a work-treatment program in lieu of jail time, said Caroline J. Berdzik, co-chair of Goldberg Segalla’s employment and labor practice group.
“This impacts areas of the law that don’t frequently come across the desk of employment attorneys,” Berdzik said. “Wage-and-hour obviously, but then you have this subset of trafficking laws and potential convict labor, which makes for pretty high-stakes analysis.”
‘Not a New Concept’
The work-treatment rehab model is “not a new concept,” though such vocational programs have become more common in recent years as the opioid crisis has driven demand for drug recovery care, according to Robyn Oster, policy director for the Partnership to End Addiction.
The programs often involve participants who have been court-ordered to take part in rehabilitation in lieu of incarceration — with some told they may face incarceration if they don’t fulfill work requirements.
Data on the prevalence of these programs is relatively scant, Oster said. An estimated 14% to 33% of state-licensed treatment facilities nationwide require residents to work, though not all residents are unpaid, according to a 2024 US Government Accountability Office report.
In some cases, vocational requirements can provide “purpose, structure, and routine” that’s helpful for recovery, or in the case of paid work, help set up patients to reenter the workforce, Oster said.
But unpaid work for third-party businesses can be a slippery slope to exploitation, especially under threat of incarceration, she said.
The Massachusetts attorney general found participants in the penalized treatment program were entitled to more than $850,000 in earned wages for cleaning offices, landscaping, shoveling snow, and preparing food for external for-profit companies.
“Work just in and of itself isn’t treatment,” Oster added.
Court Rulings
Patients whose FLSA and state claims reached federal circuits have faced mixed results so far.
In 2020, patients won more than $1.3 million in damages against the Arkansas-based Drug and Alcohol Recovery Program — DARP Inc. — and the businesses where they worked. But the US Court of Appeals for the Eighth Circuit found two years later the patients weren’t employees because they “undertook the recovery program for their own purposes to avoid imprisonment, and they had no reason to expect compensation.”
The Second Circuit reached a similar conclusion in 2019 in ruling on a patient’s claim against a New York treatment facility.
However, in 2023, the Tenth Circuit remanded claims against CAAIR — Christian Alcoholics & Addicts in Recovery — to the Northern District of Oklahoma after finding a judge improperly dismissed the case over jurisdiction concerns.
Perhaps most notably, the Fifth Circuit’s 2024 Klick v. Cenikor decision found whether the patients or the employer — in this case, the Cenikor Foundation’s rehab program — benefited more from an arrangement determines whether the patient legally counts as an employee.
Two patients separated themselves from that collective action to bring their claims individually. The Fifth Circuit’s “primary beneficiary” test formed the bedrock for one patient’s August win to secure a jury trial.
Shelby Lee Williams’ claims survived Cenikor’s partial summary judgment motion, with the judge finding it benefited more from the work arrangement and therefore qualified as his employer. Williams alleged he regularly worked over 60 hours weekly and had to sometimes skip addiction counseling sessions for work.
Still, the primary beneficiary test may be trickier to survive at trial, according to Curt Hesse, an attorney for Moore & Associates representing Williams.
Rehabilitation centers often argue that “sobriety is priceless, and that’s always going to be more important than any sort of money,” he said.
“That’s what they’re going to try to sell to a jury,” Hesse said. “We’re going to push back and say, ‘Look, you’re really just taking advantage of these people when they’re at their worst.’”
Labor Value
Patients have often pointed to the monetary value of their labor to establish who benefited most. Cenikor, which said it reinvests money from patient work into treatment services, made over $7 million in 2017 from their labor, the August opinion said.
Cenikor sent patients to work in warehouses, refineries, and chemical plants for Exxon Mobil, Shell, and Walmart, according to Justin Chopin, owner of the Chopin Law Firm who represented Cenikor patients at the Fifth Circuit. None of those companies were defendants in the case.
“This was really hard labor,” Chopin said. “In some of these jobs, you would anticipate that person being paid a lot of money.”
Berdzik said she would advise employers working with treatment facilities to automatically treat patients as employees to avoid liability.
“The safest defensible model is one where the work is genuinely and demonstrably therapeutic, individualized, and not sold to third parties,” she said.
“If the task is dictated by what this outside entity needs, rather than what the participant needs for their recovery, there’s going to be a wage-hour issue,” Berdzik said.
[Photo credit: Shutterstock]