Internships and the FLSA
The use of internships, both within and outside the framework of higher education, has grown significantly in recent years. According to one recent study, 67 percent of the college class of 2013 completed at least one internship during college — a 6 percent increase over the prior year.1 But with that growth has come controversy over the use of interns and their status under the Fair Labor Standards Act (FLSA),2 a federal law governing minimum wage and overtime for most of the country’s workers. At issue is whether and under what conditions an “intern” might meet the legal definition of an “employee” for FLSA purposes, thus, requiring that compensation be paid.
The FLSA is a broad law intended to protect workers that meet the definition of “employee” from abusive and exploitive employment practices. The statute itself, however, is of little help in defining who qualifies as an employee under the law. The FLSA simply defines an employee as “any individual who is employed by an employer,” and then goes to provide that “employ” means “to suffer or permit to work.”3 In determining what constitutes work, the U.S. Supreme Court has defined “work” as meaning “physical or mental exertion (whether burdensome or not) controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer and his business.”4
Courts interpreting those terms look to the “economic reality” of the relationship to determine if workers are employees for FLSA purposes.5 The determination of whether an individual is an employee under FLSA is a question of law, and individuals seeking compensation pursuant to the FLSA “bear the initial burden of proving that an employer-employee relationship exists and that the activities in question constitute employment for purposes of the [a]ct.”6 Despite its apparent breadth, the definition of “employee” for FLSA purposes is not as absolute as it might appear. This is because exceptions have developed over the years through various court decisions and regulatory interpretations that exclude certain groups from coverage. It is one such exclusion, for trainees under the FLSA, that is this article’s focus.
This article discusses the genesis of the trainee exception and the controversy that has brewed in recent years over its application to modern-day interns. The article also discusses the U.S. Department of Labor (DOL) test for establishing trainee status, and how it has been applied, closing with perspective on the future of internships given these developments.
Portland Terminal
It was in 1947 that the U.S. Supreme Court had one of its first occasions to determine the scope of coverage under the FLSA for trainees. In Walling v. Portland Terminal Company, 330 U.S. 148 (1947),7 the employer was a railroad yard that provided a one-week training course for individuals hoping to work as brakemen for the company.8 The training was described as “a course of practical training to prospective yard brakemen” that was given by the railroad company itself.9 As was explained by the Court, “[t]his training is a necessary requisite to entrusting them with the important work brakemen must do” and, thus, “applicant[s] for such jobs [are] never accepted until [they have] had this preliminary training, the average length of which is seven or eight days.”10
According to the Court, once an applicant was accepted for training, the applicant was “turned over to a yard crew for instruction.”11 Under supervision, the applicant would “first learn the routine activities by observation,” and was then “gradually permitted to do actual work under close scrutiny.”12 However, none of the activities done by these trainees displaced any of the regular employees, who, in fact, did most of the work themselves, and also had to stand immediately by to supervise whatever the trainees did.13 To that end, the Court found that the “applicant’s work [did] not expedite the company business, but [might], and sometimes [did], actually impede and retard it.”14
Once the course was completed successfully and the trainee certified as competent, he or she was then placed on a list from which the employer could hire in the future.15 In general, the trainees received no pay or allowance of any kind, but in 1943, the railroad and the “collective bargaining agent, the Brotherhood of Railroad Trainmen, agreed that, for the war period, men who proved their competency and were thereafter listed as accepted and available for work as brakemen, should be given a retroactive allowance of $4 per day for their training period.”16 Other than this contingent allowance, the Court stated that “[t]he findings do not indicate that the railroad ever undertook to pay, or the trainees ever expected to receive, any remuneration for the training period other than the contingent allowance.”17
Based on these facts, the Supreme Court rejected a claim that these trainees were covered as employees under the FLSA. Despite the broad definition of what it means for someone to be employed, the Supreme Court instead explained:
The definition “suffer or permit to work” was obviously not intended to stamp all persons as employees who, without any express or implied compensation agreement, might work for their own advantage on the premises of another. Otherwise, all students would be employees of the school or college they attended, and as such entitled to receive minimum wages. So also, such a construction would sweep under the [a]ct each person who, without promise or expectation of compensation, but solely for his personal purpose or pleasure, worked in activities carried on by other persons either for their pleasure or profit. But there is no indication from the legislation now before us that Congress intended to outlaw such relationships as these.18
More than 50 years later, a confluence of events combined to bring this issue to the forefront. One such event was the publication of DOL’s Fact Sheet #71: Internship Programs Under the Fair Labor Standards Act, discussed in more detail herein.19 Before doing so, it should first be explained that the DOL Fact Sheet was issued at a time when public debate was brewing over unpaid internships. At the national level, a perception existed by some that the use of unpaid internships had grown substantially as the economy had declined, and that large employers were using internships in an exploitive manner so as to avoid paying wages during lean times.20 Student complaints over unpaid internships and the role of colleges in supporting them began to grow.21 A group of college presidents urged caution in the wake of the DOL Fact Sheet for fear that DOL’s “enforcement actions and public statements could significantly erode employers’ willingness to provide valuable and sought-after opportunities for American college students.”22 It also had been argued that unpaid internships necessarily limited participation to only students with the financial resources to work for free and pay their own living expenses, effectively excluding qualified lower-income candidates from participating.23 Ross Perlin’s book Intern Nation: How to Earn Nothing and Learn Little in the Brave New Economy,24 also fueled the debate over perceived abuses in the internship industry.
All of this might have meant little but for Glatt v. Fox Searchlight Pictures, 293 F.R.D 516 (S.D.N.Y. 2013), appeal filed, Case No. 13-4478-CV(L), 13-4481-CV(CON) (2d Cir. 2013), a widely publicized intern decision involving Fox Searchlight Pictures and the feature film Black Swan. In Glatt, two interns were found to meet the definition of “employee” under the FLSA.25 In the wake of Glatt, a wave of litigation and settlements focused largely on media, entertainment, and publishing have been reported and are being tracked;26 websites have sprung up seeking plaintiffs to bring intern claims;27 and the issue continues to receive scrutiny by various industry groups.28 Against this backdrop, we will examine the DOL Fact Sheet’s test and its application.
The DOL Six-factor Test and its Application
In April 2010, DOL published a list of six items (six-factor test) that would need to be met for an individual to be excluded from coverage in an internship.29 T hose six factors are:
1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training that would be given in an education environment;
2. The internship experience is for the benefit of the intern;
3. The intern does not displace regular employees, but works under direct supervision of existing staff;
4. The employer that provides the training derives no immediate advantage of the activities of the intern, and, on occasion its operations may actually be impeded;
5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.30
The six-factor test itself, derived from Portland Terminal, was not new.31 However, DOL and the courts have differed in how to view the significance of the six-factor test. While certainly the six-factor test has been considered by various courts, DOL’s position that the six-factor test is all-or-nothing32 has not been uniformly endorsed.33 Rather, consistent with DOL’s stated position that “the determination of whether an internship or training program meets this exclusion depends upon all of the facts and circumstances of each such program,”34 the 11th Circuit in Kaplan v. Code Blue Billing & Coding, Inc., 504 F. App’x 831, 835 (2013), cert. denied, 134 S. Ct. 618 (Mem) (2013), characterized the six-factor test as “a body of experience and informed judgment to which courts and litigants may properly resort for guidance.” However, Kaplan was a case in which the 11th Circuit concluded all six factors from DOL were met, and thus, in reliance on them and without reaching the issue of whether meeting all six factors was required, the 11th Circuit used the “economic realities” test as a guidepost and rejected the intern claims, finding no employment relationship.35
Lower federal courts in Florida have also considered the six-factor test when disposing of intern claims with findings of no employment status. For example, in Demayo v. Palms West Hosp., Ltd. Partnership, 918 F. Supp. 2d 1287 (S.D. Fla. 2013), the court rejected an intern claim brought by a surgical technology student at MedVance Institute, who, as a prerequisite to graduation, was required to complete an unpaid student externship after all other coursework was completed. According to the court, “[i]n order to receive credit for the externship, [p]laintiff was required to participate in 125 surgical procedures; simply observing was not enough.”36 Not only in reliance on the six-factor test, but also considering the “economic realities” test and also a “primary benefit” test adopted by the Sixth Circuit in 2011,37 the district court rejected the intern claims, concluding in the end that “the primary benefit of the externship flowed to [p]laintiff, marking her relationship with [d]efendants’ that of an extern, not an employee,” and “that [p]laintiff’s unpaid externship was exactly that — an externship, not employment.”38 While Demayo was decided before the 11th Circuit issued its Kaplan decision, the court relied in large part on Kaplan and O’Neill v. East Florida Eye Institute, P.A., Case No. 11–cv–14384 (S.D. Fla. 2012), district court decisions that had already been issued at that time.39
Similarly, the Middle District of Florida in Schumann v. Collier Anesthesia, P.A. , 2014 WL 2158505 (M.D. Fla. 2014), appeal filed, Case No. 14-13169 (11th Cir. 2014), also considered the six-factor test in rejecting student intern claims brought by former student registered nurse anesthetists (SRNAs) who enrolled in defendant Wolford College, LLC’s (Wolford) nurse anesthesia master’s degree program with the goal of becoming Certified Registered Nurse Anesthetists (CRNAs). While at Wolford, the plaintiffs had participated as interns in a clinical training program supervised by the defendant, Collier Anesthesia, P.A. (Collier), and it was based on that internship that suit was brought. In Schumann, the court analyzed the six-factor test, but did not find it necessary to resolve every factor in favor of defendants in order for defendants to prevail. Rather the court used the six-factor test as a guide to determine whether the economic realities supported a finding of an employment relationship. In holding no such relationship existed, the court explained:
[T]he economic realities of this case establish that [p]laintiffs were not “employees” of any [d]efendant, and therefore are not entitled to wage or overtime compensation. Plaintiffs were students enrolled in a master’s degree program at an accredited college. The graduation requirements for their master’s degree required participation in the internship, as did the accrediting body for the college. Plaintiffs were given the hands-on training required to obtain their nurse anesthesia master’s degrees and to sit for the CRNA certification exam. Each [p]laintiff knew and acknowledged that he or she would not be paid for the internship, and each received course credit and a grade for the internship. The internship provided clear benefits to [p]laintiffs, although the nature and extent of any benefit to [d]efendants is disputed. None of the [p]laintiffs were entitled to, or thought they would be entitled to, employment at Collier upon completion of the internship.40
Thus, even with the Schumann court finding that three of the six factors were not conclusively established in defendants’ favor, summary judgment for defendants was nonetheless granted.41 A s is plain from these cases, the 11th Circuit has given deference to the six-factor test and federal courts in Florida are at least examining it to gain insight into the decision on whether an employment relationship exists.
Other courts have not been as deferential to DOL, with the Sixth Circuit rejecting the six-factor test in favor of a “primary benefit” test in Solis v. Laurelbrook Sanitarium and School, 642 F.3d 518 (6th Cir. 2011). In Laurelbrook, DOL sought to establish FLSA coverage for students at Laurelbrook who were enrolled at the school and also received various types of vocational training. Laurelbrook did not involve a traditional internship model, but rather was in a boarding school setting in which significant vocational training was given.
Factually, the school had been founded in 1950 by a group of Seventh-day Adventists, and operated as a nonprofit corporation.42 Laurelbrook operated “a boarding school for students in grades nine through twelve, an elementary school for children of staff members, and a 50-bed, intermediate-care nursing home that assists in the students’ practical training (the Sanitarium).”43 The school held several accreditations, and its students “learn[ed] in both academic and practical settings, spending four hours of each school day in the classroom and four hours learning practical skills.”44 Laurelbrook offered a variety of vocational courses, and also had a sanitarium that was an integral part of Laurelbrook’s vocational training program.45 As part of their training, students were assigned to the sanitarium’s kitchen and housekeeping departments, and those 16 and older could participate in the state-approved CNA program.46 Students who received their CNA certification could then be assigned to the sanitarium to provide medical assistance to patients, but the sanitarium was staffed such that if the students were not training there, staff members could continue to provide the same patient services.47 DOL sued, claiming various child labor violations, but after a seven-day bench trial in 2009, the district court denied DOL’s request for a permanent injunction, holding that the “Laurelbrook students were not ‘employees’ under the FLSA, thus, rendering the [a]ct inapplicable to Laurelbrook’s entire operation.”48
On appeal, the Sixth Circuit considered, and rejected, DOL’s reliance on the six-factor test as the proper test for deciding if Laurelbrook’s students were classified properly as not being covered by the FLSA. In analyzing that position, the Sixth Circuit noted that courts had differed on whether the six-factor test should be given “controlling weight in determining employee status in a training context” with some courts granting “substantial deference[],”49 others courts rejecting the six-factor test,50 and finally, some courts striking a balance by considering “the factors as relevant but not dispositive to the inquiry.”51
For its own part, the Sixth Circuit rejected DOL’s position, finding the six-factor test “a poor method for determining employee status in a training or educational setting.”52 As explained by the court:
For starters, it is overly rigid and inconsistent with a totality-of-the-circumstances approach, where no one factor (or the absence of one factor) controls. See Rutherford Food, 331 U.S. at 730, 67 S. Ct. 1473 (“We think, however, that the determination of the relationship does not depend on such isolated factors but rather upon the circumstances of the whole activity.”). Moreover, at least one court has found the test’s all-or-nothing approach inconsistent with prior WHD interpretations and opinions endorsing a flexible approach, thereby diminishing any persuasive force the test might be entitled to under Skidmore. See Parker Fire, 992 F.2d at 1026. Furthermore, the test is inconsistent with Portland Terminal itself, which, as outlined below, suggests that the ultimate inquiry in a learning or training situation is whether the employee is the primary beneficiary of the work performed. While the Secretary’s six factors may be helpful in guiding that inquiry, the Secretary’s test on the whole is not.53
The Sixth Circuit then held that “the proper approach for determining whether an employment relationship exists in the context of a training or learning situation is to ascertain which party derives the primary benefit from the relationship.”54 The Sixth Circuit further explained that “[f]actors such as whether the relationship displaces paid employees and whether there is educational value derived from the relationship are relevant considerations that can guide the inquiry” and that “[a]dditional factors that bear on the inquiry should also be considered insofar as they shed light on which party primarily benefits from the relationship.”55
It is too early to know whether the primary-benefit test will prevail, but as noted in Laurelbrook, the application of a primary-benefit analysis has been used by other courts.56 The test also has been advocated by the American Council on Education and other college-affiliated industry groups as part of its amicus brief to the Second Circuit in Glatt.57
Applying the Individual Factors
Regardless of whether the six-factor test is controlling or merely a set of relevant criteria, it is nonetheless helpful to understand how the factors have been applied. To that end, each of the six factors are discussed below.
• Similar to Training Given in an Education Environment — Regarding this first factor, DOL has stated that the intern’s work should constitute “the practical application of materials taught in the classroom.”58 In practice, the affiliation of an internship with a college whereby the internship provides that hands-on application is likely to satisfy this criterion. Instructive in this regard is the previously mentioned Schumann case in which former student registered nurse anesthetists (SRNAs) had enrolled in Wolford College’s nurse anesthesia master’s degree program to become CRNAs.59 While at Wolford, the plaintiffs participated as interns in a clinical training program supervised by Collier (the private, for-profit anesthesia group), but then later claimed minimum wage and overtime violations as a result of the work performed.60
In examining this factor, the district court noted that Wolford was “accredited by the Council on Accreditation of Nurse Anesthesia Educational Programs (COA)…, and that Plaintiffs attended Wolford to become CRNAs.”61 Further, “[t]o become a CRNA, each [p]laintiff had to obtain his or her master’s degrees from Wolford, complete COA-mandated clinical training requirements, and pass a certification exam.”62 Because the “[p]laintiffs’ time at Collier served as the COA-required clinical portion of their master’s degree program,” and they “received academic credit and grades for their clinical time, which allowed them to graduate and sit for the nurse anesthesia certification exam,” the district court concluded “training at Collier was ‘similar to that which would be given in a vocation school’ in that it was a key component of [p]laintiffs’ master’s degree program and was required by the field’s national accreditation body.”63 In so holding, the district court rejected the plaintiffs’ argument that they spent “a portion of their time at Collier stocking carts, filling out pre-operative forms, and performing other work typically reserved for lower-level ‘anesthesia techs,’” and so should not be deemed to have met this criterion.64 Rather, the court held that even if the defendants’ expert was incorrect in his claim that “such work is part of a CRNA’s everyday activities,” the activities the plaintiffs said they performed were at the very least “related” to the plaintiffs’ course of study, which the court found to be sufficient.65
Such a result had also been reached in the Kaplan decision, on which Schumann relied, and which also involved training in conjunction with a structured internship program affiliated with a college.66 In Kaplan, plaintiffs were enrolled as students in MedVance Institute’s Medical Billing and Coding Specialist program. To graduate, MedVance required all students to complete an externship after finishing their other course work.67 In holding that the criterion was satisfied, the court noted that despite the plaintiffs’ arguments “that their externship experiences were of little educational benefit, they did in fact engage in hands-on work for their formal degree program” and “also received academic credit for their work and, by completing an externship, were eligible to earn their degrees.”68
That is not to say that a formal connection to an institution of higher education is required to meet this criterion. Rather, trainee status has been found even when, like the railroad employer in Portland Terminal, an employer has offered its own training program.69 Conversely, affiliation with a college is also not, in DOL’s view, a guarantee of trainee status.70
• For the Benefit of the Intern — For this factor, it would seem obvious that an internship that results in academic credit or satisfies a degree requirement would indeed be of benefit to the intern, thus, easily establishing this criterion. Certainly that was the case in Kaplan, with the 11th Circuit noting that this criterion was satisfied because the “training benefitted [p]laintiffs, who received academic credit for their work and who satisfied a precondition of graduation.”71 Similarly, the district court in Schumann found this criterion met because the “[p]laintiffs received academic credit for their clinical training at Collier, which was not only a precondition for graduation, but also a COA requirement and a prerequisite for CRNA certification.”72 For employers providing the training directly, courts have found the benefit criterion to be met by virtue of the training having been pursued by trainees for their own benefit to qualify for jobs they could not otherwise obtain.73
• Displacement and Supervision — Under this factor, a typical claim is that the employer is replacing paid workers with unpaid interns, and then leaving them without supervision. In describing this factor, DOL’s position is that “[i]f an employer uses interns as substitutes for regular workers or to augment its existing workforce during specific time periods,” those interns would be covered by the FLSA.74 Moreover, “[i]f the employer would have hired additional employees or required existing staff to work additional hours had the interns not performed the work, then the interns will be viewed as employees and entitled compensation under the FLSA.”75 DOL further states that “conversely, if the employer is providing job shadowing opportunities that allow an intern to learn certain functions under the close and constant supervision of regular employees, but the intern performs no or minimal work, the activity is more likely to be viewed as a bona fide education experience.” 76 However, in DOL’s view, giving an intern the “same level of supervision as the employer’s regular workforce, would suggest an employment relationship, rather than training.”77
In Kaplan, the court found no employees were displaced, and the interns were closely supervised, resulting in this criterion having been met.78 In Schumann, the plaintiffs claimed that the student interns were used as replacements for the regular CRNA staff, and also were not closely supervised.79 In response, defendants pointed to stable headcount and payroll costs for CRNAs throughout the relevant time period despite fluctuations in the number of student interns. Although the Schumann court concluded neither party could claim this criterion on summary judgment because of factual disputes, the discussion is helpful in suggesting the type of evidence that might be considered.80
• No Immediate Advantage to Employer — The issue of whether and to what extent an employer can benefit is considered in this factor. DOL’s Fact Sheet combines its consideration of this issue with the benefit to the intern, explaining:
The more the internship provides the individual with skills that can be used in multiple employment settings, as opposed to skills particular to one employer’s operation, the more likely the intern would be viewed as receiving training. Under these circumstances the intern does not perform the routine work of the business on a regular and recurring basis, and the business is not dependent upon the work of the intern. On the other hand, if the interns are engaged in the operations of the employer or are performing productive work (for example, filing, performing other clerical work, or assisting customers), then the fact that they may be receiving some benefits in the form of a new skill or improved work habits will not exclude them from the FLSA’s minimum wage and overtime requirements because the employer benefits from the interns’ work.81
Satisfying this criterion does not mean that an intern cannot, on occasion, perform that other side might be compensable work so long as these tasks are isolated instances or de minimis.82 However, in applying this factor, the 11th Circuit determined it was met when the “[d]efendants’ staff spent time — time away from their own regular duties — training Plaintiffs and supervising and reviewing [p]laintiffs’ work.”83 Because of that, the 11th Circuit found that “[e]ven viewing the evidence in the light most favorable to [p]laintiffs, [p]laintiffs caused [d]efendants’ businesses to run less efficiently and caused at least some duplication of effort” and further that “[d]efendants received little if any economic benefit from [p]laintiffs’ work.”84
A direct economic benefit flowing to employers from unpaid interns is something likely to cause concern by DOL under this criterion. In the context of private law firms specifically (and in response to an inquiry from the American Bar Association), DOL stated that unpaid law students in private law firm settings should only be assigned non-fee-generating activities, such as pro bono legal services.85 But as was noted in that exchange, and also in the context of employer training that helps to create qualified labor pools, the fact that the employer will receive some benefit is not itself disqualifying for this criterion.86
• No Job Guarantee or Understanding for Pay — These last two factors are both typically easy to establish. Absent some promise of a job or an understanding that pay is to be forthcoming, these factors will be deemed to have been met.87 It often seems to be the case, like in Kaplan, Schumann, and Demayo, that the details of internships and the lack of pay have been well communicated, and do not appear to be disputed. Moreover, for internships affiliated with higher education institutions, it is wise to check any accreditation requirements. Not only can they support the “benefit to intern” factor like in Schumann, they may actually forbid payment and academic credit for the same effort.88
Closing Thoughts
What is to be gleaned from these developments in the wake of the hype surrounding Glatt ? First, Glatt will likely prove to be a poor model for liability for the internship industry as a whole because internships are in fact often structured as educational experiences under the auspices of a college or university awarding academic credit. That fact has been instrumental in establishing both the nature of the training (factor one), and the benefit to the intern (factor two). Moreover, the structured nature of such activities in a college setting increases the likelihood that syllabi, placement agreements, and other similar documents will conclusively establish the lack of a job guarantee or entitlement to pay. In contrast, Fox Searchlight Pictures involved a commercial, for-profit enterprise, and those plaintiffs were not student interns and did not receive any form of academic credit toward a degree.
Second, it seems unlikely that internships will disappear, but companies that participate will no doubt continue to take notice of the evolving state of the law and carefully evaluate the decision whether to continue participating. The allegations that an employer-employee relationship has been created are typically made against the placement site, and so companies considering the use of interns would be well-advised to inquire as to the nature of the academic activities involved ( i.e., what are the learning objectives), the role of the onsite supervisor as trainer and mentor, whether the intern is to be awarded academic credit or some other benefit, and also how to best create a mutually beneficial relationship within which the participation is advantageous to the employer while still having the intern receive the primary benefit. Extra care must be taken in structuring programs without the support of an educational institution to formulate and monitor the academic side of the inquiry.
Third, it should also be noted that as yet, no similar groundswell of activity has arisen over the numerous governmental and nonprofit internships that exist. That is because these groups operate under an exclusion from FLSA coverage for volunteers.89 As explained in a special note DOL added to its Fact Sheet limiting its application to for-profit enterprises:
The FLSA makes a special exception under certain circumstances for individuals who volunteer to perform services for a state or local government agency and for individuals who volunteer for humanitarian purposes for private non-profit food banks. WHD also recognizes an exception for individuals who volunteer their time, freely and without anticipation of compensation for religious, charitable, civic, or humanitarian purposes to non-profit organizations. Unpaid internships in the public sector and for non-profit charitable organizations, where the intern volunteers without expectation of compensation, are generally permissible.
This has generated its own criticism,90 but those issues are beyond the scope of this article. DOL did state that it was “reviewing the need for additional guidance on internships in the public and non-profit sectors” but to date, nothing has been issued.
Fourth, and finally, for those involved in developing or promoting compliant internships, some consideration must at least be given to each of the six factors and how best to avoid some of the pitfalls that could cause a determination of employee status. With proper structure and oversight, internships can remain an effective part of education.
1 See Internships.com, Infographic: Internships Survey and 2014 Internship Trends, http://www.internships.com/eyeoftheintern/news/idc-news/internships-survey-2014-internship-trends/#sthash.F8ctC6HD.dpuf.
2 29 U.S.C. §201, et seq.
3 29 U.S.C. §§203 (e)(1), (g).
4 Tennessee Cole Company v. Muscoda Local 123, 321 U.S. 590, 598 (1944).
5 See Goldberg v. Whitaker House Co-op., Inc. , 366 U.S. 28, 33 (1961).
6 See Freeman v. Key Largo Volunteer Fire and Rescue Dept., Inc., 841 F. Supp. 2d 1274, 1278 (S.D. Fla. 2012) (additional citations omitted).
7 A companion case was issued on the same date as Portland Terminal and decided in a similar manner. Walling v. Nashville, C. & St. L. R. Co., 330 U.S. 158 (1947).
8 Portland Terminal, 330 U.S. at 149.
9 Id.
10 Id.
11 Id.
12 Id.
13 Id. at 150.
14 Id.
15 Id.
16 Id.
17 Id.
18 Id. at 152.
19 U.S. Dept. of Labor, Fact Sheet #71: Internship Programs Under The Fair Labor Standards Act (April 2010)[hereinafter DOL Fact Sheet ], available at http://www.dol.gov/whd/regs/compliance/whdfs71.htm.
20 See, e.g., Kathryn Anne Edwards & Alexander Hertel-Fernandez, Economic Policy Institute, Not-So-Equal Protection — Reforming the Regulation of Student Internships (April 2010), available at http://www.epi.org/files/page/-/pdf/epi_pm_160.pdf.
21 See, e.g., Peter D’Amato, The Unpaid Internship Is Indefensible (Jan. 14, 2014), https://chroniclevitae.com/news/271-the-unpaid-internship-is-indefensible ; Hanna Armour, NYU Students Create Petition to Remove Unpaid Internships Postings on CareerNet, NYULocal (May 1, 2013), available at http://nyulocal.com/on-campus/2013/05/01/nyu-students-create-petition-to-remove-unpaid-internship-postings-on-careernet/.
22 Letter to Hon. Hilda L. Solis (April 28, 2010), available at http://s1.epi.org/files/page/-/pdf/20100428_univ_presidents_letter_to_USDOL.pdf.
23 Id.; see also Derek Thompson, Unpaid Internships: Bad for Students, Bad for Workers, Bad for Society, The Atlantic (May 2012), available at http://www.theatlantic.com/business/archive/2012/05/unpaid-internships-bad-for-students-bad-for-workers-bad-for-society/256958/.
24 Published by Verso (2012).
25 Glatt, 293 F.R.D at 534.
26 See Propublica.org, Tracking Intern Lawsuits, http://projects.propublica.org/graphics/intern-suits.
27 See, e.g., Intern Justice, Unpaid Internships: Are They Legal?, www.internjustice.com ; Unpaid Interns Lawsuit, Should You Have Been Paid for Your Unpaid Internship?, www.unpaidinternlawsuit.com.
28 See, e.g., Phil Gardner, Reaction on Campus to the Unpaid Internship Controversy (2012), available at http://www.internbridge.com/white/files/Reaction%20on%20Campus%20to%20the%20Unpaid%20Internship%20Controversy%20Whitepaper.pdf.
29 U.S. Dept. of Labor, DOL Fact Sheet.
30 Id.
31 See Wage and Hour Division, U.S. Department of Labor, Field Operations Handbook at Ch. 10 (1993), available at http://www.dol.gov/whd/FOH/FOH_Ch10.pdf.
32 See Wage and Hour Div., Op. Ltr. FLSA2004-5NA, 2004 WL 5303033 at *1 (May 17, 2004); U.S. Dept. of Labor, DOL Fact Sheet (“If all of the [six] factors listed above are met, an employment relationship does not exist under the FLSA, and the [a]ct’s minimum wage and overtime provisions do not apply to the intern.”).
33 See, e.g., Reich v. Parker Fire Prot. Dist., 992 F.2d 1023, 1027 (10th Cir. 1993) (“We are satisfied that the six criteria are relevant but not conclusive to the determination of whether these firefighter trainees were employees under the FLSA.”); see also Harris v. Vector Marketing Corp. , 716 F. Supp. 2d 835, 843 (N.D. Cal. 2010).
34 U.S. Dept. of Labor, DOL Fact Sheet.
35 Kaplan, 504 F. App’x at 835.
36 Demayo v. Palms West Hosp., Ltd. P’ship, 918 F. Supp. 2d 1287, 1288 (S.D. Fla. 2013).
37 Solis v. Laurelbrook Sanitarium and Sch., Inc., 642 F.3d 518 (6th Cir. 2011), discussed herein.
38 Demayo, 918 F. Supp. 2d at 1292.
39 Id. at 1289-1290.
40 Schumann, 2014 WL 2158505 at *6.
41 Id.
42 Laurelbrook, 642 F.3d at 520.
43 Id.
44 Id.
45 Id.
46 Id.
47 Id.
48 Id. at 521.
49 Id. at 525 (citing Atkins v. Gen. Motors Corp., 701 F.2d 1124, 1128 (5th Cir. 1983)).
50 Id. (citing McLaughlin v. Ensley, 877 F.2d 1207, 1209-10 & n. 2 (4th Cir.1989)).
51 Id. (citing Reich v. Parker Fire Prot. Dist., 992 F.2d 1023, 1027 (10th Cir.1993) (additional citation omitted)).
52 Id. at 525.
53 Id.
54 Id. at 529.
55 Id.
56 Id. at 526-30.
57 See Brief of Amici Curiae American Council on Education, et al. , in Support of Neither Party in Glatt, 293 F.R.D 516 (S.D.N.Y. 2013), appeal filed, Case No. 13-4478-CV(L), 13-4481-CV(CON) (2d Cir. 2013).
58 Wage and Hour Div., Op. Ltr. FLSA2006-12, 2006 WL 1094598 at *2 (April 6, 2006) (“The training the externs receive is a practical application of material taught in a classroom;…it qualifies as training similar to what would be given in a vocational school or academic educational instruction.”).
59 Schumann, 2014 WL 2158505 at *1 (M.D. Fla. 2014).
60 Id.
61 Id. at *3.
62 Id.
63 Id.
64 Id.
65 Id. (additional citation omitted).
66 Kaplan, 504 F. App’x at 835 (2013).
67 Id. at 832-833.
68 Id. at 834.
69 See Donovan v. American Airlines, 686 F. 2d 267, 272-73(5th Cir. 1982); Ulrich v. Alaska Airlines, Case No. C07–1215RSM, 2009 WL 364056 at *7 (W.D. Wash. 2009). But see McLaughin v. Ensley, 877 F. 2d 1207, 1210 (4th Cir. 1989).
70 See, e.g., Wage and Hour Div., Op. Ltr. FLSA2004-5NA, 2004 WL 5303033 (May 17, 2004) (although internship awarded credit, DOL could not definitively find interns to be FLSA exempt).
71 Kaplan, 504 F. App’x at 835.
72 Schumann, 2014 WL 2158505 at *4.
73 Portland Terminal, 330 U.S. at 150; see also Donovan, 686 F. 2d at 272 (“Although training benefits American by providing it with suitable personnel, the trainees attend school for their own benefit, to qualify for employment they could not otherwise obtain.”).
74 DOL Fact Sheet.
75 Id.
76 Id.
77 Id.
78 Kaplan, 504 F. App’x at 835.
79 Schumann, 2014 WL 2158505 at *5.
80 Id.
81 DOL Fact Sheet.
82 See, e.g., Atkins, 701 F.2d at 1129 (noting two isolated instances during six- to eight-week training period when trainees cleaned up construction debris and unloaded a piece of machinery constituted de minimis compensable work, and did not transform trainees into employees).
83 Kaplan, 504 F. App’x at 834.
84 Id.
85 See ABA, Labor Department Clarifies Role of Unpaid Law Student Interns, http://www.americanbar.org/publications/governmental_affairs_periodicals/washingtonletter/2013/september/lawstudentinterns.html.
86 Id.; Ulrich v. Alaska Airlines, Inc., Case No. C07–1215RSM, 2009 WL 364056 at *5 (W.D. Wash. Feb. 9, 2009) (“The law presumes that Alaska will
derive ‘some’ benefit from offering training to prospective employees, and the relevant question is whether that benefit is ‘immediate.’”).
87 Kaplan, 504 F. App’x at 835; Schumann, 2014 WL 2158505 at *6.
88 See, e.g., 2013-2014 ABA Standards and Rules of Procedure for Approval of Law Schools, Standard 305 and Interpretation 305-3 (precluding academic credit when compensation is given to the student), available at http://www.americanbar.org/content/dam/aba/publications/misc/legal_education/Standards/2013_2014_standards_chapter3.authcheckdam.pdf ; see also Demayo, 918 F. Supp. 2d at 1291 (noting that school’s accreditation requirements forbid compensation).
89 29 U.S.C. §203(e)(4) excludes public sector volunteers, and DOL has applied that to nonprofit volunteers as well. See Wage and Hour Div., Op. Ltr.
FLSA2008-14 (December 18, 2008). See also Hill v. Watson, 2014 WL 440371 at n. 1 (N.D. Ill. 2014) (rejecting reliance on Glatt because interns fell under volunteer status available for public entities).
90 Anthony J. Tucci, Worthy Exemption? Examining How the DOL Should Apply the FLSA to Unpaid Interns at Nonprofits and Public Agencies, 97
Iowa L. Rev. 1363 (May 2012).
Deborah C. Brown is an attorney with Thompson, Sizemore, Gonzalez & Hearing, P.A., in Tampa. She is on the Executive Council of the Labor and Employment Law Section, is board certified in education law, and holds certification as a senior professional in human resources (SPHR).
This column is submitted on behalf of the Labor and Employment Law Section, Shane Thomas Munoz, chair, and Robert Eschenfelder, editor.
