Friday, December 8, 2017

Hearst interns not entitled to salary under the FLSA

The Court of Appeals over the last year or so has clarified the rules governing when interns are entitled to salary under the Fair Labor Standards Act. So far, the Court has been ruling against the interns. It does so in this case as well.

The case is Wang v. Hearst Corporation, decided on December 8. Here are the standards governing when interns are really employees and are entitled to payment for their services:

1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa;

2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands‐on training provided by educational institutions;

3. The extent to which the internship is tied to the internʹs formal education program by integrated coursework or the receipt of academic credit;

4. The extent to which the internship accommodates the internʹs academic commitments by corresponding to the academic calendar;

5. The extent to which the internshipʹs duration is limited to the period in which the internship provides the intern with beneficial learning;

6. The extent to which the internʹs work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern;

7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.
This test derives from Glatt v. Fox Searchlight Pictures, 811 F.3d 528 (2d Cir. 2016), which the principle case in the Second Circuit on this case. The multiple plaintiffs in this particular case worked for Hearst publications and were interested in careers in fashion. One interned for Cosmopolitan. They did perform tasks relating to their professional pursuits and gained valuable knowledge and skills. But they also complained many of their duties were menial and repetitive, did not receive close supervision or guidance and there was little formal training. They mastered most of their tasks within a few weeks but did the same work for the rest of their internships.

So are they interns or employees under the FLSA? The Court of Appeals (Jacobs, Cabranes and Wesley) says factors 1 and 7 favor Hearst because plaintiffs did not expect payment or entitlement to a job.

As for factor 2 (training), the Court says plaintiffs "would . . . limit the discussion of beneficial training . . . to education that resembles university pedagogy to the exclusion of tasks that apply specific skills to the professional environment." That Court does not see it that way. "Training" under the Glatt test "clearly contemplates that training opportunities offered to the intern include products of experiences on the job." While plaintiffs tacitly assume that professions, trades and arts are or should be just like school, "many useful internships are designed to correct that impression."

Factors 3 and 4, dealing with academic integration and the academic calendar, favors Hearst for most of the interns because for one, the internship was a graduation requirement, and for another, the internship meshed with her academic major.

Moving to factor 5, this also favors Hearst because "practical skill may entail practice, and an intern gains familiarity with an industry by day to day professional experience."  As for favor 6 -- which considers the extent to which an intern's work complements the work of paid employees or displaces it -- the Court notes that "An intern’s work is complementary if it requires some level of oversight or involvement by an employee, who may still bear primary responsibility." This favor is not dispositive.

All told, the factors favor Hearst. While plaintiffs argue that any mixed inferences require a trial, under the totality of the circumstances, Hearst wins as a matter of law. The mere existence of some factual dispute is not enough for trial under general summary judgment principles, and "Status as an 'employee' for the purposes of the FLSA is a matter of law, and under our summary judgment standard, a district court can strike a balance on the totality of the circumstances to rule for one side
or the other."

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