The pro se plaintiff defeats one of the largest law firms in the world in this Fair Labor Standards Act case in which a man who was ordered to participate in a drug rehabilitation program was not sufficiently compensated.
The case is Vaughn v. Phoenix House New York, a summary order issued on January 16. The large law firm is Cravath, Swaine and Moore. In rehab, plaintiff was required to perform certain "job functions" and told that he would go to jail if the program kicked him out for not doing his work. The trial court dismissed the case, holding that plaintiff was not an employee because received "the principal benefit of his participation in the rehabilitation program, which he had entered to resolve the criminal charges against him rather than for the purpose of receiving monetary compensation."
The district court got it wrong, the Court of Appeals (Katzmann, Walker and Calabresi) says, because it did not address an important precedent, Glatt v. Fox Searchlight Pictures, 811 F.3d 528 (2d Cir. 2016), which considers when unpaid interns are "employees" who deserve compensation. In that case, the Court said "the proper question is whether the intern or the employer is the primary beneficiary of the relationship” and set out a non-exhaustive set of factors for courts to weigh as they consider “the ‘economic reality’ of the relationship.” While that analysis was "confined to internships" and does not necessarily "apply to training programs in other contexts," "the nature of that relationship may have some resemblance to the vocational training aspects of certain rehabilitation programs, a context in which other courts have looked to the purpose of the work performed because “the presence of a rehabilitative element does not preclude an employment relationship.” Williams v. Strickland, 87 F.3d 1064, 1067 (9th Cir. 1996). No one cited Glatt in the district court. I understand why a pro se plaintiff would overlook Glatt, but a huge law firm? They should read this blog.
Interesting how the Second Circuit relies on an old Ninth Circuit case for this issue, all the while confining this decision to summary-order-world, which strips the case of serious precedential value. Still, it's a win for Vaughn, at least for now. The case is sent back to the district court to reexamine the case through the Glatt factors.