Employment Law Daily Despite complaints about quality of internship, student not employee entitled to pay
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Thursday, November 16, 2017

Despite complaints about quality of internship, student not employee entitled to pay

By Ronald Miller, J.D.

Although a student complained about the quality of an internship and did not receive course credit or a refund of tuition, the Second Circuit, in an unpublished decision, nevertheless found that the factors outlined in Glatt v. Fox Searchlight Pictures, Inc., weighed in favor of finding that she was an intern, not entitled to compensation for her year-long internship. The appeals court observed that so long “as the relationship at issue has the qualities of a bona fide internship providing educational or vocational benefits in a real world setting, the intern can be the primary beneficiary of the relationship even if her activities provide direct benefit to the employer” (Sandler v. Benden, November 13, 2017, per curiam).

Complaint about quality of internship. The plaintiff was a part-time student in the Master of Social Work program at Long Island University. As part of program, the university placed her in an internship at Bayview Manor under the supervision of Joseph Benden. According to the plaintiff, she performed only “secretarial tasks” and “grunt work,” such as “filing, typing, photocopying, fetching food and wheeling patients,” and she received nearly nothing of educational value. After the plaintiff complained about the quality of the internship, she was dismissed from Bayview and expelled from the university. She was later reinstated by the university, but she did not receive course credit for her year-long internship or a refund of tuition.

Thereafter, the plaintiff brought claims under the FLSA and New York Labor Law (NYLL). In return for the internship, she alleged that Bayview received the benefits of her services, which otherwise would have been performed by a paid employee, as well as benefits from the university. She also alleged that the university benefited through tuition and continued accreditation. However, the district court ruled that the plaintiff was an intern and not an employee for purposes of the NYLL under Glatt v. Fox Searchlight Pictures, Inc. The plaintiff appealed the district court’s dismissal of her NYLL claim.

As an initial matter, the Second Circuit first determined that it had jurisdiction to hear the plaintiff’s appeal of a state law claim when the federal claim that conferred supplemental jurisdiction had not been appealed.

Primary beneficiary test. Thereafter, the appeals court turned to consider the merits of the plaintiff’s claims. At issue was the district court’s ruling that the plaintiff was an intern and not an employee for purposes of the NYLL. The appeals court construed the NYLL definition of employee as the “same in substance” as the FLSA definition. To determine whether an unpaid employee is entitled to compensation under the FLSA and NYLL, the court applied the primary beneficiary test.

The primary beneficiary test has three salient features. First, it focuses on what the intern receives in exchange for his work. Second, it accords courts the flexibility to examine the economic reality as it exists between the intern and the employer. Third, it acknowledges that the internship-employer relationship should not be analyzed in the same manner as the standard employer-employee relationship because the intern enters the relationship with the expectation of receiving educational benefits not expected with all forms of employment.

Glatt factors. Glatt further instructs courts to consider seven non-exhaustive factors in determining whether an intern is an employee for purposes of the FLSA and NYLL. In applying these non-exhaustive factors, courts weigh and balance the totality of the circumstances. Here, the appeals court concluded that the first, second, and third Glatt factors weighed in favor of finding that the plaintiff was an intern.

The court pointed out that there was no expectation of compensation, since the plaintiff was required to complete an unpaid internship beginning her second year in the program. Further, contrary to the plaintiff’s contention, the court found that she did receive educational value from the internship. Specifically, she received educational training during her internship, since she was assigned an individual client at Bayview, she participated in integrated coursework in the form of a “field work class,” and she was required to write three “process recordings” per week that described her experiences as a social work intern. Moreover, she would have received academic credit toward her degree had she performed the internship in a satisfactory manner.

The fourth, fifth, and seventh factors also weighed in favor of finding that the plaintiff was an intern. The duration of the internship coincided with and was limited by the university’s academic calendar. She worked less than 20 hours per week, and was never promised a paid position at Bayview upon completion of her internship. Although the sixth factor may have weighed in the plaintiff’s favor because the work she performed displaced the work of a secretary or administrative assistant, it was not dispositive. Accordingly, the appeals court concluded that the plaintiff did not plausibly plead that she was an employee under the analysis set out in Glatt.

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