Employment Law Daily Unpaid Gawker intern primary was beneficiary of internship, so not employee
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Friday, April 1, 2016

Unpaid Gawker intern primary was beneficiary of internship, so not employee

By Ronald Miller, J.D. Because an unpaid intern for Gawker Media was the primary beneficiary of his internship, a federal district court in New York concluded that he was not an employee and granted Gawker’s motion for summary judgment against his FLSA and New York Labor Law (NYLL) claims. Although the intern’s work was potentially of a kind that displaced the labor of paid employees, the court observed that under the “primary beneficiary” test outlined by the Second Circuit in Glatt v. Fox Searchlight Pictures, Inc., the plaintiff had no expectation of compensation, received significant training, received academic credit, his internship class set his minimum number of hours he worked, and he was not entitled to a paid job after his internship (Mark v. Gawker Media LLC, March 29, 2016, Nathan, A.). Gawker is a media company that operates a number of blogs dedicated to various topics in news, technology, and pop culture. The plaintiffs served as unpaid interns on Gawker websites. As an intern, the first plaintiff assisted the blog’s editors and writers. He worked approximately 20 hours per week during his internship. At the time of his internship, the plaintiff was pursuing a degree in journalism, and received academic credit for the internship. A second intern researched, wrote, and edited posts for another blog. He worked remotely from Missouri for about 24 hours per week. At the time of his internship he was pursuing a degree in political science with a minor in creative writing, and did not receive academic credit for the internship. In additional to their individual claims, the plaintiffs sought to certify class and collective actions alleging the company’s failure to compensate them for their time violated the FLSA and NYLL. Previously, the court certified the plaintiffs’ collective action and 17 interns opted in to the lawsuit. The plaintiffs now moved for class certification of their state labor law claims under Rule 23, as well as partial summary judgment on their individual claims. Gawker moved for summary judgment on all of the plaintiffs’ claims. Willfulness. As an initial matter, because there was a genuine dispute of material fact on the question of whether Gawker’s conduct was willful, the court denied summary judgment on its statute of limitations defense on claims made within the three-year time period. Nonetheless, the court found there was only one plaintiff who filed within the three-year statute of limitations. “Primary beneficiary” test. Having dismissed the plaintiffs’ federal claims, the court turned to consider their remaining claims under the NYLL. The parties each filed motions for summary judgment as to whether the interns were employees as defined in the FLSA and NYLL. The court’s starting point was the Second Circuit’s decision in Glatt, which adopted a “primary beneficiary” test for determining whether an unpaid intern is an employee within the meaning of the FLSA and NYLL. Under Glatt, the primary beneficiary analysis “focuses on what the intern receives in exchange for his work.” Applying the “primary beneficiary” test to the facts of this case, the court found that the plaintiff was the primary beneficiary of his internship. The plaintiff conceded that both understood that he had no expectation of compensation. Moreover, he received significant training. Gawker provided mentorship and opportunities to learn journalism skills that were not offered to full-time employees who were expected to already possess an advanced journalism skillset. Because the plaintiff received academic credit for his internship, the internship was tied to his formal education program. Academic calendar. While the record did not dwell on the relationship between the plaintiff’s internship and the academic calendar, this factor nonetheless favored Gawker. The plaintiff’s internship class set the minimum number of hours he worked, and required him to submit weekly time sheets signed by his supervisor. Further, the record demonstrated that the plaintiff’s internship did not extend beyond the point where he was learning new skills and having important new experiences. It was short, and lasted only three months. Displacement of paid labor. On the other hand, the plaintiff’s work was potentially of a kind that displaced the labor of paid employees. Because a reasonable jury could find that the plaintiff did the same kind of work as a paid writer, at least part of the time, this factor favored the plaintiff, concluded the court. However, the plaintiff conceded that he was not entitled to a paid job after his internship. Having evaluated the Glatt factors, the court determined that the plaintiff was the primary beneficiary of his internship. First, the court concluded that he was properly classified as an intern, rather than an employee. His internship integrated classroom learning with practical skill development in a real-world setting. Further, there was no genuine dispute of material fact that the plaintiff received significant “educational or vocational benefits.” With respect to Gawker, there was some evidence of net detriment, as a manager testified that the cost of managing interns in time and effort outweighed the benefits. Still, a reasonable jury could conclude that it received a benefit from the plaintiff’s reporting, which generated advertising revenue. Moreover, Gawker benefitted from the internship program because it enabled the company to identify potential future hires. Nonetheless, the court concluded that the benefits received by Gawker from the plaintiff’s work did not represent the company taking unfair advantage of or acting abusively towards an intern. Nor was it unfair or abusive for it to look to its interns as a potential pool of future employees. Consequently, under the totality of the circumstance and the economic realities of the relationship, the court concluded that the plaintiff was the primary beneficiary of his internship, and granted summary judgment to Gawker on his FLSA and NYLL claims.

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