Outten & Golden: Empowering Employees in the Workplace

Posts Tagged ‘Unpaid Interns’

Unpaid Intern Cannot Bring Sexual Harassment Claim Under NYC Human Rights Law, Judge Rules

Monday, October 7th, 2013

davidyamadaA New York federal district court has ruled that a former unpaid intern for Phoenix Satellite Television US, Inc., cannot bring a sexual harassment claim under the New York City Human Rights Law, because the lack of compensation renders her unable to meet the requirement of employee status under the statute.

Judge P. Kevin Castel issued the ruling in Lihuan Wang v. Phoenix Satellite Television US, Inc., on Thursday. The alleged harassment included ongoing social and sexual overtures and physical touching by a bureau chief who supervised the plaintiff’s work.

As reported by Jay-Anne B. Casuga for the BNA’s Daily Labor Report (subscription required):

A female former unpaid broadcasting intern cannot bring a sexual harassment claim under the New York City Human Rights Law because she is not an “employee” within the meaning of the law, a federal judge in New York held Oct. 3, addressing an issue of first impression . . . .

. . . Relying on federal and New York case law, the district court said unpaid interns do not qualify as employees under Title VII of the 1964 Civil Rights Act or the New York State Human Rights Law because of the “absence of remuneration,” which is an “essential condition to the existence of an employer-employee relationship.”

O’Connor v. Davis (1997)

The district court cited favorably to the leading decision on the legal question of whether unpaid interns have standing to sue under employment discrimination laws, O’Connor v. Davis, a 1997 Second Circuit Court of Appeals decision involving a student social work intern who alleged that she was sexually harassed by a staff psychiatrist in the course of an internship with the Rockland Psychiatric Center in New York.

The plaintiff filed suit, claiming, in part, that she was subjected to sexual harassment in violation of Title VII of the federal Civil Rights Act. The Second Circuit Court of Appeals held that O’Connor was not an “employee” within the statutory meaning of Title VII, reasoning that compensation “is an essential condition to the existence of an employer-employee relationship.” The absence of any kind of salary, wages, health insurance, vacation and sick pay, or any promise of such direct or indirect remuneration from Rockland was fatal to O’Connor’s claim of employee status, and consequently, to the Title VII count of her complaint.

EEOC’s position, too

The holding of O’Connor v. Davis apparently represents the current position of the Equal Employment Opportunity Commission, the federal agency charged with interpreting and enforcing America’s employment discrimination laws. Blair Hickman and Christie Thompson reported on this question for ProPublica:

Federal policies echo court rulings. The laws enforced by the U.S. Equal Employment Opportunity Commission, including the Civil Rights Act, don’t cover interns unless they receive “significant remuneration,” according to commission spokesperson Joseph Olivares.

“At least with respect to the federal law that we enforce, an unpaid intern would not be legally protected by our laws prohibiting sexual harassment,” Olivares said in an email to ProPublica.

It’s unclear how many interns are sexually harassed at work. The commission doesn’t keep those statistics, according to Olivares.

***

October 7 additional comments: Because I wanted to post news of this case promptly, I didn’t spend a lot of time parsing out the legal and policy implications. But I’d like to add a few words now.

The court’s holding in this case raises the related issue of whether or not unpaid internships violate federal and state minimum wage laws, a topic that I’ve addressed frequently on this blog, such as this report on the June 2013 Glatt v. Fox Searchlight Pictures decision in which a federal district court held that unpaid interns were entitled to back pay. In instances where an unpaid intern should’ve been paid under the law, the employer benefits two-fold by claiming the lack of pay renders an intern unable to bring a discrimination or sexual harassment claim, no matter how bad the underlying alleged behavior. By not paying an intern in violation of the law, the employer also may escape liability for discrimination or sexual harassment. How’s that for a bad result?!

I soon will be posting a draft of a new law review article that discusses the many recent legal, policy, and advocacy developments concerning the internship economy. It will serve as an update and sequel to my 2002 article, “The Employment Law Rights of Student Interns” (Connecticut Law Review), that discusses the above-mentioned O’Connor v. Davis decision in some detail.

For reasons I explain in my forthcoming article, I believe that the question of covering interns under employment discrimination laws should be dealt with separately from the issues of compensation under minimum wage laws.

This article was originally printed on Minding the Workplace on October 5, 2013.  Reprinted with permission.

About the Author: David Yamada is a tenured Professor of Law and Director of the New Workplace Institute at Suffolk University Law School in Boston.  He is an internationally recognized authority on the legal aspects of workplace bullying, and he is author of model anti-bullying legislation — dubbed the Healthy Workplace Bill — that has become the template for law reform efforts across the country.  In addition to teaching at Suffolk, he holds numerous leadership positions in non-profit and policy advocacy organizations.

Dylan’s Candy Bar Not So Sweet to Us, Workers Say

Wednesday, September 18th, 2013

davidyamadaWorkers at Dylan’s Candy Bar in Manhattan, the flagship location of a small chain of boutique candy stores opened by Dylan Lauren (daughter of fashion designer Ralph Lauren), are going public with their efforts to challenge low pay and erratic, part-time work schedules. Their claim: A store that serves as a “required stop” for celebrities and entertainers such as “Mary-Kate and Ashley Olsen, Katie Holmes, Janet Jackson, and Madonna,” with annual revenues around $25 million, isn’t all that interested in meeting with its workers to discuss their concerns.

After rebuff, a public petition

The workers have posted a public petition to build awareness and support:

Most of us started at less than $10/hour, with some of us even making as low as $8.50. We’re supposed to get annual reviews for raises, but they often forget to give us those.

On top of the low wages, our schedules and hours change week to week. Nearly the entire sales staff is part time, yet they expect us to have open availability, making it nearly impossible for us to juggle other obligations such as second jobs, school, and family. They refuse to give us any guarantee of the amount of hours we will work each week, and yet they get angry with us when we look for a second job.

. . . Unfortunately, when we got together to deliver our own petition to management, they shrugged it off. Ignoring our concerns, they simply told us that any issues regarding compensation could only be addressed in one-on-one meetings with managers and not together as a group.

The company’s willingness to meet only in one-to-one meetings is telling: It speaks of a divide-and-conquer (or perhaps divide-and-intimidate) approach, one that also makes it harder for workers to claim the protections of federal labor laws. These laws extend to employees engaged in “concerted activities for mutual aid and protection” but do not apply to employees acting solely as individuals.

The workers have reached out to the Retail, Wholesale and Department Store Union (RWDSU). This is the latest evidence of an emerging movement coming from members of America’s low-paid retail workforce, and it couldn’t come at a more important time.

Maybe Dylan’s unpaid HR intern can lend insights

It appears that Dylan’s employee relations philosophies apply to its interns as well. Earlier this year, Dylan’s posted a long announcement seeking an unpaid intern for its human resources department:

We are looking for a Human Resources Intern to join our team. The right candidate will be exposed to a dynamic and exciting opportunity for learning and growing in all disciplines in the Human Resources body of knowledge.

. . . Compensation: This is an unpaid internship, MetroCard will be provided

Among the minimum requirements was this ironic nugget: “Knowledge of the US labor regulatory environment and reporting requirements related to Human Resources.” Of course, an intern with such knowledge might rightly comprehend that the unpaid internship, with its long list of anticipated duties, probably violates minimum wage laws, as this U.S. Department of Labor fact sheet suggests. (A New York federal district court’s June decision on a lawsuit against Fox Searchlight Pictures provides further illumination on that point.)

Hmm, even with the huge, generous perk of a MetroCard, if I was the intern, I’d be giving serious consideration to joining the rest of the workers in circulating the petition.

This article was originally printed on Minding the Workplace on September 16, 2013.  Reprinted with permission.

About the Author: David Yamada is a tenured Professor of Law and Director of the New Workplace Institute at Suffolk University Law School in Boston.  He is an internationally recognized authority on the legal aspects of workplace bullying, and he is author of model anti-bullying legislation — dubbed the Healthy Workplace Bill — that has become the template for law reform efforts across the country.  In addition to teaching at Suffolk, he holds numerous leadership positions in non-profit and policy advocacy organizations.

Black Swan Unpaid Interns Win FLSA Claim

Wednesday, June 19th, 2013

philip_miles_smallSome unpaid interns from Black Swan sued the production company for actual wages, and guess what? They won. A couple days ago the Southern District of New York issued its opinion in Glatt v. Fox Searchlight Pictures (opinion here).

The Court broke it down into two issues:

1. Were the interns employees under the FLSA?
2. If so, did they fall under the narrow “trainee” exception?

On the first issue, the Court applied Second Circuit utilizing the “formal control” and “functional control” tests. This determination will vary from jurisdiction to jurisdiction. But, as the Court noted, “in the end, it is all about control.” And that’s pretty consistent no matter what court you’re in.

The second issue is the particularly interesting part of this case. In determining whether the interns fell under the trainee exception the Court relied heavily on the six factors identified in a DOL fact sheet from 2010 (I blogged about this back in 2010):

1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
2. The internship experience is for the benefit of the intern;
3. The intern does not displace regular employees, but works under close supervision of existing staff;
4. The employer that provides the training derives no immediate advantage from 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.

The Court ruled that the unpaid interns were employees who did not fall under the trainee exception. Now, a Time magazine article is declaring this decision The Beginning of the End of Unpaid Internships. I don’t know about that . . . but I do know that this case is generating a ton of buzz, and it’s difficult for unpaid internships to be FLSA-compliant.

This article was originally printed on Lawffice Space on June 13, 2013.  Reprinted with permission.

About the Author: Philip K. Miles III, Esq. is the creator of Lawffice Space.  He is an attorney with McQuaide Blasko, a full-service law firm headquartered in State College, Pennsylvania.  He belongs to the Labor and Employment, and Civil Litigation Practice groups.  Lawffice Space is an independent law blog focusing on labor and employment law.

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