The steady stream of cases filed by unpaid interns claiming to be owed minimum wage and overtime compensation under the Fair Labor Standards Act remains on the rise after highly publicized court decisions and settlements. However, courts continue to struggle with how to determine if and when an intern should be paid for work under a law that was passed more than 70 years ago.
The Eleventh Circuit Court of Appeals became the most recent federal appellate court to chime in on this subject in a case arising out of Florida.
The Florida case involved a group of graduate students studying to become licensed nurse anesthetists (yes, the ones who help put people to sleep – clinically speaking, of course). These students were enrolled in a Master’s program, which required participation in at least 550 surgical procedures before being eligible for licensure in Florida. Not surprisingly, this requirement was imposed to promote patient safety by ensuring students were able to perform the essential functions of their job once they joined this field. The interns sued claiming they should be paid for their 40-50 hour work weeks arguing that it was the medical clinics that primarily benefited from this free labor, not the interns. The Trial Judge ruled against the interns. On appeal, the 11thCircuit Court of Appeals did not decide whether the interns should be paid. Instead, it sent the case back to the Trial Judge to decide the issue using a different legal standard. The 11th Circuit rejected the test utilized by the U.S. Department of Labor (DOL), which called for a rigid approach to the inquiry, in favor of a more flexible standard in line with the purpose behind modern internships.
Under this new test, the 11th Circuit stated that the federal courts in Georgia, Alabama and Florida should focus on the following factors:
- The extent to which the intern and employer understand that there is no expectation of compensation as part of the internship.
- The extent to which the internship provides training similar to that received in an academic setting, including hands-on training.
- The extent to which the internship is tied to the intern’s formal educational program, such as the receipt of academic credit.
- The extent to which the internship corresponds with the academic calendar.
- The extent to which the internship is limited in duration to provide the intern with beneficial learning.
- The extent to which the intern’s work complements (rather than displaces) the work of paid employees while providing significant educational benefits.
- The extent to which the intern and employer understand that there is no entitlement to a paid position at the conclusion of the internship.
In enunciating this new standard, the 11th Circuit expressly acknowledged that no one factor is dispositive. Simply because the employer obtains a benefit from providing an internship does not end the analysis, as some claimed would be the case under the DOL standard. The Court also noted the possibility of other factors not described above becoming relevant to the inquiry.
Some employers are rejoicing at this holding believing that for once, common sense has prevailed. But bear in mind that the 11th Circuit acknowledged that one size may not always fit all scenarios when it comes to the unpaid internship. There may be instances where an intern may be an employee for some purposes but still properly considered an unpaid intern for other purposes.
Looking forward, one thing is certain. Litigation will continue as the courts try to navigate through the murky waters of the unpaid internship. For this reason, unless your internship involves matters of life or death (such as learning how to properly anesthetize patients before surgical procedures), tread carefully if you dare.