7/21/2019 Unpaid and Unprotected http://slidepdf.com/reader/full/unpaid-and-unprotected 1/26 GEORGETOWN UNIVERSITY LAW CENTER Unpaid and Unprotected Unpaid Interns Are Denied Needed Protection from Workplace Discrimination and Harassment Under Title VII Matthew Lashof-Sullivan* 5/12/2015 *J.D., Georgetown University Law Center, 2016. I would like to thank my advisor, Gary Peller, for giving me the time and space needed to work on this project. His recommendations and discussions about animating principles were inspiring and invaluable. I would also like to thank Meg Lashof-Sullivan for her patient support throughout the writing process.
Unpaid Interns Are Denied Needed Protection from Workplace Discrimination and Harassment Under Title VII
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II. Wage and hour laws and anti-discrimination laws protect workers
from the power of their employers.
Scholars and commentators have long recognized that employers have far
greater power than employees in the employer/employee relationship.2 This is
derived from all people’s need for some income to purchase basic food, clothing, and
shelter, and the fact that a typical worker derives almost 100% of her income from
her employer. By contrast, employers’ profits typically don’t drop to zero with the
loss of any one employee. Thus, the cost of quitting to an employee is her entire
income, while the cost to an employer of terminating an employee is only a portion
of total income.
Because of this disparity in power, employers are largely able to set the terms
of employment.3 One would expect that competition among employers for talent
would tend to mitigate this power, but this effect is limited because few employees
are irreplaceable in their employers’ businesses, while employees are comparatively
less mobile.4 Terms typically set by employers include hours of work, wage levels,
job qualifications, and working conditions. Some employers even attempt to
regulate their employee’s non-work-related behavior.5 These exercises of power are
not the subject of this note, but serve to illustrate the level of control that employers
can often exercise over their employees.
2 See generally, e.g., Lawrence Blades, Employment At Will Vs. Individual Freedom: On Limiting the Abusive
Exercise of Employer Power , 67 COLUM. L. R EV. 1404 (1967).3 See id. at 1405 – 06.4 See id. at 1412 – 13.5 Id. at 1407. See also Herx v. Diocese of Fort Wayne-South Bend, Inc., 772 F.3d 1085, 1086 – 87 (7th Cir. 2014)
(English teacher at Catholic school fired for using fertility treatments); David Kravets, Worker Fired For Disabling
GPS App That Tracked Her 24 Hours a Day, ARS TECHNICA (May 11, 2015), http://arstechnica.com/tech-
See id at 2.8 Although, at the same time that the government enacts laws to restrain the power of employers, it itself also solicits
even highly educated people to work for no pay in positions lasting up to an entire year. See, e.g. Uncompensated
Special Assistant United States Attorney, U.S. DEPARTMENT OF JUSTICE (Jan. 23, 2015),
http://www.justice.gov/legal-careers/job/uncompensated-special-assistant-united-states-attorney-2 (unpaid position
requiring J.D., at least one year of post-graduation experience, a one year “service commitment”, and an agreement
not to do any compensated outside practice of law).9 29 U.S.C. § 201 et seq. (West, Westlaw through 2015). FLSA has this effect where it applies, but it contains many
exemptions such as for certain agricultural workers, fishermen, and even more specific categories like criminal
investigators and switchboard operators. 29 U.S.C. § 213 (West, Westlaw through 2015).
by courts as exempting employers from following the very laws that are designed to
reign in employer power. The remainder of this note discusses how courts have
reached this conclusion, the effects this has on interns, and possible judicial and
legislative solutions to this problem.
III. Are interns trainees? The Supreme Court misunderstood the nature
of the intern/employer relationship.
The Fair Labor Standards Act unhelpfully defines an employee as “any
individual employed by an employer.”12 However, the act then clarifies that
“employ” includes to “suffer or permit to work”.13 This definition is so expansive it
would seem to cover not only interns and trainees, but also volunteers. However, in
Walling v. Portland Terminal Co., the Supreme Court interpreted FLSA not to
include trainees who work only for their own benefit.14 The court analogized the
company’s training program to a school, reasoning that of course the trainees, if
they took similar courses in a vocational school unconnected with the railroad,
would not be entitled to wages.15 The Court cites several facts to support this
proposition: (1) the training does not necessarily lead to a job; (2) the trainee does
not displace any actual paid workers; (3) the railroad’s operations are not expedited
or advanced.16 These criteria led the Court to conclude that the entire program was
12 29 U.S.C. § 203(e) (West, Westlaw through 2015).13 29 U.S.C. § 203(g) (West, Westlaw through 2015). For a discussion of the context and original meaning of “suffer
or permit to work”, see Bruce Goldstein et al., Enforcing Fair Labor Standards In The Modern American
Sweatshop: Rediscovering The Statutory Definition Of Employment , 46 UCLA L. Rev. 983 (1998 – 1999).14 330 U.S. 148, 152 (1947). The Court held that the act “obviously” doesn’t cover persons who work for their own
advantage on the premises of another. Otherwise, all students would be employees of the schools they attended.15 Id. at 152-153.16 Id. at 149 – 150.
full time at specified hours and were subject to all the hazards and exertions of
ordinary railroad brakeman work22, which is apparently quite dangerous.23 During
this time, they were subject to constant evaluation by the foreman to see if they are
ready to be put “on the board” as eligible for employment.
Thus, in the process of reaching the result, the Supreme Court
mischaracterized the relationship of the trainee to the employer. The Court
described the program as being like a vocational school, but really it was more like
an extended job application and interview.24 This difference matters for modern-day
interns, because interns (as non-employees) have been held not to be protected by
Title VII of the Civil Rights Act against workplace discrimination and harassment.
Cases reaching this result have relied on this fundamentally educational
understanding of the relationship between the intern and the employer to hold that
interns are not vulnerable to the same extent as employees because they are not
bound by economic necessity, and are always free to leave if their training is
unsatisfactory.25 Since internships often function more like extended auditions than
like the vocational education the court analogized to in Portland Terminal, the
intern is actually more vulnerable to discrimination and harassment because she is
22 Id. at 220 (Magruder, J., dissenting).23 See Carl Landeck & Roger Thorne, The Pennsylvania Railroad During World War II, Tredyffrin Easttown
Historical Society 45 (2005) http://www.tehistory.org/hqda/pdf/v42/Volume42_N2_035.pdf (“The job of the freight
brakeman was one of the most dangerous jobs on the railroad. . . .” ).24 Walling v. Portland Terminal Co., 330 U.S. 148, 153 (1947). (“The Fair Labor Standards Act was not intended to
penalize railroads for providing, free of charge, the same kind of instruction [as one would receive at a vocational
acutely aware that she is constantly being evaluated by her supervisors as she
seeks the job offer or glowing letter of recommendation.
IV.
Interns are near-universally excluded from the protection of Title
VII by courts relying on Portland Terminal’s misunderstanding of the
intern’s benefits.
There have been a number of cases in which interns have sued for
employment discrimination. They have almost universally lost because courts have
held that they are not “employees” for the purposes of Title VII. For example, in
Tadros v. Coleman,26 a doctor accepted an unpaid position at Cornell Medical
College. When he later filed a Title VII national origin discrimination charge for
failure to hire him as a full-time faculty, his case was dismissed without any
determination of whether he was discriminated against or not because he was not
an “employee”.
In Haavistola v. Community Fire Co. of Rising Sun,27 a volunteer firefighter
sued for sex discrimination after she was allegedly retaliated against for filing a
sexual assault claim against a co-worker. The Fourth Circuit remanded the case,
not so that the merits of whether the plaintiff was retaliated against could be
litigated, but to determine whether the benefits28 she received were enough to
qualify as compensation.
26 898 F.2d 10 (2d Cir. 1990).27 6 F.3d 211 (4th Cir. 1993).28 The volunteer firefighters, while not receiving salary or pension benefits, were eligible for workers compensation,
group life insurance, and disability insurance due to the hazardous nature of firefighting. Haavistola, 812 F. Supp. at
FLSA purposes if it had functional control over workers.40 The Second Circuit
derived this test from Rutherford Food Corporation v. McComb41, a Supreme Court
case decided in 1947, well before Lippold.42 The Third Circuit used a similar test in
Enterprise Rent-A-Car for joint employer status under the FLSA, which is also
intended to determine whether the alleged employer has functional control over the
employee.43
The case for functional control in Lippold is even stronger than it was in
Zheng , and Ms. Lippold easily meets all of the Zheng factors and all four of the
Enterprise factors. Duggal Color’s premises were the only place that Lippold
worked, she worked under the supervision of Duggal’s employees, Duggal controlled
her hours and assignments, and Duggal had control over her timesheets that
needed to be submitted to CCNY in order for Lippold to receive pay and credit. In
short, Duggal Color had almost complete control over Lippold’s day-to-day activities
and exercised veto power over her pay and evaluation. There is no good reason why
the court could not have found Duggal Color to be Lippold’s joint employer. Instead,
it myopically focused on where Lippold’s paychecks were coming from, an approach
40 Id. at *72 – 75. The court applied these factors determine functional control: (1) whether [the putative joint
employer]’s premises and equipment were used for the plaintiffs' work ; (2) whether the [direct employer] had a
business that could or did shift as a unit from one putative joint employer to another; (3) the extent to which
plaintiffs performed a discrete line- job that was integral to [putative joint employer’s] process of production; (4)
whether responsibility under the contracts could pass from one subcontractor to another without material changes;
(5) the degree to which the [putative joint employer] or their agents supervised plaintiffs' work; (6) whether plaintiffs worked exclusively or predominantly for the [putative joint employer].41 331 U.S. 722 (1947).42 Zheng , 355 F.3d at 72.43 See In re Enterprise Rent-A-Car Wage & Hour Employment Practices Litigation, 683 F.3d 462, 469 (3rd. Cir.
2012). The factors the 3rd Circuit applies are: (1) authority to hire and fire employees; (2) authority to promulgate
work rules and assignments, and set conditions of employment, including compensation, benefits, and hours; (3)
day-to-day supervision, including employee discipline; (4) control of employee records, including payroll,
insurance, taxes, and the like. The court then notes that “[t]hese factors are not materially different than those used
by our sister circuits, and reflect the facts that will generally be most relevant in a joint employment context.”
VI. The Portland Terminal conception of a legitimate trainee conflicts
with courts’ resolutions of Title VII intern cases.
The Court in Portland Terminal described the trainees as working on the
railroad’s premises “for their own advantage.”53 The Court explicitly compared the
education the trainees were getting to an education at a vocational school. The
Department of Labor has published a policy fact sheet interpreting the Supreme
Court’s decision in Portland Terminal, laying out six factors which are relevant to
the determination of whether an internship program meets the trainee exclusion.54
A circuit split currently exists on the applicability of this test. The 5th, and 8th, and
10th Circuits follow the Fact Sheet #71 test to some degree.55 The 4th and 6th
Circuits instead apply a “primary benefit” test, asking whether the putative trainee
or employer receive the primary benefit of the relationship.56
53 Portland Terminal , 330 U.S. at 152.54 Fact Sheet #71: Internship Programs Under the Fair Labor Standards Act , U.S. DEPARTMENT OF LABOR (2010),
available at http://www.dol.gov/whd/regs/compliance/whdfs71.htm. The test from Fact Sheet #71 is:
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.
If all of the factors listed above are met, an employment relationship does not exist under the FLSA, andthe Act’s minimum wage and overtime provisions do not apply to the intern. This exclusion from the
definition of employment is necessarily quite narrow because the FLSA’s definition of “employ” is very
broad.
55 See Donovan v. American Airlines, Inc., 686 F.2d 267, 271 (5th Cir. 1982) (citing an earlier version of fact sheet
71); Petroski v. H & R Block Enterprises, LLC, 750 F.3d 976, 982 (8th Cir. 2014); Reich v. Parker Fire Protection
Dist., 992 F.2d 1023, 1025-26 (10th Cir. 1993) (citing an earlier version of fact sheet 71 as a balancing test).56 See McLaughlin v. Ensley, 877 F.2d 1207, 1209 (4th Cir. 1989); Solis v. Laurelbrook Sanitarium and School,
As explained by the commissioner in Northwestern University, an education
has economic value. This transfer of economic value from the employer to the intern
can be considered compensation just as it was considered compensation when
transferred from university to student-athlete. This compensation was enough to
support employee status under the National Labor Relations Act57 and it should
also be sufficient under Title VII. Both the NLRA and Title VII contain unhelpful
definitions of “employee,” and thus partially rely on the common law employee
relationship.58 However, this reliance on the common law is tempered by the canon
that remedial statutes should be liberally construed.59 Since both statutes rely on
the same source for their tests of employee status, and both statutes are remedial, it
is legitimate to compare tests of employee status under them. Therefore, interns
satisfying the Portland Terminal trainee test and thus receiving vocational training
should have their education counted as compensation (just as it was in
Northwestern University) and thus be considered employees for Title VII purposes.
If an intern is not “working for [her] own advantage”, then she would not
legitimately be classified as a trainee according to Portland Terminal.60 Of course,
the idea that the company gets no benefit from the deal is a legal fiction — if the
company really got no benefit they would not offer internships. In Portland
57 29 U.S.C. § 151 et seq. (West, Westlaw through 2015).58 29 U.S.C. § 152(3) (West, Westlaw through 2015) (NLRA; “The term ‘employee’ shall include any employee. . .
.”); 42 U.S.C. § 2000e(f) (West, Westlaw through 2015) (Title VII; “‘employee’ means an individual employed by
an employer . . . .”). See also FedEx Home Delivery v. N.L.R.B., 563 F.3d 492, 497 (D.C. Cir. 2009) (NLRA;
common law “remains in play”, but emphasis shifted); Wilde v. County of Kandiyohi, 15 F.3d 103, 105 (8th Cir.
1994) (Title VII; nearly all circuits use a hybrid of the common law and “economic realities”) .59 See, e.g., Dennis v. Higgins, 498 U.S. 439, 443 (1991).60 See supra Part III.
money it would cost to acquire that training elsewhere,71 or else could award the
value of the labor in the same way that courts do in quantum meruit constructive
contract cases. For interns properly classified as trainees, the value of the labor
would probably be minimal, since to even be a trainee, the employer must derive no
immediate advantage from the trainee’s labor.72 Therefore, for interns properly
classified as trainees, the measure of relief should be the value of the training that
they should have received. This measure reflects the understandings of the parties
as well as possible — that the intern would receive training.
For the vast bulk of interns, neither of the narrow categories of volunteer or
trainee are likely to fit. While there has been historically little litigation alleging
abuses of wage and hour laws under the guise of internships, more such cases are
starting to be filed.73 In the meantime, many internships violate the Portland
Terminal/Fact Sheet #71 test but interns are reluctant to come forward, perhaps
because they hope to impress their supervisors and secure paid employment.
However, in the case where the employer has discriminatorily harassed or
dismissed the intern, there is little chance of continuing goodwill by the employer
anyway. Therefore, it is possible that once Title VII is made available to interns,
they may be more likely to litigate discrimination claims than they have been to
litigate FLSA claims.
71 Cf. Portland Terminal , 330 U.S. at 152 – 53 (comparing the training received to learning at a vocational school).72 Indeed, the employers operation may occasionally be hindered. See Fact Sheet #71: Internship Programs Under
the Fair Labor Standards Act , U.S. Department of Labor (2010), available at
http://www.dol.gov/whd/regs/compliance/whdfs71.htm.73 See, e.g., Glatt v. Fox Searchlight Pictures, 293 F.R.D. 516 (S.D.N.Y. 2013).
For these misclassified interns, the justification for the back pay remedy
hinges on the interns entitlement to wages under the Fair Labor Standards Act. By
combining the FLSA’s unpaid wage remedies74 with Title VII’s back pay remedies,
courts can fashion relief to make interns whole while providing appropriate
deterrent to employers. Since Title VII authorizes whatever equitable relief the
court shall find appropriate, the court could apply the FLSA double damages
remedy to the time actually worked under FLSA itself, and apply it to the time after
discriminatory discharge as “other equitable relief ” under Title VII.75
IX.
Conclusion
Courts have misunderstood why people seek and accept internships, and
therefore misapprehend the protections against discrimination that interns require
and undermined laws meant to limit employer power over employees. Interns fall
into three categories: Trainees within the meaning of Portland Terminal and
Factsheet #71, volunteers within the definition in 29 C.F.R. § 553.101(a), and
misclassified employees who should be entitled to wages. Neither courts nor
employers have been rigorous about defining which one interns are.
Few interns are bona fide volunteers. For trainees, courts and agencies have
been flexible when evaluating what counts as compensation for purposes of other
laws that rely on employee status, such as where college football players have
attempted to collectively bargain under the National Labor Relations Act. For bona
74 Under the Fair Labor Standards Act, employers are liable for double damages for unpaid wages. 29 U.S.C. §
216(b) (West, Westlaw through 2015) (employer “shall be liable to the employee or employees affected in the
amount of their unpaid minimum wages . . . and in an additional equal amount as liquidated damages .”). 75 42 U.S.C. § 2000e-5(g) (West, Westlaw through 2015) (the court may order “any other equitable relief as the