Corporate Vigilance is Necessary to Guarantee Interns are Not Considered Employees under the Law
Across the country, students gain valuable experiences through internship programs before entering their respective workspaces. See Schumann v. Collier Anesthia, P.A., — F.3d —-, 2015 WL 5297260, (11th Cir. Sept. 11, 2015) (“modern internships can play an important—indeed critical—role in preparing students for their chosen careers.”); see also Hollins v. Regency Corp., No. 13 C 07686, 2015 WL 6526964 (N.D. Ill. Oct. 27, 2015). Some internship programs are required components of educational degree and certification programs. For example, in Florida, to become a certified registered nurse anesthetist (“CRNA”), a student must graduate from an accredited program and be nationally certified. Schumann, 2015 WL 5297260, at *1. And in order to achieve a CRNA degree, a student must complete at least 550 diverse clinical cases. Id. at *2.
Recently, 25 anesthetist students enrolled in a master’s degree program at Wolford College to become CRNAs. Id. at *1. These anesthetist students performed their clinical work at Collier Anesthesia, P.A., a company allied with Wolford College. Id. at *2. In essence, the students provided services for patients related to anesthesia but were unpaid financially for their work. In turn, the students sued Wolford College, Wolford College’s owner, and Collier Anesthesia, P.A. to recover unpaid wages and overtime under the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. (“FLSA”). Id. at *1.
The students viewed their clinical requirements as more than educational requirements, but instead as work, and viewed themselves as more than students, but instead as employees. Id. at *3. The students had this view despite signing agreements in the Wolford College Handbook, that their clinical participation would not deem them employed as nurse anesthetists by Defendants and despite wearing scrubs affixed with a Wolford College logo while performing clinical assignments. Id. The students argued that Defendants unlawfully failed to compensate them with wages and overtime pay.
At this date, whether the students are considered employees under the FLSA is still outstanding because the Eleventh Circuit has remanded the case to the district court for further review. The Eleventh Circuit, however, has provided new guidance as to how this question should be resolved. See id. at *7. That is, the Eleventh Circuit has adopted the Second Circuit Court of Appeals’ Glatt factors in determining whether an intern is considered an employee under the law.
The Glatt factors are as follows:
The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggest that the intern is an employee—and vice versa.
The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
The extent to which the internship’s duration is limited to the period in which the internship provides 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 to the intern.
The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.
Id. at *10 (citing Glatt v. Fox Searchlight Pictures, Inc., 791 F.3d 376, 384 (2d Cir. 2015)).
Notably, a recent Illinois District Court analyzed this anesthesia case and applied the Glatt factors to its own case involving cosmetology students. See Hollins, 2015 WL 6526964. Like the anesthesia students, the cosmetology students enrolled at Regency Beauty Institute are required to complete at least 1500 hours of clinical work to receive their cosmetology licenses. Id. at *1. The cosmetology students were not paid for their clinical work, but Regency made a profit for the clinical work these students performed. Id. at *2. Like Schumann, the cosmetology students viewed themselves as employees under the FLSA. Id. at *1. The Illinois Court, however, did not agree. Instead, the Court found the students received a greater benefit from their relationship with Regency, despite Regency making a substantial profit from the students’ work, and thus were not deemed employees. Id.
In the coming years, the law is expected to continually evolve as to whether interns should be considered employees. What is clear now is that labeling an individual as an intern alone is not enough. Companies must act vigilantly to ensure their interns are deemed interns under the law, rather than as employees, akin to how companies now ensure independent contractors are not deemed employees. After all, the Hollins case has taught us that companies must ensure they are not receiving the greater benefit from the company-intern relationship. Prudent employers should stay apprised of the developing law in this area including updates to the Department of Labor’s Fact Sheet #77B.