SECOND CIRCUIT INSTITUTES A NEW STANDARD FOR UNPAID INTERNSHIPS

Posted by on Jul 17, 2015 in FLSA

By: Susan L. Swatski, Esq. (sswatski@hillwallack.com) and Bryan A. Coe, Summer Associate (bcoe@hillwallack.com)

An unpaid internship can be beneficial to both interns and employers. Interns can gain valuable experience in their field while employers can help educate people who one day may work for their companies. However, confusion exists as to what type of experience must be provided to an intern for the experience to replace a paycheck. By providing an unpaid internship instead of a paid position, employers put themselves at risk of legal action, which can result in fines and back pay to the intern. A recent decision from the United States Court of Appeals for the Second Circuit provides employers with much needed guidance to craft their internship programs.

In most states, employers must conform to the United States Department of Labor’s Intern Fact Sheet when deciding if an internship qualifies to be unpaid. The DOL’s requirements are: (1) the internship should be similar to training that would be provided in school; (2) the experience should be for the student’s benefit; (3) the intern should not be a replacement for a regular employee, but instead, should be under the supervision of a regular employee; (4) the employer must provide training and not derive an immediate advantage from the intern’s activities; (5) the intern is not entitled to a job at the end of the internship; and (6) both the employer and the intern have an agreement that the intern will not receive payment for work performed. According to the Department of Labor, all six items must be present for an internship to qualify as unpaid.

In Glatt v. Fox Searchlight Pictures, Inc., the United States Court of Appeals for the Second Circuit determined that the proper question to ask is whether the intern or the employer is the “primary beneficiary” from the relationship. The Court of Appeals replaced the Department of Labor’s six factor Intern Fact Sheet with the following seven non-exhaustive factors to aid in answering whether an internship can be unpaid: (1) the extent to which the intern and the employer understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa; (2) 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; (3) the extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit; (4) the extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar; (5) the extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning; (6) 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; and, (7) 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. When deciding if a person should be classified as an employee, employers should balance these factors. No one factor is dispositive to conclude the intern should be not considered an employee.

A second important point to be taken away from the Glatt ruling is that interns will find it much harder to certify a class to bring their claims, because although the primary beneficiary test may be partially answered using generalized proof, the more substantial questions require individualized proofs to very fact specific inquiries.

Employers should be aware of the Second Circuit’s break from the DOL’s Intern Fact Sheet and account for the distinctions between the “primary beneficiary test” and the Fact Sheet when creating an internship program. As a general matter, when creating an internship program, employers should focus on the educational component. Programs such as guest speakers and information sessions can help tip the scale towards the internship being more beneficial to the employee. The greater the amount of educational opportunities that are present, the more likely a court will find an intern to be the “primary beneficiary” of the relationship.

Currently, only employers who are located in New York, Connecticut and Vermont are affected by this ruling. However, employers in other states should be aware of this ruling because it shows a change in thinking regarding unpaid internships. If your company offers an unpaid internship, you should have it reviewed by skilled employment law counsel to ensure the program complies with the law in your jurisdiction.

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EMPLOYER RIGHTS IN THE EVER CHANGING LANDSCAPE OF MEDICAL MARIJUANA USE

Posted by on Jul 17, 2015 in Disability Discrimination, Wrongful Termination

By: Susan L. Swatski, Esq. (sswatski@hillwallack.com) and Bryan A. Coe, Summer Associate (bcoe@hillwallack.com)

The legal landscape surrounding marijuana laws has drastically changed over the last decade. Currently, 23 states, including New Jersey and New York, allow the use of medical marijuana despite the federal government’s classification of marijuana as a schedule 1 illegal drug. Pennsylvania currently has legislation pending to legalize the use of medical marijuana. The conflict between state and federal law leaves employers in states that protect against retaliation for an employee’s lawful activities guessing whether they can test for, and prohibit, the use of medical marijuana. A recent Colorado Supreme Court unanimous decision may help to alleviate some of this guesswork.

In Coats v. Dish Network, the court considered whether medical marijuana use was a “lawful activity” under Colorado’s Lawful Activities statute. This statute made it illegal for an employer to terminate an employee for engaging in a lawful activity, off the premises, during non-working hours. The plaintiff in the case, is a registered medical marijuana patient, who brought suit against his former employer for wrongful termination after he was fired for using medical marijuana outside of work hours. In determining the meaning of a “lawful activity”, the court rejected the argument that the Colorado State Assembly intended “lawful” to mean lawful under Colorado law. The court found that a “lawful activity” is an activity which complies with state and federal law. As a result, the court found that because the plaintiff’s medical marijuana use was illegal under federal law, the use was not protected by Colorado’s Lawful Activities statute.

New Jersey’s medical marijuana law has a provision where employers are not required to “accommodate the medical use of marijuana in any workplace.” New York’s medical marijuana law classifies patients as “disabled” making it illegal for employers to discriminate against medical marijuana users. New York’s law precludes an employer from taking disciplinary action against certified medical marijuana users for failing a drug test. Further, employers may need to make a reasonable accommodation for an employee who uses medical marijuana, although this second point is still contentious and unsettled. Pennsylvania’s pending legislation is similar to New York’s in that an employer could not consider a positive drug test for marijuana when making an employment decision unless that employee was impaired by or possessed marijuana while on the employers premises or during working hours.

The Dish Network decision follows decisions from courts in California, Oregon, and Washington – each of these states permit the use of medical marijuana – that employers can fire an employee for medical marijuana use. The legal landscape surrounding the medical use of marijuana remains dynamic, particularly as support grows for the federal government lightening its stance on medical marijuana’s drug classification. All businesses that have drug testing policies should be aware of this changing legal landscape.

Employers should seek legal counsel to accurately assess their drug testing policies to confirm compliance with all applicable laws. If you feel this is an area of concern for your business, seek legal counsel from one of our skilled employment law attorneys. We are ready to help.

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Medical Marijuana Use or Employer Rights – Which Comes First?

Posted by on Sep 26, 2014 in Uncategorized

By: Susan L. Swatski, Esq. (sswatski@hillwallack.com)

On September 30, 2014, the Colorado Supreme Court is set to hear argument in Coats v. Dish Network, L.L.C., about an employee’s right to use medical marijuana during non-work hours, and the employer’s right to test for the drug and discipline users. At issue is the right of an employee to use medically prescribed marijuana to help with painful spasms when he/she is not at work. Dish Network contends that it should not have to retain employees whose marijuana use violates federal law and whose performance as a result of their marijuana use could be an issue.

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Courts Pin Back NLRB Rulemaking

Posted by on Jul 12, 2013 in NLRB

By: Deniz S. Uzel, Summer Associate (duzel@hillwallack.com and Susan L. Swatski, Esq. (sswatski@hillwallack.com

On June 14, 2013, the Fourth Circuit Court struck down the National Labor Relations Board’s rule that would have required six million private employers to hang posters about workers’ right to unionize or to face penalties for anti-union bias for refusing. The court noted that even the National Mobilization Against Sweatshops, a worker-advocacy group, admitted that very few workers learn about their rights through postings. The NLRB has rarely engaged in rulemaking in its seventy-seven years of existence, but the Fourth Circuit’s ruling makes clear that when it does, it may be acting outside of its legal authority. The Court explained that the part of the National Labor Relations Act that gives the Board power to issue rules, Section 6, does not allow the issuance of this type of rule because the NLRB is supposed to be a reactive agency. Accordingly, the court found that the posting rule is outside of the bounds of the law.

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Stakes Run High In The Arbitration Arena As Supreme Court Unanimously Holds That “Convincing A Court Of An Arbitrator’s Error – Even His Grave Error – Is Not Enough"

Posted by on Jul 12, 2013 in Uncategorized

By: Susan L. Swatski, Esq. (sswatski@hillwallack.com and
Deniz S. Uzel, Summer Associate (duzel@hillwallack.com

On June 10, 2013, the United States Supreme Court unanimously affirmed Oxford Health Plans v. Sutter, exhibiting a cautionary warning to employers and the particular terms they may want to include in the arbitration clauses of their employment agreements.

This case involved a situation where parties bargained for broad contractual language, stating specifically that any disputes were to be “submitted to final and binding arbitration.” The contract was silent concerning class arbitration. Sutter brought a class action claim against Oxford Health Plans. The parties agreed that the arbitrator would decide whether this broad contractual language would be inclusive of class arbitrations. The arbitrator ultimately found that since the language included the phrase “all such disputes,” class arbitrations were permitted.

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