Recently, the news has contained reports about litigation over the status under federal labor laws of unpaid interns. Such internships can provide valuable training to students as well as offering a foot in the door of a future employer. However, internships may at times feel more like real work than educational experiences. Interns may feel that employment-like experiences entitle them to employment-like benefits such as regular pay and the protection of federal labor laws. When does an internship cross over from being an educational experience into employment? The Eleventh Circuit addressed that issue in Schumann v. Collier Anesthesia, P.A., Case No. 14-13169 (decided Sept. 11, 2015).
The plaintiffs in the case were students working towards a Master’s Degree at Wolford College in Florida with the goal of becoming certified registered nurse anesthetists. The students in their fourth semester of study participated in a clinical program. Participation in that program was required to obtain their degree and to obtain the necessary certification under Florida law. During the students’ clinical phase, each course has an instructor and a syllabus and the school required daily evaluations to be completed by the student and their supervisor. The program also included end-of-semester evaluations. The plaintiff students obtained their clinical education at facilities where Collier Anesthesia practiced anesthesiology. The plaintiff students claimed that Collier benefitted financially from their services. They also contended that they were working more than 40 hours per week and more than eight hours per day, having to work on weekends, holidays, and between semesters. The students contended that Collier was using their services in the place of those of licensed Certified Registered Nurse Anesthetists. The plaintiff students also contended that Collier was entitled to receive extra reimbursement from Medicare for the services of the Certified Registered Nurse Anesthetists that supervised the students.
The students sued Collier Anesthesiology and the college contending that they were entitled to a minimum wage and overtime pay under federal labor law. The district court granted the defendants summary judgment. The Eleventh Circuit reversed.
The focus of the Eleventh Circuit was not the merits of the contentions of the parties. Instead, the Court was focused on the test to be applied for determining whether or not an employment relationship existed between the students and defendants. The district court had relied upon an older United States Supreme Court case, Walling v. Portland Terminal Co., 330 U.S. 148 (1947), and a Department of Labor handbook that interpreted the test adopted in the Portland Terminal case. However, the Portland Terminal case involved a railroad that was training prospective yard brakemen who might eventually obtain employment with that railroad as brakeman. The Eleventh Circuit concluded that the Department of Labor test based on the particular circumstances at issue in the Portland Terminal case did not fit the circumstance of students working to fulfill degree requirements or a professional licensing obligation. The courts sought to develop a test that was better suited to the types of internships needed to obtain academic degrees and professional certifications.
Following the Second Circuit, the Court adopted a seven-factor test designed to weigh the benefits of the internship program to the students against the potential for the employer who implements the program to take unfair advantage of the labor of the students. The Court believed that this modified test “tweaked” the test employed by the Supreme Court in the Portland Terminal case to make it applicable to modern-day internship programs. In the case at hand, the Court remanded the case back to the District Court to apply the new test.
This case will be important for any party participating in an internship program. In applying the test, the focus is on whether the program is focused on educating the student or profiting the party providing the internship.
The decision is available at http://media.ca11.uscourts.gov/opinions/pub/files/201413169.pdf