Labor and Employment Law Weekly Update

Bulletproofing Your Internship Programs

Internships abound. A recent New York Times article (http://www.nytimes.com/2010/07/04/fashion/04Internship.html?_r=3&scp=1&sq=internship&st=cse) indicated that in 1992, only 17 percent of graduating students held internship positions. In 2008 that figure skyrocketed to 50 percent. Businesses across the country have a bevy of internship programs where relatively young and inexperienced students or post-graduates can obtain unpaid work. These interns sacrifice the immediate monetary gain of a paying job in the hopes of gaining job experience that will be more valuable to them in the long haul. But be warned: just because an intern is willing to work for free does not mean that you can legally take them into your business as an unpaid employee.

The U.S. Department of Labor (DOL) has made clear that unpaid interns are often covered by the Fair Labor Standards Act (FLSA). This means that private-sector interns who qualify as "employees" rather than "trainees" typically must be paid at least the minimum wage (http://www.dol.gov/whd/minimumwage.htm), and must be paid overtime compensation (http://www.dol.gov/whd/overtime_pay.htm) if they work more than 40 hours in a workweek. Thus some, but not all, interns are employees under the FLSA.

An intern whose work serves only his or her own interest is not an employee of a company that simply provides aid or instruction to the intern. Whether an intern is an employee depends on the facts and circumstances surrounding the internship, and the DOL recently re-published a list of the six factors (http://www.dol.gov/whd/regs/compliance/whdfs71.pdf) used to determine whether an intern is an employee under the FLSA (and thus must be paid minimum wage and overtime). These six factors are as follows:

• The internship, even though it includes actual operation of the facilities of the employer, is similar to training that would be given in an educational environment
• The internship experience is for the benefit of the intern
• The intern does not displace regular employees, but works under close supervision of existing staff
• 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
• The intern is not necessarily entitled to a job at the conclusion of the internship
• 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, then an employment relationship does not exist under the FLSA, and the act’s minimum wage and overtime provisions do not apply to the intern.

The “R” Word: Are You Taking Steps to Avoid Future Retaliation Claims?

A recent case (http://case.lawmemo.com/7/pickett.pdf) illustrates the importance of taking steps to protect your company from potential retaliation claims. Ms. Danielle L. Pickett, a former employee and a housekeeper at a nursing home, claimed that she had been fired in retaliation for repeatedly complaining about being sexually harassed by nursing home residents. Shortly after complaining about being “cornered and groped” by a resident, Ms. Pickett was told by the facility’s administrator that it was “best she part ways with the company.” A jury found in favor of Ms. Pickett.

This case is a reminder of the difficulty of defending and succeeding on a retaliation claim after an employee raises a complaint of harassment or discrimination. So what should an employer do when one of its low-performing employees begins to complain about unlawful activity — which often happens just as he or she is on the verge of being disciplined and/or terminated?

• Maintain and enforce a comprehensive written policy that assures employees that they will not be subject to discrimination, harassment, or retaliation. Establish a procedure for bringing forth complaints and assure employees that they will not be subjected to any retaliation for doing so.
• Maintain a workplace where constructive criticism and a frank assessment of employees’ performance is welcome. It is preferable to address any shortcomings in work performance at the outset so that the employee is put on notice and has an opportunity to correct his/her deficiencies.
• If an employee’s performance continues to deteriorate, even after making a complaint, continue to monitor and address the performance issues with the employee as would occur in the normal course of business. Treat the employee as you would other employees who have not yet made a complaint. Being able to show that you treated others who did not complain the same way is great evidence on nondiscrimination.
• Any complaint of unlawful activity must be taken seriously. A thorough investigation should be commenced immediately. After the investigation is completed, report the results of the investigation to the employee. Promptly take any remedial action, if necessary. The employee who brought forth the complaint should be assured that he or she will not be retaliated against. Provide the employee with the names of specific individuals to whom the employee can report any perceived retaliation.
• Document, document, document! The employee’s supervisors and managers should maintain documentation of any of the employee’s shortcomings. Remind the supervisors and managers that all documentation concerning an employee’s performance should be objective in tone and should avoid referencing the employee’s complaint.

Legal News is part of our ongoing commitment to providing legal insight to our clients and colleagues. If you have any questions about or would like to discuss these topics further, please contact your Foley attorney or any of the following individuals:

Authors

Adam C. Losey
Orlando, Florida
407.244.7136
alosey@foley.com

Kristy Kunisaki Marino
San Francisco, California
415.984.9832
kmarino@foley.com