Fox Searchlight case confirm that unpaid interns are a dying breed

Out of the millions of page-views this blog has received over the six-years of its existence, the most popular post (by an almost three-to-one margin over its closest competitor) is You should pay attention to this post if you have unpaid interns. In that post, I discussed a lawsuit filed by two unpaid interns who claimed that they should have been paid while working for Fox Searchlight pictures.

Last week, the United States District Court for the Southern District of New York agreed.

In Glatt v. Fox Searchlight [pdf], the Court applied the Department of Labor’s six-factor test and determined that that the internships should have been paid.

1. Is the training similar to what would be given in a vocational school or academic educational instruction?

While classroom training is not a prerequisite, internships must provide something beyond on-the-job training that employees receive…. Footman did not receive any formal training or education during his internship. He did not acquire any new skills aside from those specific to Black Swan’s back office, such as how it watermarked scripts or how the photocopier or coffee maker operated.

2. Is the training for the benefit of the trainees or students?

Undoubtedly, Glatt and Footman received some benefits from their internships, such as resume listings, job references, and an understanding of how a production office works. But those benefits were incidental to working in the office like any other employee and were not the result of internships intentionally structured to benefit them…. On the other hand, Searchlight received the benefits of their unpaid work, which otherwise would have required paid employees

3. Do the trainees or students work under their close observation of regular employees without displacing them?

Glatt and Footman performed routine tasks that would otherwise have been performed by regular employees…. His supervisor stated that “[i]f Mr. Glatt had not performed this work, another member of my staff would have been required to work longer hours to perform it, or we would have needed a paid production assistant or another intern to do it.”

4. Does the employer derive no immediate advantage from the activities of the trainees or students, and on occasion are the employer’s operations actually impeded?

Searchlight does not dispute that it obtained an immediate advantage from Glatt and Footman's work. They performed tasks that would have required paid employees. There is no evidence they ever impeded work at their internships. Menial as it was, their work was essential. The fact they were beginners is irrelevant

5. Are the trainees or students not necessarily entitled to a job at the conclusion of the training period?

There is no evidence Glatt or Footman were entitled to jobs at the end of their internships or thought they would be.

6. Do the employer and the trainees or students understand that the trainees or students are not entitled to wages for the time spent in training?

Glatt and Footman understood they would not be paid. But this factor adds little, because the FLSA does not allow employees to waive their entitlement to wages.

Based on the balancing of these six factors, the Court concluded the the employees “were classified improperly as unpaid interns and are ‘employees’ covered by the FLSA.”

This issue is not going away. According to Friday’s New York Times, last week two former interns sued Condé Nast for unpaid wages. I think it’s fair to say that the sun in quickly setting on the use of unpaid internships in corporate America.

In light of these cases, it bears repeating the conclusion I reached in The Employer Bill of Rights (p. 159):

Employers that use unpaid interns should pay careful attention to this issue. It is far better to scrutinize interns under the DOL’s six factors before the agency, or a group of plaintiffs, swoop in and do it for you. It is even better to formalize the relationship in a written internship agreement that formally spells out how each of these six questions is answered in your favor. Or maybe it is best simply to assume that except in rare cases, there is no such animal as an “unpaid intern,” and you should simply accept the fact that if you are going to label entry-level employees as interns, you need to pay them for their services.

WIRTW #278 (the “carnival barker” edition)

This coming Wednesday, I’m hosting the Employment Law Blog Carnival. For the uninitiated, a blog carnival a collection of submitted links arranged around a particular theme. To get a better idea of what the Employment Law Blog Carnival is all about, you can read my prior two hosting stints:

• The Kindergarten Edition
• The 007 Edition

If you have a link you’d like me to share in this month’s Carnival, please email it to me no later than Monday.

Because of my Carnival-hosting duties, WIRTW will not run next Friday, and will return on June 28.

Here’s the rest of what I read this week:

Discrimination

• Moms rule in lactation, pregnancy, and health insurance challenges — from Robin Shea’s Employment and Labor Insider
• Just Give Me a Reason: Court Clarifies Burden-Shifting Standards — from Dan Schwartz’s Connecticut Employment Law Blog 
• GINA Lawsuits are Becoming More Common — from Mike Haberman’s Omega HR Solutions
• Retaliation Gets A Broader View — from Trade Secret / Noncompete Blog
• Can a Hostile Environment Claim Arise From Conduct Between Employees Outside the Workplace? — from Minnesota Employer
• Failure to Provide Additional Leave as ADA Accommodation Could Prove Costly to Employers — from Jeff Nowak’s FMLA Insights
• LGBT Workers Face Rampant Discrimination, Higher Taxes and Receive Fewer Workplace Benefits — from Workplace Fairness
• Should I Caution My Gay Employee About His Picnic PDAs? — from Evil Skippy at Work
• EEOC steps up enforcement of genetic information non-discrimination — from EmployerLINC

Social Media & Workplace Technology

• Banned at Work: Employers Blacklist Apps From Facebook, Google — from Bloomberg Businessweek
• Stop Insider Tweeting!—Feds Eye Social Media for Securities Shenanigans — from Socially Aware Blog
• Using Instagram Can Get You Fired — from Business Insider
• Through the Lens of a Taco Bell Kid Licking Taco Shells — from The HR Capitalist, Kris Dunn
• In-House Email Policy: What Makes a Good One? — from In House Blog
• Email Security in the Modern Workplace — from i-Sight Investigation Software Blog
• Why Your CEO Is a Security Risk — from Harvard Business Review
• I’ll BYOD if You BYOB — from YourHRGuy
• Let's Talk About BYOD Privacy In the Workplace, Stat — from Workplace Diva
• Is Social Media the Biggest Workplace Distraction? — from Social Media Today

HR & Employee Relations

• Enforceability of a Noncompete Agreement will Often Depend Upon Context — from Michigan Employment Law Advisor
• Few Employees Quit Jobs Over Mandatory Flu Shots — from EmployerBrief
• Stealing Trade Secrets? Go Directly to Jail / Do Not Pass Go / Do Not Collect $200* — from netWORKed Lawyers
• Lesson From Zynga: Perks Are Not More Important Than a Business Plan — from Evil HR Lady, Suzanne Lucas
• SCOTUS Defers to Arbitrator on Class Arbitration — from Phil Miles’s Lawffice Space
• Can I trust HR to protect my legal rights? — from The Evil HR Lady, Suzanne Lucas, at CBS Money Watch

Wage & Hour

• Employers beware misclassifying employees as unpaid interns — from Employment Law Bits
• Big win in fight against unpaid internships — from Workplace Prof Blog
• Unpaid interns win lawsuit against Fox Searchlight Pictures — from Minding the Workplace
• Unpaid Internships may be more costly than you may think — from Employment Matters Blog
• Pennsylvania District Court Denies Certification Of Off-The-Clock Case — from Employment Class Action Blog
• No No No ... Not In Our Court. Sixth Circuit Uses Dukes v. Wal-Mart To Block Class Certification and Extends It To Bar Hiring Discrimination Class Claims — from Employer Law Report
• Why Dads Don't Take Paternity Leave — from the Wall Street Journal

Labor Relations

• Non Union Employers Beware: OSHA Has Just Become A Union Organizer — from The Labor and Employment Law Blog
• Does firing a law firm associate for discussing wages violate federal labor law? — from Eric Meyer’s The Employer Handbook Blog
• Attacked on all sides, NLRB is in “unprecedented” place — from Thomson Reuter’s News and Insight
• NLRB Going Rogue — from California Employment Law
• NLRB Finds Discussions With Employees of Another Employer Can Constitute Protected Activity — from Pennsylvania Labor and Employment Blog
• NLRB’s Notice Posting Rule (Still) On Hold — from BLEG Blog

photo credit: burakiewicz via photopin cc

Cancer as a protected disability

The Am Law Daily reports that the former CFO of Proskauer Rose is claiming that the international law firm violated the Americans with Disabilities Act by terminating her after a three-month leave of absence for breast cancer. Earlier this month, the EEOC published an updated Q&A discussing the treatment of cancer in the workplace under the ADA. As the EEOC notes, there is little doubt that the ADA protects cancer as a disability:

As a result of changes made by the ADAAA, people who currently have cancer, or have cancer that is in remission, should easily be found to have a disability within the meaning of the first part of the ADA’s definition of disability because they are substantially limited in the major life activity of normal cell growth or would be so limited if cancer currently in remission was to recur. Similarly, individuals with a history of cancer will be covered under the second part of the definition of disability because they will have a record of an impairment that substantially limited a major life activity in the past. Finally, an individual is covered under the third (“regarded as”) prong of the definition of disability if an employer takes a prohibited action (for example, refuses to hire or terminates the individual) because of cancer or because the employer believes the individual has cancer.

The newly published Q&A answers the following four questions:

• When can an employer ask an applicant or employee questions about his cancer and how should it treat voluntary disclosures? The ADA prohibits employers from requesting or compiling any medical information during the hiring process. Once a conditional job offer is made, an employer can require a medical examination, as long is it does the same for all employees in the same job classification. An employer may also require an employee returning from a medical leave of absence to certify his or her ability to adequately and safely perform the essential functions of the job. As with any medical information, the ADA obligates an employer to keep information about an employee’s cancer confidential.
• What types of reasonable accommodations may employees with cancer need? Some exemplar accommodations include time off for doctors’ appointments, periodic breaks during the workday to rest or take medications, modified work schedules or shift changes, permission to telecommute, permission to use a work telephone to contact doctors, and redistribution of marginal and non-essential work tasks to other employees.
• How should an employer handle safety concerns about applicants and employees with cancer? An employer may only exclude an individual with cancer from a job for safety reasons when the individual poses a “direct threat.” A direct threat is an objective determination of a “significant risk of substantial harm to the individual or others that cannot be eliminated or reduced through reasonable accommodation.”
• How can an employer ensure that no employee is harassed because of cancer or any other disability? The ADA prohibits disability-related harassment. The best means to prevent or eliminate this misconduct from the workplace is via written policies or handbook provisions, coupled with education and training. Also, employers should take seriously all complaints of harassment of any kind (including harassment related to an employee’s disability), investigate all complaints, and take prompt remedial action to ensure that it stops and does not repeat.

The EEOC’s Q&A on cancer is chock-full of useful information, including practical examples of how to handle many situations that could arise. Of course, if you have any doubt at all about how to handle an employee with cancer or a history of cancer, consult your employment counsel to ensure that you do not make a costly mistake.

This post originally appeared on The Legal Workplace Blog.

Can you ban foreign languages in the workplace? English-only policies.

USA Today reports that Whole Foods has suspended two employees for allegedly speaking Spanish to each other on the job. For its part, Whole Foods denies the claim, and insists that it suspended the employees for “rude and disrespectful behavior.”

Regardless of who is correct, in our increasingly multi-cultural country, this story begs the questions of how, when, and why is a company permitted to limit languages spoken in the workplace.

I initially addressed this issue almost six(!) years ago in a post entitled, English-only workplaces spark lawsuits. In that post, I made the point that English-only rules are legal as long as the employer can show a business need for the policy (for example, inter-employee communication or workplace safety). An overly restrictive rule (for example, prohibiting non-English-speaking in non-work areas such as the lunchroom), however, might violate Title VII’s prohibition against national origin discrimination. You can read my original post to learn the ins and outs of this interesting and seldom litigated issue.

According to the USA Today story, Whole Foods’s “policy states that all English speaking team members must speak English to customers and other team members while on the clock” and that “team members are free to speak any language they would like during their breaks, meal periods, and before and after work.” To me, that policy is perfectly legal under Title VII, and should raise no issues for the employer, even if it disciplined these two employees for speaking Spanish on the shop floor.

What do you do when an employee refuses to complain?

Do you know what to do if you believe an employee was sexually harassed, but refuses to provide any details or other information? Do you have an obligation to investigate as if the employee had lodged a formal, detailed complaint? Crockett v. Mission Hospital (4th Cir. 5/30/13) provides some insight.

Stephanie Crockett worked at Mission Hospital as a radiologic technologist. Her supervisor (albeit one without the authority to hire or fire) was Harry Kemp. Following several disciplinary notices and a final written warning, Crockett asked if she could speak to Kemp. He agreed to a private conversation. Kemp insisted they meet in an unused office, expressing that he thought his office had been bugged. Then, behind closed doors, Kemp requested that Crockett remove her clothes before they spoke to prove that she wasn’t wearing a wire. Crockett complied, albeit begrudgingly and through tears. Following their discussion, Kemp requested that she not tell anyone what happened.

While Crockett on a leave of absence, Kemp went to HR and accused Crockett of “flashing” him in an attempt to persuade him not to report new disciplinary violations. Crockett denied to HR that she had flashed Kemp, and further told them that he had done something “horrific” to her and was trying to cover it up. She refused to elaborate, but later told HR that the incident involved sexual advances by Kemp. She again, however, refused to provide any details. HR then interviewed at least 5 co-workers, each of whom denied seeing or hearing anything inappropriate. The hospital later terminated Crockett for admitting to having recorded conversation between Kemp and her, and conversations about patient information, in violation of hospital policy.

The appellate court affirmed the district court’s dismissal of Crockett’s sexual harassment claim, concluding that the hospital “exercised reasonable care to prevent and correct promptly any sexually harassing behavior;” and that Crockett “unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise.”

McCarthy, Jones, and Ensley immediately began an intensive investigation on February 25, 2010, after Crockett accused Kemp of “horrific” behavior toward her, despite the fact that she refused to provide any further details or information. They interviewed numerous employees and supervisors in Crockett’s department, but were handicapped by Crockett’s refusal to cooperate and give Mission some clue as to her complaint. Since Crockett had refused to provide any information, their attempts to investigate her claim were unsuccessful….

The uncontradicted evidence establishes that Mission met with Crockett on numerous occasions in an effort to promptly correct the situation, counseled her in the procedure for filing a formal complaint, and provided her with a copy of the sexual harassment policy, despite Crockett’s unwillingness to cooperate with the investigation.

Harassment is harassment, regardless of whether the victim complains or management learns of the harassment allegations another way. A company’s obligations to investigate, and, if necessary, take corrective action does not change merely because the victim won’t cooperate.

For more information on how to appropriately and effectively respond to a harassment complaint, I suggest reading How NOT to respond to a harassment complaint. I also cover the topic in-depth in Chapter 6 of The Employer Bill of Rights.

NLRB judge strikes down Red Cross employee confidentiality policy

A couple of months ago, I suggested that there was hope for a friendship between the NLRB and me, following the Board’s pronouncement that most at-will employment disclaimers would not violate the NLRA’s protected concerted activity laws. I reached this conclusion because of the Board’s statement concerning reading employment policies “in context” to determine whether potentially violative phrases in employment policies can conceivably be read to restrict Section 7 activity.

If the Board is supposed to read employment policies “in context,” then can you please explain the recent ruling by an NLRB Administrative Law Judge in American Red Cross Blood Services, Western Lake Erie Region (6/5/13) [pdf]?

In American Red Cross, the ALJ examined the following confidentiality policy:

I acknowledge that I may, in the course of my employment with Red Cross (“Employment”), have access to or create (alone or with others) confidential and/or proprietary information and intellectual property that is of value to Red Cross. I understand that this makes my position one of trust and confidence. I understand Red Cross’ need to limit disclosure and use of confidential and/or proprietary information and intellectual property…. Therefore, I agree to the following:

Confidential information shall include but not be limited to: … information relating to Red Cross’ … personnel … matters.

The ALJ held that this policy violates Section 8(a)(1) of the NLRA by reasonably chilling employees in the exercise of their section 7 rights:

By defining confidential information as including information regarding “personnel” and “employees” the [policy] would be reasonably understood by employees to prohibit the disclosure of information including wages and terms of conditions of employment to other employees or to nonemployees, such as union representatives. It is, of course, clearly established that employees have a Section 7 right to discuss wages and  terms and conditions of employment among themselves and with individuals outside of their employer.… 

The specific employee handbook provision that prohibits the release of confidential employee information without authorization is clearly facially overbroad, … in that such a rule would reasonably be understood by employees to prohibit the disclosure of information regarding wages and terms and conditions of employment to other employees or to union representatives.

I do not agree that employees would reasonably understand that a policy that covers “personnel” matters would prohibit employees from discussing matters of compensations and wages. Indeed, there were no allegations in the case that the Red Cross acted against any employee under this policy. Instead, the ALJ was reviewing the policy in the abstract.

The ALJ also rejected the employer’s argument that a “savings clause” in its handbook rendered an otherwise unlawful policy lawful:

“[T]his Agreement does not deny any rights provided under the National Labor Relations Act to engage in concerted activity, including but not limited to collective bargaining.” As the Charging Party correctly noted in its brief, under Board law, such a disclaimer does not make lawful the content of a provision that unlawfully prohibits Section 7 activity.… The “savings clause” noted above arguably would cancel the unlawfully broad language, but only if employees are knowledgeable enough to know that the Act permits employees to discuss terms and conditions of employment with each other and individuals outside of their employer.

I have two takeaways for employers from this decision.

1. The NLRB continues to scrutinize facially neutral employment policies for violations of employees section 7 rights to engage in protected concerted activity, even in cases in which there is no allegation of any adverse action against any employee under an alleged unlawful policy.
2. Savings clauses and disclaimers might save a policy that the NLRB views as overly broad, but likely only if specifically drafted. Board and non-specific savings clauses will not save the day. Instead, employers should draft savings clauses such that employees can reasonably understand their specific rights that are protected.

WIRTW #277 (the “come on down” edition)

Some of my fondest memories as a child were watching The Price is Right with my Grandmom Annie on the TV in her basement. We’d watch Family Feud, The Price Is Right, and The Match Game, and then she’d make me a grilled cheese sandwich for lunch. Heaven on earth to a 4-year-old.

Harkening back to those childhood days, I always wanted to see The Price is Right live. I fulfilled that dream during the spring break of my 1st year of law school. The experience was surreal. We sat next to a guy wearing a pink, bespangled, “I ♥ Bob Barker” sweatshirt. It was his 250th taping, and he knew the names of all of Bob Barker’s cats and dogs (restraining order not included). We also saw one of the curtains break down as they were about to reveal the prize for one of the pricing games, followed by Bob Barker telling the confused contestant, “When we start rolling tape, I will have already said, ‘And you can win this!’ The first thing the camera will see is your reaction. So, whatever piece of s**t is behind that curtain, you better react like it is the best thing you’ve ever seen.”

I tell this story because earlier this week, The Huffington Post reported that a North Carolina postal worker pleaded guilty to workers’ compensation fraud. The employee had lied about her inability to stand, sit, kneel, squat, climb, bend, reach, grasp, or lift. The smoking gun? An appearance on TPIR on which she spun the big wheel, twice.

Here’s the rest of what I read this week:

Discrimination

• Is Sexual Harassment Permissible If It Is Directed At Both Male and Female Employees? — from Minnesota Employer
• Sexually Harassing Comments - Is There Any Case Where A Single Usage Created A Hostile Work Environment? — from Employment Discrimination Report
• Employee alleges he got the “Office Space,” claims age discrimination — from Eric Meyer’s Employer Handbook Blog
• EEOC guidance may impact hiring practices of regulated industries — from EmployerLINC
• Case of fired Catholic schoolteacher likely isn’t over — from Crain’s Cleveland Business Work Force Blog
• “Fired for being gay” article in NY Times — from Warren & Associates Blog
• Unpaid Worker Not “Employee” Under Title VII, 5th Circuit Decides — from Joe’s HR and Benefits Blog
• We Need the Young to Help Eliminate Age Discrimination in the Workplace — from TLNT
• Are these medical questions illegal, or not? Test your knowledge! — from Robin Shea’s Employment & Labor Insider

Social Media & Workplace Technology

• Can You Control Your Employees’ LinkedIn Profiles? — from Evil HR Lady, Suzanne Lucas
• Think Before You Tweet: It’s All Fun and Games Until Someone Gets Fired — from PayScale
• Newsbreak: What You Post on Facebook Can Be Used Against You — from Lawyers.com
• Social Media Password Protection and Privacy — The Patchwork of State Laws and How It Affects Employers — from Workplace Privacy Counsel
• Undeliverable: E-mail blocks retaliation claim — from Technology for HR

HR & Employee Relations

• The Biggest Interview Mistakes HR Experts See — from Lifehacker
• Secrets of Super Negotiators – Don’t Use Round Numbers — from Negotiation Law Blog
• Backing a new employee in restrictive covenant proceedings can be costly — from Employment Law Worldview
• What to Do When an Employee Cries at Work — from Harvard Business Review
• Employers in the Crossfire — from Jonathan Segal
• Managing millennials: Gen Y workforce seeks information, feedback, work/life balance — from Knoxville News Sentinel
• What Will Your Workplace Look Like in 2023? — from Wired’s Innovation Insights
• The Impact of Breadwinner Moms on HR — from Mike Haberman’s Omega HR Solutions
• Captain America Comes to NEO: 5 Ways to Help Employees Battle the Traffic — from ERC Insights Blog
• Preparing to Conduct HR Investigation Interviews — from i-Sight Investigation Software Blog

Wage & Hour

• How cutting employee hours due to health reform may infringe federal law — from Employee Benefit News
• Massachusetts Federal Court Provides Important Reminders for Challenging FLSA Collective Actions — from Wage & Hour Counsel
• FLSA Collective Action Waivers in Arbitration Agreements Okay’d — from The Wage and Hour Litigation Blog
• Wage & Hour Surprises and Risks — from Work Place Coach Blog News
• Update: Sears v. Butler — from Walter Olson’s Overlawyered
• Your Summer Intern Is Here. Now What? — from Harvard Business Review
• Challenges (and Solutions) to Unlimited Vacation Policy — from Blogging4Jobs

Labor Relations

• Here’s Your Annual Post On Everything That’s Wrong With Unions — from The HR Capitalist, Kris Dunn
• NLRB and Social Media — from Wyatt Employment Law Report