Unpaid and Unprotected

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GEORGETOWN UNIVERSITY LAW CENTER

Unpaid and Unprotected

Unpaid Interns Are Denied NeededProtection from Workplace Discrimination

and Harassment Under Title VII

Matthew Lashof-Sullivan*

5/12/2015

*J.D., Georgetown University Law Center, 2016. I would like to thank my advisor, Gary

Peller, for giving me the time and space needed to work on this project. His

recommendations and discussions about animating principles were inspiring and

invaluable. I would also like to thank Meg Lashof-Sullivan for her patient support

throughout the writing process.



I. Introduction

In this note I will discuss how courts have dismissed discrimination cases

brought by interns because they determined that interns are not “employees” within

the meaning of Title VII of the Civil Rights Act. First, I will draw the connection

between wage laws and workplace discrimination laws and argue that interns are

sorely in need of both. Then, I will lay out the traditional exemption from wage laws

for trainees that the Supreme Court created in the case Walling v. Portland

Terminal and argue most interns don’t meet the criteria. I will attempt to show that

the Supreme Court misunderstood the benefit trainees seek, and this has led to

courts failure to protect interns under the rubric of Title VII. I will then show that,

in other contexts, courts and agencies have used a more flexible definition of

employee which would cover trainees. Finally, I propose a solution to the question of

what remedies interns should be entitled to under Title VII.

This note will discuss the phenomenon of the modern unpaid internship, how

interns are treated, and the (lack of) labor protections for unpaid interns. For

convenience, I will use the term “intern” to refer only to unpaid interns. Some paid

employees are also called “interns” by their employers, but this has no legal

significance since employee status traditionally turns on payment of compensation.

I will also refer to the person or organization who hosts an intern as the “employer,”

even though as courts have interpreted the law interns are not considered

employees.



Though this note criticizes the practice of the modern unpaid internship, I

participated in one during the very same semester that I am writing this note. I

recognize the irony in this; I bring it up to make a few points. First, I do not claim

that internships provide no benefit to the intern. Clearly, they do provide some

benefit otherwise people (including myself) would not participate in them. Second,

even though I view the systematic practice of employing interns to do substantive

work for no pay to be unethical, I do not believe that a student or young person is

doing anything wrong by trying to do as well for herself within the existing system

as she can. Third, I would like to show how coercive I believe the internship system

to be. Even though I believe the system exploits interns for free labor, I have

determined that submitting to this system is better for me than other available

alternatives. Finally, I would like to recognize that I, as a white male, am privileged

not to need to worry about vulnerability to the discrimination that is the subject of

this note. I am also fortunate to live and work in Washington, D.C., which is one of

the few jurisdictions that has recognized interns are at least as vulnerable to

employment discrimination as employees, and has covered interns under local anti-

discrimination law.1

1 D.C. Code § 2-1401.02(9) (West, Westlaw through Feb. 18, 2015) (“‘Employee’ . . . shall include an unpaid

intern.”)



II. Wage and hour laws and anti-discrimination laws protect workers

from the power of their employers.

Scholars and commentators have long recognized that employers have far

greater power than employees in the employer/employee relationship.2 This is

derived from all people’s need for some income to purchase basic food, clothing, and

shelter, and the fact that a typical worker derives almost 100% of her income from

her employer. By contrast, employers’ profits typically don’t drop to zero with the

loss of any one employee. Thus, the cost of quitting to an employee is her entire

income, while the cost to an employer of terminating an employee is only a portion

of total income.

Because of this disparity in power, employers are largely able to set the terms

of employment.3 One would expect that competition among employers for talent

would tend to mitigate this power, but this effect is limited because few employees

are irreplaceable in their employers’ businesses, while employees are comparatively

less mobile.4 Terms typically set by employers include hours of work, wage levels,

job qualifications, and working conditions. Some employers even attempt to

regulate their employee’s non-work-related behavior.5 These exercises of power are

not the subject of this note, but serve to illustrate the level of control that employers

can often exercise over their employees.

2 See generally, e.g., Lawrence Blades, Employment At Will Vs. Individual Freedom: On Limiting the Abusive

Exercise of Employer Power , 67 COLUM. L. R EV. 1404 (1967).3 See id. at 1405 – 06.4 See id. at 1412 – 13.5 Id. at 1407. See also Herx v. Diocese of Fort Wayne-South Bend, Inc., 772 F.3d 1085, 1086 – 87 (7th Cir. 2014)

(English teacher at Catholic school fired for using fertility treatments); David Kravets, Worker Fired For Disabling

GPS App That Tracked Her 24 Hours a Day, ARS TECHNICA (May 11, 2015), http://arstechnica.com/tech-

policy/2015/05/worker-fired-for-disabling-gps-app-that-tracked-her-24-hours-a-day.

http://arstechnica.com/tech-policy/2015/05/worker-fired-for-disabling-gps-app-that-tracked-her-24-hours-a-day








One of the most common qualifications that employers require is work

experience. So many jobs require experience that a common refrain among job

seekers is, “How am I supposed to gain experience if I’m constantly turned down for

not having any?”6 One common piece of advice is to intern to gain experience.7

Society has widely accepted this as normal, but the dynamic actually shows the

massive amount of power that employers are allowed to maintain over young

applicants. The proposition that someone can be expected to work for extended

periods of time for no pay just so they can have a chance at possibly securing paid

employment at some time in the future is staggering.

Given that employers have so much power that job applicants can even be

induced to work for free, government has intervened to prevent some of the worst

abuses of employer power by enacting various workplace laws.8 The two types of

laws that this note is concerned with are wage and hour laws and anti-

discrimination laws. Wage and hour laws like the Fair Labor Standards Act (FLSA)

limit employers’ power to set wages too low or to require covered employees to work

long hours.9 By limiting employer’s power in this way, FLSA attempts to ensure

that workers’ wages never fall below its prescribed minimum level, giving them the

6 See Jacquelyn Smith, When An Employer Requires Experience And You Have None, FORBES (May 9, 2012),

http://www.forbes.com/sites/jacquelynsmith/2012/05/09/when-an-employer-requires-experience-and-you-have-

none. 7

See id at 2.8 Although, at the same time that the government enacts laws to restrain the power of employers, it itself also solicits

even highly educated people to work for no pay in positions lasting up to an entire year. See, e.g. Uncompensated

Special Assistant United States Attorney, U.S. DEPARTMENT OF JUSTICE (Jan. 23, 2015),

http://www.justice.gov/legal-careers/job/uncompensated-special-assistant-united-states-attorney-2 (unpaid position

requiring J.D., at least one year of post-graduation experience, a one year “service commitment”, and an agreement

not to do any compensated outside practice of law).9 29 U.S.C. § 201 et seq. (West, Westlaw through 2015). FLSA has this effect where it applies, but it contains many

exemptions such as for certain agricultural workers, fishermen, and even more specific categories like criminal

investigators and switchboard operators. 29 U.S.C. § 213 (West, Westlaw through 2015).

http://www.forbes.com/sites/jacquelynsmith/2012/05/09/when-an-employer-requires-experience-and-you-have-none



http://www.justice.gov/legal-careers/job/uncompensated-special-assistant-united-states-attorney-2







ability to support themselves through work. In an internship, the employer has set

wages all the way down to zero. Court decisions have interpreted the law to allow

this by differentiating between trainees (not covered by FLSA) and employees.10 By

allowing interns not to be covered by FLSA, the courts have undermined the law’s

purpose of limiting employer’s wage-setting power. This also tends to reduce market

wages to the extent that interns are performing work that would otherwise be done

by paid employees.11

Anti-discrimination laws limit employers’ power to set working conditions in

two ways. First, they prevent employers from setting race or gender as a

prerequisite of employment or promotion. Second, they prevent employers from

requiring, as a condition of employment, that the employee put up with certain

kinds of harassment. This protection can be very important in an internship.

Without legal backing, interns are not in a position to use their own power to stop

harassment — if they were in a position to make demands, they would probably be

paid. Also, the value that the intern receives from an internship depends entirely on

receiving training and recommendations from her supervisors. If a paid employee

leaves a job due to workplace harassment, then at least she leaves with her wages

in her pocket. If an intern leaves an internship due to harassment, she leaves with

nothing at all.

The very fact that interns work for free demonstrates the power that

employers have over them. And yet, the fact they are unpaid has been interpreted

10 See infra Part III.11 See Jessica L. Curiale, America's New Glass Ceiling: Unpaid Internships, the Fair Labor Standards Act, and the

Urgent Need for Change, 61 Hastings L.J. 1531, 1537 (2009-2010).



by courts as exempting employers from following the very laws that are designed to

reign in employer power. The remainder of this note discusses how courts have

reached this conclusion, the effects this has on interns, and possible judicial and

legislative solutions to this problem.

III. Are interns trainees? The Supreme Court misunderstood the nature

of the intern/employer relationship.

The Fair Labor Standards Act unhelpfully defines an employee as “any

individual employed by an employer.”12 However, the act then clarifies that

“employ” includes to “suffer or permit to work”.13 This definition is so expansive it

would seem to cover not only interns and trainees, but also volunteers. However, in

Walling v. Portland Terminal Co., the Supreme Court interpreted FLSA not to

include trainees who work only for their own benefit.14 The court analogized the

company’s training program to a school, reasoning that of course the trainees, if

they took similar courses in a vocational school unconnected with the railroad,

would not be entitled to wages.15 The Court cites several facts to support this

proposition: (1) the training does not necessarily lead to a job; (2) the trainee does

not displace any actual paid workers; (3) the railroad’s operations are not expedited

or advanced.16 These criteria led the Court to conclude that the entire program was

12 29 U.S.C. § 203(e) (West, Westlaw through 2015).13 29 U.S.C. § 203(g) (West, Westlaw through 2015). For a discussion of the context and original meaning of “suffer

or permit to work”, see Bruce Goldstein et al., Enforcing Fair Labor Standards In The Modern American

Sweatshop: Rediscovering The Statutory Definition Of Employment , 46 UCLA L. Rev. 983 (1998 – 1999).14 330 U.S. 148, 152 (1947). The Court held that the act “obviously” doesn’t cover persons who work for their own

advantage on the premises of another. Otherwise, all students would be employees of the schools they attended.15 Id. at 152-153.16 Id. at 149 – 150.



for the immediate benefit of the trainees, rather than the railroad.17 This is true in

the sense that the railroad was not using the trainees as free labor. However, the

Court misunderstood the nature of the benefit that the trainee received.

The court concludes that the trainees must not be considered employees on

the basis of a comparison with vocational schools.18 However, this comparison elides

a fundamental difference between the vocational student and the railroad trainee.

The student at a vocational school is there to learn transferrable skills in order to

enter the profession generally. For the trainee of the railroad, while he does learn

transferrable skills, those skills are not the reason for his presence in the course.

While the Court accepted the findings that trainees knew they were not necessarily

entitled to a job at the end of the training course, it was also true that no employee

could be hired who had not completed the course.19

In fact, the “training course” occurred after a traditional job application was

already complete. Before even being eligible for training the trainee had to file a

formal application and take a physical examination and eye test.20 Additionally, the

length of this training program was not fixed. It lasted up to two weeks, but the

trainee could show himself to be competent to serve without supervision prior to

that, and in fact the training lasted an average of seven or eight days.21 As the

dissent in the 1st Circuit pointed out, the trainees were required to report to work

17 Id. 18 Id. at 153.19 Id. at 150.20 Walling v. Portland Terminal Co., 155 F.2d 215, 216 (1st Cir. 1946).21 Id. at 217.



full time at specified hours and were subject to all the hazards and exertions of

ordinary railroad brakeman work22, which is apparently quite dangerous.23 During

this time, they were subject to constant evaluation by the foreman to see if they are

ready to be put “on the board” as eligible for employment.

Thus, in the process of reaching the result, the Supreme Court

mischaracterized the relationship of the trainee to the employer. The Court

described the program as being like a vocational school, but really it was more like

an extended job application and interview.24 This difference matters for modern-day

interns, because interns (as non-employees) have been held not to be protected by

Title VII of the Civil Rights Act against workplace discrimination and harassment.

Cases reaching this result have relied on this fundamentally educational

understanding of the relationship between the intern and the employer to hold that

interns are not vulnerable to the same extent as employees because they are not

bound by economic necessity, and are always free to leave if their training is

unsatisfactory.25 Since internships often function more like extended auditions than

like the vocational education the court analogized to in Portland Terminal, the

intern is actually more vulnerable to discrimination and harassment because she is

22 Id. at 220 (Magruder, J., dissenting).23 See Carl Landeck & Roger Thorne, The Pennsylvania Railroad During World War II, Tredyffrin Easttown

Historical Society 45 (2005) http://www.tehistory.org/hqda/pdf/v42/Volume42_N2_035.pdf (“The job of the freight

brakeman was one of the most dangerous jobs on the railroad. . . .” ).24 Walling v. Portland Terminal Co., 330 U.S. 148, 153 (1947). (“The Fair Labor Standards Act was not intended to

penalize railroads for providing, free of charge, the same kind of instruction [as one would receive at a vocational

school].”). 25 See infra Part VI.

http://www.tehistory.org/hqda/pdf/v42/Volume42_N2_035.pdf






acutely aware that she is constantly being evaluated by her supervisors as she

seeks the job offer or glowing letter of recommendation.

IV.

Interns are near-universally excluded from the protection of Title

VII by courts relying on Portland Terminal’s misunderstanding of the

intern’s benefits.

There have been a number of cases in which interns have sued for

employment discrimination. They have almost universally lost because courts have

held that they are not “employees” for the purposes of Title VII. For example, in

Tadros v. Coleman,26 a doctor accepted an unpaid position at Cornell Medical

College. When he later filed a Title VII national origin discrimination charge for

failure to hire him as a full-time faculty, his case was dismissed without any

determination of whether he was discriminated against or not because he was not

an “employee”.

In Haavistola v. Community Fire Co. of Rising Sun,27 a volunteer firefighter

sued for sex discrimination after she was allegedly retaliated against for filing a

sexual assault claim against a co-worker. The Fourth Circuit remanded the case,

not so that the merits of whether the plaintiff was retaliated against could be

litigated, but to determine whether the benefits28 she received were enough to

qualify as compensation.

26 898 F.2d 10 (2d Cir. 1990).27 6 F.3d 211 (4th Cir. 1993).28 The volunteer firefighters, while not receiving salary or pension benefits, were eligible for workers compensation,

group life insurance, and disability insurance due to the hazardous nature of firefighting. Haavistola, 812 F. Supp. at

1387.



In Smith v. Berks Community Television,29 an intern sued a TV station for

employment discrimination. The court there held that “[u]npaid volunteers are not

susceptible to the discriminatory practices which [Title VII] was designed to

eliminate.”30 On the contrary, interns (often described as volunteers) are in many

ways more susceptible to these discriminatory practices, not less. The facts of the

case Lippold v. Duggal Color Projects, Inc.31 demonstrate this susceptibility.

In Lippold, an intern sued a photography studio for sex discrimination,

alleging both hostile work environment and quid pro quo. Jennifer Lippold alleged

that her supervisor touched her breasts and buttocks repeatedly.32 She also claimed

that he refused to sign her timesheets because she rebuffed his advances. Lippold

was placed in the internship at the studio as part of a City College of New York

vocational training program, where she was paid a stipend by the college while

working in an outside placement. In order to complete her education, she needed to

“satisfactorily complete” her placement.33

The requirement of satisfactory completion gave Lippold’s supervisors even

more power over her than they would have had over an employee. While an

ordinary employee’s livelihood is dependent on her employer, she retains the ability

to quit without penalty. For Lippold, her only option was to contact the coordinator

of her vocational program, notify him of the harassment, and request another

29 657 F.Supp. 794 (E.D. Pa. 1987).30 Id. at 795.31 1998 WL 13854, No. 96 CIV.5869(JSM) (S.D.N.Y. Jan 15, 1998).32 Id. at *1.33 Id.



placement because if she quit she would receive a failing grade. Lippold in fact did

do this.34 The instructor of the course associated with her placement did not take

any action, and instead told her to “learn to deal with” it.35 Despite Duggal Color

having even greater power over Lippold than it would over an ordinary employee,

and despite the fact that she actually was paid, the court denied her claim against

Duggal.

One suggestion that is sometimes floated to resolve some of the problems of

internships is this sort of training grant program, where the intern works at an

organization or company and is paid by her school or the government.36 This

relieves the company of the burden of paying novice employees while ensuring that

the intern is compensated for her labor. It has also been suggested that this

alleviates the gap in Title VII that interns otherwise fall into. In this case, such a

program was still insufficient to protect Lippold against workplace harassment and

discrimination. The court required two showings before Lippold could recover from

Duggal Color: (1) the putative employee must be paid; and (2) the defendant must

be the “employer”. Duggal Color had the authority to control Lippold’s work

schedule. She worked in their facilities, used their equipment, and had duties

similar to their regular employees. Nonetheless, the court found that since the

money was not coming from Duggal, they couldn’t be the “employer”. The court’s

34 Complaint at 42, Lippold v. Duggal Color Projects, Inc., No. 96 CIV 5869 (S.D.N.Y. Jan. 15, 1998), available at

Westlaw: 1996 WL 34306942.35 Id. at 55.36 Bonamici Unveils Opportunities for Success Act - New Bill to Help Low-Income Students Gain Access to

Internships, U.S. R EPRESENTATIVE SUSANNE BONAMICI (July 12, 2013), http://bonamici.house.gov/press-

release/bonamici-unveils-opportunities-success-act-new-bill-help-low-income-students-gain.

http://bonamici.house.gov/press-release/bonamici-unveils-opportunities-success-act-new-bill-help-low-income-students-gain








rigid determination of employer status is not required by case law, and in other

contexts would actually be erroneous. Compare this courts analysis to the definition

of “employ” under the Fair Labor Standards Act—to “suffer or permit to work”. In

order to receive the placement with Duggal, Lippold first needed to pass an

interview with the company. They accepted her, and permitted her to work in their

facilities. Unlike in Portland Terminal, there is no contention that Duggal Color did

not benefit from Lippold’s work or that Lippold did not displace a paid employee.

V. Less formalist definitions of employee are available and are used in

other contexts.

In several cases, entities have been found to be “joint employers” even though

that entity was not directly paying the employee. One case involved McDonald’s

franchises; there the NLRB found that the McDonald’s corporation was a “joint

employer” with the franchisee.37 The NLRB determined this because the

McDonald’s corporation “engages in sufficient control over its franchisees'

operations, beyond protection of the brand,” and engaged in a nationwide response

to franchise employees’ organizing activities.38 Courts have also formulated tests for

joint employer status in the FLSA context. For example, in Zheng v. Liberty Apparel

Co. Inc.,39 the Second Circuit held that an entity could be a “joint employer” for

37 National Labor Relations Board, McDonald’s Fact Sheet (last visited Mar. 8, 2015), available at

http://www.nlrb.gov/news-outreach/fact-sheets/mcdonalds-fact-sheet.38 Id.39 355 F.3d 61 (2d. Cir. 2003).



FLSA purposes if it had functional control over workers.40 The Second Circuit

derived this test from Rutherford Food Corporation v. McComb41, a Supreme Court

case decided in 1947, well before Lippold.42 The Third Circuit used a similar test in

Enterprise Rent-A-Car for joint employer status under the FLSA, which is also

intended to determine whether the alleged employer has functional control over the

employee.43

The case for functional control in Lippold is even stronger than it was in

Zheng , and Ms. Lippold easily meets all of the Zheng factors and all four of the

Enterprise factors. Duggal Color’s premises were the only place that Lippold

worked, she worked under the supervision of Duggal’s employees, Duggal controlled

her hours and assignments, and Duggal had control over her timesheets that

needed to be submitted to CCNY in order for Lippold to receive pay and credit. In

short, Duggal Color had almost complete control over Lippold’s day-to-day activities

and exercised veto power over her pay and evaluation. There is no good reason why

the court could not have found Duggal Color to be Lippold’s joint employer. Instead,

it myopically focused on where Lippold’s paychecks were coming from, an approach

40 Id. at *72 – 75. The court applied these factors determine functional control: (1) whether [the putative joint

employer]’s premises and equipment were used for the plaintiffs' work ; (2) whether the [direct employer] had a

business that could or did shift as a unit from one putative joint employer to another; (3) the extent to which

plaintiffs performed a discrete line- job that was integral to [putative joint employer’s] process of production; (4)

whether responsibility under the contracts could pass from one subcontractor to another without material changes;

(5) the degree to which the [putative joint employer] or their agents supervised plaintiffs' work; (6) whether plaintiffs worked exclusively or predominantly for the [putative joint employer].41 331 U.S. 722 (1947).42 Zheng , 355 F.3d at 72.43 See In re Enterprise Rent-A-Car Wage & Hour Employment Practices Litigation, 683 F.3d 462, 469 (3rd. Cir.

2012). The factors the 3rd Circuit applies are: (1) authority to hire and fire employees; (2) authority to promulgate

work rules and assignments, and set conditions of employment, including compensation, benefits, and hours; (3)

day-to-day supervision, including employee discipline; (4) control of employee records, including payroll,

insurance, taxes, and the like. The court then notes that “[t]hese factors are not materially different than those used

by our sister circuits, and reflect the facts that will generally be most relevant in a joint employment context.”



at odds with Supreme Court’s Rutherford precedent and the circuit courts’

subsequent interpretations.

In 2014, a group of football players attempted to unionize at Northwestern

University.44 In order to be eligible to unionize, the players must be “employees”

within the meaning of the National Labor Relations Act.45 In this case,

Northwestern contended that the players were not employees — primarily because

they are not paid wages.46 The NLRB Regional Director considered and rejected this

contention, based on the economic value that the players receive and control over

the players’ activities that the University had. He emphasized factors that are

equally applicable to internships.

The Director analyzed whether the players performed services for the

university and whether they received anything of value in return.47 The players

clearly performed valuable services for the university —the university’s football

program generated $235 million in revenues over a nine year period.48 The Director

then considered whether the players received compensation for their services, as

would be required for them to be considered employees. He determined that the

players’ scholarships were “a transfer of economic value”.49 This would be relevant

to an internship because an intern also performs services for an employer, and in

44 Northwestern University employer and College Athletes Players Association (CAPA) petitioner, 2014 – 15

N.L.R.B. P15,781 (2014).45 29 U.S.C. § 157 (West, Westlaw through 2015) (“Employees shall have the right . . . to bargain collectively”

(emphasis added)).46 Id. at *2.47 Id. at *41.48 Id. 49 Id. at *42.



return is supposed to receive training, experience, and recommendations. As the

Supreme Court recognized in Portland Terminal, the employers in that case were

providing training that the trainees would otherwise need to enroll at a vocational

school to receive.50 Yet the benefit of an education, deemed sufficient to support

employee status before the NLRB in Northwestern University, has not been held

sufficient to support employee status under Title VII for interns.

The Director also determined that the players worked under the control of

the university.51 This factor is also almost always met in intern cases. Thus, the

players in Northwestern University received non-monetary compensation in the

form of education, worked for the benefit of the university, and performed their

duties under the control of the university. These factors led the Director to

determine that they were employees for NLRA purposes.52 In intern cases such as

Lippold, the court could have found that the intern received non-monetary

compensation in the form of education and experience, worked for the benefit of the

employer (Duggal Color), and worked under the control of Duggal Color. Though

courts almost uniformly deny relief to interns under Title VII based on the

formalism of a lack of monetary wages, cases such as Northwestern University show

that this stingy position is not required.

50 Walling v. Portland Terminal Co., 330 U.S. 148, 152 – 153 (1947).51 Northwestern University, supra note 44, at *45.52 Id. at *50.



VI. The Portland Terminal conception of a legitimate trainee conflicts

with courts’ resolutions of Title VII intern cases.

The Court in Portland Terminal described the trainees as working on the

railroad’s premises “for their own advantage.”53 The Court explicitly compared the

education the trainees were getting to an education at a vocational school. The

Department of Labor has published a policy fact sheet interpreting the Supreme

Court’s decision in Portland Terminal, laying out six factors which are relevant to

the determination of whether an internship program meets the trainee exclusion.54

A circuit split currently exists on the applicability of this test. The 5th, and 8th, and

10th Circuits follow the Fact Sheet #71 test to some degree.55 The 4th and 6th

Circuits instead apply a “primary benefit” test, asking whether the putative trainee

or employer receive the primary benefit of the relationship.56

53 Portland Terminal , 330 U.S. at 152.54 Fact Sheet #71: Internship Programs Under the Fair Labor Standards Act , U.S. DEPARTMENT OF LABOR (2010),

available at http://www.dol.gov/whd/regs/compliance/whdfs71.htm. The test from Fact Sheet #71 is:

1. The internship, even though it includes actual operation of the facilities of the employer, is similar to

training which would be given in an educational environment;

2. The internship experience is for the benefit of the intern;

3. The intern does not displace regular employees, but works under close supervision of existing staff;

4. 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;

5. The intern is not necessarily entitled to a job at the conclusion of the internship; and

6. 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, an employment relationship does not exist under the FLSA, andthe Act’s minimum wage and overtime provisions do not apply to the intern. This exclusion from the

definition of employment is necessarily quite narrow because the FLSA’s definition of “employ” is very

broad.

55 See Donovan v. American Airlines, Inc., 686 F.2d 267, 271 (5th Cir. 1982) (citing an earlier version of fact sheet

71); Petroski v. H & R Block Enterprises, LLC, 750 F.3d 976, 982 (8th Cir. 2014); Reich v. Parker Fire Protection

Dist., 992 F.2d 1023, 1025-26 (10th Cir. 1993) (citing an earlier version of fact sheet 71 as a balancing test).56 See McLaughlin v. Ensley, 877 F.2d 1207, 1209 (4th Cir. 1989); Solis v. Laurelbrook Sanitarium and School,

Inc., 642 F.3d 518, 525-26 (6th Cir. 2011).

http://www.dol.gov/whd/regs/compliance/whdfs71.htm






As explained by the commissioner in Northwestern University, an education

has economic value. This transfer of economic value from the employer to the intern

can be considered compensation just as it was considered compensation when

transferred from university to student-athlete. This compensation was enough to

support employee status under the National Labor Relations Act57 and it should

also be sufficient under Title VII. Both the NLRA and Title VII contain unhelpful

definitions of “employee,” and thus partially rely on the common law employee

relationship.58 However, this reliance on the common law is tempered by the canon

that remedial statutes should be liberally construed.59 Since both statutes rely on

the same source for their tests of employee status, and both statutes are remedial, it

is legitimate to compare tests of employee status under them. Therefore, interns

satisfying the Portland Terminal trainee test and thus receiving vocational training

should have their education counted as compensation (just as it was in

Northwestern University) and thus be considered employees for Title VII purposes.

If an intern is not “working for [her] own advantage”, then she would not

legitimately be classified as a trainee according to Portland Terminal.60 Of course,

the idea that the company gets no benefit from the deal is a legal fiction — if the

company really got no benefit they would not offer internships. In Portland

57 29 U.S.C. § 151 et seq. (West, Westlaw through 2015).58 29 U.S.C. § 152(3) (West, Westlaw through 2015) (NLRA; “The term ‘employee’ shall include any employee. . .

.”); 42 U.S.C. § 2000e(f) (West, Westlaw through 2015) (Title VII; “‘employee’ means an individual employed by

an employer . . . .”). See also FedEx Home Delivery v. N.L.R.B., 563 F.3d 492, 497 (D.C. Cir. 2009) (NLRA;

common law “remains in play”, but emphasis shifted); Wilde v. County of Kandiyohi, 15 F.3d 103, 105 (8th Cir.

1994) (Title VII; nearly all circuits use a hybrid of the common law and “economic realities”) .59 See, e.g., Dennis v. Higgins, 498 U.S. 439, 443 (1991).60 See supra Part III.



Terminal itself, the railroad was able to increase the pool of qualified workers for

the jobs that the railroad wanted to fill. This benefited the company, as even the

Supreme Court recognized by saying that the railroad received no “immediate”

advantage.61 Regardless how “immediate” the benefits to the company were, it

would not have offered the training if it did not expect to benefit in some way.

However, most internships fail to meet even this test. Usually, interns

perform substantive work for their employers. In fact, internships where the interns

do not perform substantive work are disfavored, because the intern does not receive

the opportunity to learn on-the-job about whichever business she is interning in.62

Therefore, a catch-22 exists: if the intern is not “working for [her] own advantage”

such that her education is non-monetary compensation, then that fact raises serious

doubts as to the legitimacy of the training offered by the internship. It is quite

possible that the intern is misclassified, and should be entitled to wages as an

employee, which would also make her eligible for Title VII protection.

VII. If courts accept that trainees are either compensated in-kind or else

misclassified, volunteers could still be left out.

In addition to trainees under Portland Terminal/Fact Sheet #71, volunteers

are also outside the scope of FLSA.63 The regulations defining a volunteer note that

“Congress did not intend to discourage or impede volunteer activities undertaken

61 Portland Terminal , 330 U.S. at 153.62 See Michael True, Starting and Maintaining a Quality Internship Program, U NIVERSITY OF VIRGINIA 7,

http://www.virginia.edu/career/intern/startinganinternship.PDF (last visited May 12, 2015) (Number 1 on “Ten

Concerns of Interns” is “Give us real work!”). 63 29 C.F.R. § 553.101 (West, Westlaw through 2015).

http://www.virginia.edu/career/intern/startinganinternship.PDF





for civic, charitable, or humanitarian purposes, but expressed its wish to prevent

any manipulation or abuse of minimum wage or overtime requirements through

coercion or undue pressure upon individuals to ‘volunteer’ their services,” and thus

it requires that volunteers offer their services without promise or expectation of

compensation and without pressure or coercion.64 Non-profit and government

employers, who are eligible to accept volunteers, do not typically categorize their

interns as either “trainees” or “volunteers”, which has led to a lack of rigor in

determining which standards properly apply to those interns’ exemptions f rom

FLSA.

It is unlikely that many interns are volunteers working for charitable

purposes without coercion, simply by virtue of the designation “intern”. Most

interns qua interns are working either as part of an organized educational program,

or are working for their own training and networking purposes. There are plenty of

bona fide volunteers, but few if any of them are called interns. If the intern is

working for her own educational or career advancement advantage, then she

engages in the work for selfish, not for “civic, charitable, or humanitarian” reasons.

Additionally, interns are subject to “pressure or coercion”, from two sources. First,

many interns are students enrolled in experiential learning programs through their

schools. Once enrolled in such a program, the student faces very strong pressures to

continue work. While these programs are often graded pass-fail, it is possible to fail

an experiential learning course by not completing the requirements. The threat of a

64 Id.



failing grade on one’s transcript is strong motivation for any student to continue in

an internship (this was the case in Lippold v. Duggal Color, discussed above). While

the pressure to complete an experiential learning program is internal to the

program, the pressure to enroll in one comes from employers and the job market.

Especially in a sluggish economy, employers expect applicants to have experience

and good recommendations.

For a true volunteer, Title VII protection may not be so relevant. After all, if

a volunteer is working for charitable purposes and is not under any pressure or

coercion to continue volunteering, then she has available the easiest remedy of all —

to quit. However, once a so-called volunteer has some reason why it is necessary to

complete a certain amount of time “volunteering” at the organization, this remedy is

no longer practical and the intern is subject to “pressure or coercion” to continue

working in an unsatisfactory placement.65 The more that external considerations

would induce an intern to continue working in an unsatisfactory placement, the

more workplace protections are needed and the less legitimate it is to classify the

intern as a volunteer.

VIII. What solutions or remedies could be created to solve the

vulnerability of interns?

When an ordinary employee suffers workplace discrimination or harassment,

she is entitled to certain remedies under Title VII.66 Chief among these remedies

65 See 29 C.F.R. § 553.101(c) (West, Westlaw through 2015) (volunteers are only those who offer services “without

pressure or coercion”). 66 42 U.S.C. § 2000e-5(g) (West, Westlaw through 2015).



are reinstatement and back pay.67 Even though these are the specifically

enumerated remedies, a court is also empowered to grant “any other equitable relief

as [it] deems appropriate.”68 Because interns are not paid, the remedy of back pay

would appear to be useless. Additionally, the education and networking that an

intern would hope to gain from the typical internship is also not likely to be

forthcoming after a reinstatement order.

Other equitable remedies for interns will likely require some judicial

creativity. One possibility is analogous to the back pay remedy — wages for the time

worked in the internship and the time the intern would have spent in the

internship but for the discriminatory discharge (or constructive discharge). This

remedy would be desirable because it would be a workable way to compensate

interns for their losses. Interns who are victims of discrimination have lost their

expectancy of the benefits they sought from the internship, and also lost all of the

time that they spent working as an intern toward those benefits. A wage remedy

would compensate the intern for the time that she spent working which would

otherwise have been a total loss due to the discrimination. The wages for the time

she would have continued interning but for the discrimination compensate the

intern for the lost expectancy of the non-monetary benefits of the internship.

Monetary compensation is appropriate because it is all that is realistically available

and because the intern can use the money to support him- or herself while working

for those benefits in another internship or in an educational institution.

67 Id. 68 Id.



In addition to the obvious benefits for the intern, this remedy would benefit

society by deterring employers from future discrimination. In order to prevent

employers from harassing or discriminating against their interns, they need to

know that there is a real possibility of liability. Only then would an economically

rational employer be willing to incur costs to comply. As it currently stands, a

rational employer would have no reason to go out of its way to prevent

discrimination or harassment against its interns.

A reasonable objection can be raised that the intern had no expectation of

wages, so the remedy is not restoring to her anything that she legitimately lost. The

justification for the remedy depends on the proper legal classification of the intern:

whether the intern is truly a volunteer working for charitable purposes without

coercion,69 a trainee within the meaning of Portland Terminal and DOL’s Fact

Sheet #71,70 or would be more properly classified as an employee.

As discussed above in Part VII, few interns are bona fide volunteers. If

instead the intern is truly a trainee under the Portland Terminal and DOL

standards, then monetary damages compensate the intern for lost training. Just as

an ordinary worker exchanges her labor for wages, an intern labors in exchange for

training. Since the discriminated-against intern has lost that training through the

discriminatory acts of her employer, it is reasonable to compensate her for that loss.

Courts could either award her the value of the training, measured in the amount of

69 See 29 C.F.R. § 553.101(a) (West, Westlaw through 2015).70 See supra Part III.



money it would cost to acquire that training elsewhere,71 or else could award the

value of the labor in the same way that courts do in quantum meruit constructive

contract cases. For interns properly classified as trainees, the value of the labor

would probably be minimal, since to even be a trainee, the employer must derive no

immediate advantage from the trainee’s labor.72 Therefore, for interns properly

classified as trainees, the measure of relief should be the value of the training that

they should have received. This measure reflects the understandings of the parties

as well as possible — that the intern would receive training.

For the vast bulk of interns, neither of the narrow categories of volunteer or

trainee are likely to fit. While there has been historically little litigation alleging

abuses of wage and hour laws under the guise of internships, more such cases are

starting to be filed.73 In the meantime, many internships violate the Portland

Terminal/Fact Sheet #71 test but interns are reluctant to come forward, perhaps

because they hope to impress their supervisors and secure paid employment.

However, in the case where the employer has discriminatorily harassed or

dismissed the intern, there is little chance of continuing goodwill by the employer

anyway. Therefore, it is possible that once Title VII is made available to interns,

they may be more likely to litigate discrimination claims than they have been to

litigate FLSA claims.

71 Cf. Portland Terminal , 330 U.S. at 152 – 53 (comparing the training received to learning at a vocational school).72 Indeed, the employers operation may occasionally be hindered. See Fact Sheet #71: Internship Programs Under

the Fair Labor Standards Act , U.S. Department of Labor (2010), available at

http://www.dol.gov/whd/regs/compliance/whdfs71.htm.73 See, e.g., Glatt v. Fox Searchlight Pictures, 293 F.R.D. 516 (S.D.N.Y. 2013).



For these misclassified interns, the justification for the back pay remedy

hinges on the interns entitlement to wages under the Fair Labor Standards Act. By

combining the FLSA’s unpaid wage remedies74 with Title VII’s back pay remedies,

courts can fashion relief to make interns whole while providing appropriate

deterrent to employers. Since Title VII authorizes whatever equitable relief the

court shall find appropriate, the court could apply the FLSA double damages

remedy to the time actually worked under FLSA itself, and apply it to the time after

discriminatory discharge as “other equitable relief ” under Title VII.75

IX.

Conclusion

Courts have misunderstood why people seek and accept internships, and

therefore misapprehend the protections against discrimination that interns require

and undermined laws meant to limit employer power over employees. Interns fall

into three categories: Trainees within the meaning of Portland Terminal and

Factsheet #71, volunteers within the definition in 29 C.F.R. § 553.101(a), and

misclassified employees who should be entitled to wages. Neither courts nor

employers have been rigorous about defining which one interns are.

Few interns are bona fide volunteers. For trainees, courts and agencies have

been flexible when evaluating what counts as compensation for purposes of other

laws that rely on employee status, such as where college football players have

attempted to collectively bargain under the National Labor Relations Act. For bona

74 Under the Fair Labor Standards Act, employers are liable for double damages for unpaid wages. 29 U.S.C. §

216(b) (West, Westlaw through 2015) (employer “shall be liable to the employee or employees affected in the

amount of their unpaid minimum wages . . . and in an additional equal amount as liquidated damages .”). 75 42 U.S.C. § 2000e-5(g) (West, Westlaw through 2015) (the court may order “any other equitable relief as the

court deems appropriate”).



fide trainees, the training they receive should be just as economically valuable as

the education the football players receive when determining if they qualify as

employees. If it isn’t, they have probably been misclassified and should have been

entitled to wages under FLSA.

Finally, I proposed remedies that courts could and should fashion within the

statutory framework of Title VII and the Fair Labor Standards Act that would give

interns real protection against discrimination and help make them whole in case

they do suffer it.

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