In Schumann v. Collier Anesthesia, P.A., 2015 U.S. App. LEXIS 16194, *28-29 (11th Cir. Fla. Sept. 11, 2015), the Eleventh Circuit provided guidance in deciding whether students in modern-day internship programs are classified as “employees” under the Fair Labor Standards Act (“FLSA”).
In this case, the plaintiffs were 25 former student-registered nurse anesthetists (“SRNAs” or “Students”) who attended a master’s degree program at Wolford College with the goal of becoming registered nurse anesthetists (“CRNAs”). Pursuant to the relevant state laws and accreditation standards, the Students were required to participate in a minimum of 550 clinical cases in a variety of surgical procedures. This requirement is designed to ensure that when students graduate and become licensed, they will be able to safely and competently monitor the status of their patients without another licensed professional in the room.
The Students performed their internships at Collier Anesthesia, P.A. Subsequently, they brought legal action seeking to recover unpaid wages and overtime under the FLSA. The district court applied the factors set forth in the U.S. Supreme Court’s 1947 decision of Walling v. Portland Terminal, 330 U.S. 148 (1947) and concluded that the Students were not “employees” under the FLSA. Accordingly, the district court entered summary judgment in favor of the Defendants.
On appeal, the Eleventh Circuit recognized that Portland Terminal was the seminal case involving whether trainees are “employees” for purposes of the FLSA. In Portland Terminal, the defendant railroad company offered a week-long training course for prospective employees. Although participants were not guaranteed a job upon completion of the course, they were required to finish the course to be eligible to be hired as brakemen for the railroad. During training, the trainees performed actual work that benefitted the railroad. The Supreme Court held that the trainees were not “employees” under the FLSA, concluding that the training program “most greatly benefit[ted]” the trainees.
The Eleventh Circuit noted that, since Portland Terminal, other courts deciding this issue have focused on the language describing the programs as “most greatly benefit[ting]” the trainees, concentrating on determining the “primary beneficiary” of the training program in order to decide if the trainees were “employees” under the FLSA.
The Court observed, however, that modern internship programs (such as the one at issue) are vastly different from the training program at issue in Portland Terminal. The Court faced a dilemma regarding how to discern the primary beneficiary in a relationship where both the intern and the employer may obtain significant benefits. The Court determined that the best way to do this was to focus on the benefits to the student while considering whether the manner in which the employer implements the internship program takes unfair advantage of or is otherwise abusive towards the student.
To accomplish this, the Court concluded that the Second Circuit’s recent decision in Glatt v. Fox Searchlight Pictures, Inc., 791 F. 3d 376 (2nd Cir. 2015) articulated a proper “non-exhaustive set of considerations” to be evaluated in determining the “primary beneficiary” in cases involving modern internships. The Court noted that Glatt’s factors “effectively tweak[ed] the Supreme Court’s considerations in evaluating the training program in Portland Terminal to make them applicable to modern-day internships like the type at issue here.”
The Glatt factors adopted by the Eleventh Circuit are as follows:
- The extent to which the intern and the employer clearly 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.
- The extent to which the internship provides training that [29] 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.
- The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
- The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
- The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
- 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.
- 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.
The Court noted that these factors are not exhaustive, and that no one factor is dispositive and that each every factor need not point in the same direction for the court to conclude that the intern is not an employee. With these factors in mind, the Court vacated the district court’s entry of summary judgment in favor of the defendants and remanded this case to the district court for further proceedings consistent with its opinion.