YAWN…..Eleventh Circuit’s Ruling Won’t Put You to Sleep but the Plaintiffs Might

It sounds like the start to a bad joke—25 student nurse anesthetists walk into a courtroom…let’s just hope you don’t fall asleep before we get to the punchline.

While the Eleventh Circuit’s opinion regarding whether a class of 25 anesthetist students are employees or interns under the FLSA began lightheartedly, the opinion quickly dug into the issue, making significant changes to the standard for determining FLSA intern standards in the Eleventh Circuit. The opinion in Schumann v. Collier Anesthesia, PA, 14-13169 (11th Cir. Sept. 11, 2015), adopted the reasoning from the Second Circuit’s recent decision in Glatt v. Fox Searchlight Pictures, Inc., 791 F.3e 376 (2d Cir. 2015), finding that the Department of Labor’s Handbook on trainees or students within the FLSA did not appropriately take into account all factors necessary to determine whether interns were entitled to federal minimum wage and overtime requirements. The Court adopted the six factors recently set forth by the Second Circuit, including:

1. 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.
2. The extent to which the internship provides training that 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.
3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
6. 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.
7. 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.

When reviewing these factors the Court noted that, “[n]o one factor is dispositive and every factor need not point in the same direction for the court to conclude that the intern is not an employee.” The court instead weighs and balances the circumstances that surround the seven factors. As a result of the adoption of the above-discussed seven factors, the Court vacated the district court’s decision and remanded the case, directing the district court to employ the above-stated factors to determine whether the students were employees or interns.

As this new standard continues to gain traction throughout the country, companies that are currently using unpaid interns in any capacity (whether through a credit-offered program with a university or through a more informal path) should perform a full analysis of whether their programs satisfy any or all of the seven factors discussed above.