Primary Beneficiary Test May Impede Intern Class Actions
In their Second Circuit Review, Martin Flumenbaum and Brad S. Karp discuss the court's consideration of the appropriate standard for determining when an intern qualifies as an employee under the Fair Labor Standards Act, and therefore must be compensated for his work.
July 21, 2015 at 04:34 PM
14 minute read
This month, we discuss Glatt v. Fox Searchlight Pictures,1 in which the U.S. Court of Appeals for the Second Circuit considered the appropriate standard for determining when an intern qualifies as an employee under the Fair Labor Standards Act (FLSA), and therefore must be compensated for his work. In its decision, written by Judge John Walker, Jr. and joined by Judges Dennis Jacobs and Richard Wesley, the court concluded as an issue of first impression in this circuit that the proper inquiry turns on whether the intern or the employer is the primary beneficiary of the relationship.
The court also found that the question of whether each plaintiff satisfied the primary beneficiary standard called for a highly individualized analysis that required particularized proof. In so ruling, the court vacated and remanded the district court's opinion granting partial summary judgment for plaintiffs, as well as the district court's orders certifying a New York class and conditionally certifying a nationwide collective action.
Background
Under the FLSA, employers are required to pay all employees a specified minimum wage and overtime wages of time and one-half for hours worked in excess of 40 hours per week.2 New York Labor Law (NYLL) requires the same, except that it specifies a higher minimum wage than the federal standard.3
While the strictures of both statutes apply only to employees, neither statute provides helpful guidance on what circumstances qualify workers as employees. The FLSA defines “employee” as an “individual employed by an employer”4 and “employ” as “to suffer or permit to work.”5 The NYLL similarly defines “employee” as “any individual employed, suffered or permitted to work by an employer.”6
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