U.S. Court of Appeals for the Second Circuit.

The U.S. Court of Appeals for the Second Circuit added clarity to its seven-part test for identifying when an intern should be considered an employee under the Fair Labor Standards Act in its landmark 2016 decision Glatt v. Fox Searchlight Pictures.

The panel of Circuit Judges Dennis Jacobs, José Cabranes and Richard Wesley upheld U.S. District Judge J. Paul Oetken's order granting summary judgment for the defendant media company. The panel ruled that Oetken had properly reasoned that the factors earlier outlined by the appellate court in Glatt weighed in favor of Hearst.

Plaintiffs and amici argued that Hearst was required to meet all seven of the factors, which Oetken found it did not. The panel, however, disagreed, finding that “a district court can strike a balance on the totality of the circumstances to rule for one side or the other.”

“There are contested issues that bear on the quality of each intern's experience,” the panel stated. “The crucial point is that a district court may rule on summary judgment if it can weigh the Glatt factors on the basis of facts that are not in dispute.”

An initial interlocutory appeal in the suit, Wang v. The Hearst Corp., No. 16‐3302, reached the Second Circuit at the same time as Glatt. However, the suit was remanded back to the district court while Glatt's order was issued. Using the then-new “primary beneficiary” test from the appellate court, Oetken found six of the considerations—no expectation of compensation, how similar the training is to that found in the classroom, relevancy to the intern's major, academic accommodations, limited to learning rather than simply working, no agreement to later employment—in favor of Hearst.

For the seventh factor—complementing, rather than displacing, work actual employees do—Oetken found that the interns were favored there because they completed work regularly performed by employees at the magazines they were at.

The panel found that this factor alone was not dispositive, though, noting that the Glatt factors had intentionally omitted criteria being pushed by the U.S. Department of Labor at the time that no advantage would be derived from the intern's work for the employer.

“It is no longer a problem that an intern was useful or productive,” the panel stated.

At the heart of the specific appeal, according to the panel, was the second factor dealing with training. Appellants argued that Oetken erred here by broadening the “training” component to include “practical skills,” according to the panel.

“The interns would thus limit the discussion of beneficial training under the second factor to education that resembles university pedagogy to the exclusion of tasks that apply specific skills to the professional environment,” the panel said.

Disagreeing with this interpretation, the panel said the appellants ignored instructions in Glatt about a key element in the intern-employer relationship expectation that, essentially, part of any joblike experience is simply doing the most basic level of work.

“The appellants' tacit assumption is that professions, trades, and arts are or should be just like school; but many useful internships are designed to correct that impression,” the panel said.

Outten & Golden partner Rachel Bien led the former intern's legal team on appeal. In a statement, she lamented the decision, calling it a furtherance of a trend in the Second Circuit that treats interns “far less favorably than other workers” under the FLSA. She argues that the Glatt test, which the panel noted breaks from previous kinds of test, “devalues the important work that interns do every day and the value of work in general.”

“Fortunately, many employers do pay their interns, helping these mostly young people contribute to the cost of their educations and allowing them to avoid sinking even further into debt,” Bien said. “It is a shame that some of the most prominent names in the fashion and media industries do not believe that interns who file their expenses, run their errands, and do a great deal of very useful work do not deserve to be paid a minimum wage.”

Hearst's internal counsel handled the appeal, with attorneys Jonathan Donnellan and Kristina Findikyan present for both the district court case and the appeal. Neither they nor other attorneys listed could be reached for comment.