U.S. Court of Appeals for the Second Circuit

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Second Circuit denies class certification in unpaid intern wage case

July 02, 2015

The Second Circuit vacated a decision that certified a class of unpaid interns, who claimed compensation as employees under the Fair Labor Standards Act (FLSA) and the New York Labor Law (NYLL). The Department of Labor (DOL) urged the lower court to adhere to a six-factor test set out in an agency fact sheet to determine whether unpaid interns are, in fact, employees under the FLSA and NYLL.

The Second Circuit declined to give deference to DOL’s fact sheet and rejected DOL’s approach, which required a position to meet all six factors to qualify for unpaid status, as “too rigid.” Instead, the Second Circuit agreed with defendants, and the position of the U.S. Chamber as amicus, “that the proper question is whether the intern or the employer is the primary beneficiary of the relationship.”

U.S. Chamber files amicus brief

April 04, 2014

In the coalition brief, the Chamber asked the Second Circuit to reverse the District Court’s ruling and hold that the primary benefit test should be the standard in determining whether interns are employees under the Fair Labor Standards Act (FLSA) and the New York Labor Law (NYLL). The brief argued that the primary benefits test is best suited to encourage the continued development of mutually beneficial internship opportunities, while also barring exploitative internships, ensuring that the many businesses offering valuable, well-designed unpaid opportunities may continue. The Chamber also pointed out that the six-factor test, adopted by the District Court, and advocated for by the plaintiff, would prohibit businesses from deriving any “immediate advantage” from the work that unpaid interns provide and subsequently, would reduce the number of unpaid internship opportunities available. Similarly, increasing the regulation of unpaid internships will be detrimental to the benefits and on the job learning opportunities gained by interns who participate in productive and worthwhile tasks.

The Chamber filed the brief jointly with the California Employment Law Council.

Matthew S. Hellman, Jessie K. Liu and Lindsay C. Harrison of Jenner & Block LLP represented the U.S. Chamber as co-counsel to the National Chamber Litigation Center in this case.

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