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Monday, August 3, 2015

Second Circuit Adopts Pro-Employer "Primary Beneficiary" Test For Unpaid Internships

In a previous blog post, I discussed whether unpaid internships for private businesses run afoul of federal and state wage laws.  At that time (September 2013), the prevailing view was that such internships were prohibited by the U.S. Department of Labor's six-factor test (DOL Fact Sheet #71). 

The DOL test was applied in the case of Glatt v. Fox Searchlight Pictures, Inc., by the federal district judge who ruled that the plaintiff interns who worked without pay for Fox Searchlight Pictures were "employees" entitled to minimum wage and overtime under federal and state wage laws.  On Appeal, however, this ruling was reversed by the U.S. Court of Appeals for the Second Circuit (which has jurisdiction over federal courts in New York, Connecticut, and Vermont).

In its decision, issued on July 2, 2015, the Second Circuit held that the DOL's six-factor test is not controlling and instead adopted a "primary beneficiary" test that examines, under the totality of the circumstances, "whether the intern or the employer is the primary beneficiary of the relationship."  This test is much more favorable to employers than the DOL's test.  The Second Circuit remanded the case for a new decision by the district judge using this new legal standard.

The Second Circuit explained the "primary beneficiary" test as follows (legal citations omitted):

The primary beneficiary test has two salient features. First, it focuses on what the intern receives in exchange for his work.  Second, it also accords courts the flexibility to examine the economic reality as it exists between the intern and the employer.

Although the flexibility of the primary beneficiary test is primarily a virtue, this virtue is not unalloyed.  The defendants’ conception of the primary beneficiary test requires courts to weigh a diverse set of benefits to the intern against an equally diverse set of benefits received by the employer without specifying the relevance of particular facts.  In somewhat analogous contexts, we have articulated a set of non-exhaustive factors to aid courts in determining whether a worker is an employee for purposes of the FLSA.

In the context of unpaid internships, we think a non‐exhaustive set of considerations should include:

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.

Applying these considerations requires weighing and balancing all of the circumstances.  No 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 entitled to the minimum wage.  In addition, the factors we specify are non‐exhaustive -- courts may consider relevant evidence beyond the specified factors in appropriate cases.

Even more important for employers than the wording of this new "primary beneficiary" test is the Second Circuit's repeated emphasis that the test requires "a highly individualized inquiry."  This is legal lingo for "cannot be proved through common, generalized, class-wide evidence."  Consequently, although the Second Circuit coyly declined to answer the question in its opinion, this new test probably does not lend itself to collective actions (under the FLSA) and class actions (under state wage laws).  As a result, plaintiffs will have to pursue their claims individually and not as part of larger lawsuits.  While this will protect employers from expensive litigation, it also will disincentivize interns with meritorious but small claims from pursuing compensation in court.

Not surprisingly, the employment defense bar is very happy with the Second Circuit's decision.  For management-side commentary on this decision, see, e.g., here (Orrick), here (Littler), and here (Seyfarth Shaw).

If you or someone you know has worked as an unpaid intern and would like more information about the possibility of obtaining compensation under federal and state wage laws, please contact The Warshawsky Law Firm today.    


Wednesday, June 3, 2015

U.S. Supreme Court Clarifies Broad Scope Of Religious Protection Under Title VII

On June 1, 2015, the U.S. Supreme Court issued its eagerly anticipated decision in the case of Equal Employment Opportunity Commission v. Abercrombie & Fitch Stores, Inc., which presented the question whether an applicant for employment is required to inform the employer of her need for a religious accommodation in order to be protected by Title VII of the Civil Rights Act of 1964.  The Court (in an 8-1 decision written by Justice Scalia) said no, holding that "[a]n employer may not make an applicant's religious practice, confirmed or otherwise, a factor in employment decisions."  This important decision clarifies the broad scope of religious protection under Title VII.

Title VII is a federal statute that prohibits discrimination in employment based on race, color, religion, sex, or national origin.  Title VII applies to employers throughout the country with at least 15 employees, including federal, state, and local government agencies.  Under Title VII, it is an “unlawful employment practice” for a covered employer “to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin.”  42 U.S.C. § 2000e-2(a).

In the Abercrombie case, the plaintiff was a practicing Muslim who applied for a position in an Abercrombie store.  She was wearing a traditional headscarf during her interview.  She was interviewed by an assistant store manager, who considered the plaintiff qualified to be hired, but was concerned that the headscarf would conflict with the company's "Look Policy," which strictly prohibited employees from wearing "caps" at work.  The assistant store manager raised this concern to the store manager, who provided no guidance, then she spoke with the district manager, who told her that the headscarf would violate the Look Policy.  The assistant store manager mentioned that she believed the plaintiff wore the headscarf because of her faith, but the district manager said that the Look Policy applied to all headwear, religious or otherwise, and he decided that the plaintiff could not be hired.

The U.S. Equal Employment Opportunity Commission (EEOC) filed the lawsuit on behalf of the Muslim applicant, claiming that the company's Look Policy violated the plaintiff's rights under Title VII.  The district court ruled in favor of the plaintiff, but the Tenth Circuit reversed on the grounds that the Look Policy was a "neutral" job requirement.  The EEOC appealed to the U.S. Supreme Court, which ruled in favor of the plaintiff.

The Supreme Court explained that Title VII by its terms protects "all aspects of religious observance and practice, as well as belief, unless an employer demonstrates that he is unable to reasonably accommodate" the employee's religious observance or practice "without undue hardship on the conduct of the employer's business."  See 42 U.S.C. § 2000e(j).  In other words, Title VII imposes an affirmative duty on employers to reasonably accommodate an employee's religious practices, unless doing so would impose an "undue hardship" on the business.  Contrary to the company's position, the Supreme Court emphasized that "Title VII does not demand mere neutrality with regard to religious practices - that they be treated no worse than other practices.  Rather, it gives them favored treatment, affirmatively obligating employers not 'to fail or refuse to hire or discharge any individual . . . because of such individual's' 'religious observance and practice'."  Consequently, "Title VII requires otherwise-neutral policies to give way to the need for an accommodation."

Based on these principles, the outcome in the Abercrombie case was clear:  The company could not refuse to hire the plaintiff based on its Look Policy merely because she wore a Muslim headscarf.  The Court did not decide if accommodating the plaintiff's headscarf by making an exception to the company's Look Policy would impose an "undue burden" on Abercrombie; that issue will be considered by the lower courts on remand (unless the case is settled). 

Importantly, the Court held that the employer does not have to "know" as a fact that the employee needs a religious accommodation for the protections of Title VII to apply.  Even a mere suspicion or belief is enough, because the statute focuses on the employer's motive not its knowledge.  As the Court explained:

"Instead, the intentional discrimination provision prohibits certain motives, regardless of the state of the actor’s knowledge.  Motive and knowledge are separate concepts.  An employer who has actual knowledge of the need for an accommodation does not violate Title VII by refusing to hire an applicant if avoiding that accommodation is not his motive.  Conversely, an employer who acts with the motive of avoiding accommodation may violate Title VII even if he has no more than an unsubstantiated suspicion that accommodation would be needed."

"Thus, the rule for disparate-treatment claims based on a failure to accommodate a religious practice is straightforward:  An employer may not make an applicant’s religious practice, confirmed or otherwise, a factor in employment decisions.  For example, suppose that an employer thinks (though he does not know for certain) that a job applicant may be an orthodox Jew who will observe the Sabbath, and thus be unable to work on Saturdays.  If the applicant actually requires an accommodation of that religious practice, and the employer’s desire to avoid the prospective accommodation is a motivating factor in his decision, the employer violates Title VII."

Title VII's "disparate treatment provision prohibits actions taken with the motive of avoiding the need for accommodating a religious practice.  A request for accommodation, or the employer’s certainty that the practice exists, may make it easier to infer motive, but is not a necessary condition of liability."

In sum, under Title VII an employer may not base employment decisions on an applicant's or employee's known or suspected religion, including beliefs, observances, and practices, and must accommodate an employee's religion, unless doing so would impose an undue burden on the business.

For additional commentary on the Abercrombie decision, see here (SCOTUS blog) and here (Politico).

If you or someone you know has been the victim of religious discrimination in the workplace, please contact The Warshawsky Law Firm today. 


Monday, September 15, 2014

Workplace Bullying Is Not Illegal Unless It Is Motivated By The Victim's Membership In A Protected Class

Workplace bullying is a too common experience for too many employees, whether blue collar or white collar, hourly or salaried, administrative, technical, or professional.  As an employment lawyer, I frequently am called and emailed by people who have been bullied at work by coworkers, supervisors, and/or managers and who want to know their rights.  Unfortunately, unless the bullying was motivated by the victim's membership in a protected class, the victim essentially has no "rights" under existing federal, state, and city employment laws.

This important issue -- one that most people are not aware of -- was highlighted in a decision issued today by the U.S. District Court for the Southern District of New York (SDNY) in the case of Alfred Johnson v. City University of New York, No. 14-CV-587 (Hon. Valerie Caproni).  The plaintiff in Johnson was a lecturer in the music department of CUNY's Medgar Evers College.  He alleged that, for more than three years, he had been "bullied" and "harassed" by his department chairman.  After complaining about the bullying, first to the college and then to the U.S. Equal Employment Opportunity Commission (EEOC), his appointment was not renewed, which he alleged was retaliation for his complaints. 

The plaintiff then filed a lawsuit against CUNY, representing himself (pro se), in which he charged the college with wrongful discharge, failure to hire, failure to promote, and retaliation.  However, he did not allege that this mistreatment was based on his race, sex, age, national origin, religion, disability, or any other protected characteristic.  At a court conference, the plaintiff confirmed to the judge that "he was not alleging that his Chair's hostility was motivated by his race, sex, age, or national origin."  Consequently, the judge granted CUNY's motion to dismiss the lawsuit.  The judge explained the basis of her ruling in the opening paragraph of her decision:

"Bullying and harassment have no place in the workplace, but unless they are motivated by the victim's membership in a protected class, they do not provide the basis for an action under Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e-2 (Title VII), and any complaint to the Equal Employment Opportunity Commission (EEOC) based on them does not constitute 'protected activity' under Title VII.  Victims of non-discriminatory bullying at the workplace, like those treated unfairly for reasons other than their membership in a protected class, must look outside Title VII to secure what may be their fair due.  The Court does not condone bullying, but it cannot read Title VII to protect its victims unless the bullying reflects discrimination based on race, color, religion, sex, or national origin."

The key point is that Title VII and other employment discrimination laws -- including, for example, the Age Discrimination in Employment Act (ADEA), the Americans with Disabilities Act (ADA), the New York State Human Rights Law, and the New York City Human Rights Law -- only protect employees from mistreatment that is motivated by one or more of their protected characteristics.  The term "protected characteristic" refers to certain physical and social traits that are deemed by the law to be unrelated to a worker's occupational abilities, including age, sex/gender, race/color, national origin, religion, marital status, pregnancy, disability, and sexual orientation.  Importantly, different laws protect different characteristics.  For example, just about every law prohibits race and sex discrimination, but only the state and city laws prohibit sexual orientation discrimination.  A qualified employment lawyer will know which laws potentially apply in each particular situation.

The bottom line is that, for a victim of workplace bullying to be able to sue in court, the bullying must have been motivated by the employee's protected characteristic(s).  This is because the employment discrimination laws only protect against certain kinds of mistreatment, specifically defined in each law.  These laws do not protect against bullying, harassment, hostility, meanness, and unfairness in general.  Unfortunately for the plaintiff in the Johnson case, this means that his lawsuit against CUNY was doomed from the start.  Judge Caproni had no choice but to dismiss the case. 

If you or someone you know has been the victim of workplace discrimination, please contact The Warshawsky Law Firm today.  





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