Clyde Snow

Intern Class Actions on the Rise

by | Jul 20, 2016

The DOL has cracked down on private for profit companies’ use of unpaid interns.  Oftentimes, college students or recent graduates are eager for experience and are willing to work for free.  If your “intern” is a benefit to the company, your intern is more than likely an employee and is entitled to minimum wage and overtime.  While the DOL has put forth a six part test to analyze whether an intern is really masking as an employee entitled to minimum wage and overtime, see https://www.dol.gov/whd/regs/compliance/whdfs71.htm, a simple rule of thumb is to question whether, if the intern no longer worked for you, would it be necessary to have an employee absorb those tasks.  If so, he or she is probably an employee and will need to be paid. 

A case in point involves a recent putative wage class action filed in Texas federal court against a fitness boot camp for allegedly requiring recruits to participate in a month’s long unpaid internship program before they become paid trainers.  The suit alleges violations under the Fair Labor Standards Act:  “This action is appropriate for class or collective action status because … the internship is always unpaid, it has always required essentially the same type of work of the intern, it has always been treated as an ‘extended audition’ for the role of primary trainer and it has always suffered from the same lack of compliance with [the FLSA],” the lawsuit says.

The case is Schoellhorn v. Camp Gladiator Inc., case number 3:16-cv-02064, in the U.S. District Court for the Northern District of Texas. If successful, the class plaintiffs may be entitled to overtime wages, back pay, benefits, liquidated damages, and fines and penalties under state or federal law. 

If you have an intern program, you should consult employment counsel to mitigate against class claims and DOL investigations.

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