?Takeaway: This case represents a victory for employers operating unpaid training programs that provide trainees with valuable practical experience and training despite also providing some benefit to the entities. The 11th Circuit’s opinion also has important lessons for entities that operate unpaid training programs; these lessons include the importance of establishing the educational value of an unpaid training program and communicating that trainees or interns should have no expectation of pay or a job following the completion of the training.
This case also provides clarity on the applicability of the FLSA’s internship exception to public agencies—namely, that a public agency may argue that an individual qualifies as either a volunteer or an intern.
When classifying individuals as interns or trainees under the FLSA’s internship exception, employers should remember that differences in the facts might result in a different outcome.
In addition, employers with unpaid training programs must ensure that they comply with applicable state laws, which may be different from the FLSA, and with any differing interpretations of the exemption by federal courts in other applicable jurisdictions.
The Fair Labor Standards Act (FLSA) did not require a public agency to pay wages to a participant in its training program for autopsy forensic photography because she was an intern, not an employee, the 11th U.S. Circuit Court of Appeals ruled.
The plaintiff filed a lawsuit in the U.S. District Court for the Southern District of Florida, against Miami-Dade County, seeking to recover unpaid minimum wage and overtime that she claimed the county owed her for time spent in a training program—specifically, the Miami-Dade County Medical Examiner’s Forensic Imaging Preceptorship Program. According to the plaintiff, the work in the program qualified her as an employee within the meaning of the FLSA.
The FLSA provides a specific exception for volunteers, stating that “any individual who volunteers to perform services for a public agency” is not an employee within the meaning of the law. A volunteer performs hours of service for a public agency for civic, charitable or humanitarian reasons, without promise, expectation or receipt of compensation for services rendered.
An internship exception to the FLSA’s definition of “employee” also exists pursuant to case law. Under applicable case law, an intern, student or other trainee who is the primary beneficiary of a training or educational program is also not an employee under the FLSA. While the relevant cases addressing this internship exception concerned programs run by private enterprises, that case law does not limit the exception to private enterprises.
To determine whether an individual is the primary beneficiary of a training program, courts in the 11th Circuit analyze seven, nonexhaustive factors, including the extent to which:
- The intern and the employer clearly understand there is no expectation of compensation.
- The internship provides training similar to that which would be given in an educational environment.
- The internship is tied to the intern’s formal education program.
- The internship accommodates the intern’s academic commitments.
- The internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
- The intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
- The intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.
The county argued that the plaintiff was either a volunteer or an intern, but not an employee, and therefore was not entitled to minimum wage and overtime under the FLSA. According to the plaintiff, the volunteer exception replaced the internship exception for public agencies in 1985, so the county could not argue she qualified as an intern, and she did not qualify as a volunteer.
The parties cross-moved for summary judgment on the issue of the plaintiff’s status as an employee under the FLSA.
The district court applied this primary-beneficiary test to conclude that the plaintiff was an intern, not an employee, and granted summary judgment in the county’s favor. On appeal, the 11th Circuit affirmed the district court’s summary judgment ruling.
In doing so, the appeals court rejected the plaintiff’s argument that the volunteer exception replaced the internship exception for public agencies, explaining that, “the two exceptions serve distinctly different purposes; the volunteer exception allows public agencies to accept the services of volunteers without having to treat them as employees, while the generally applicable internship exception allows all employers to provide training and education without having to pay their interns and trainees a wage.”
Thus, according to the 11th Circuit, a public agency may argue that an individual is either a volunteer or an intern and therefore not an employee under the FLSA. A private entity may argue only that an individual is an intern under the primary-beneficiary test and therefore not an employee.
The appeals court held that the plaintiff did not qualify as a volunteer because the parties had stipulated that the plaintiff did not participate in the training program for civic, charitable or humanitarian reasons, even in part.
However, the 11th Circuit agreed with the district court’s analysis that the plaintiff qualified as an intern because the undisputed facts showed that the plaintiff clearly understood she would not be paid and that she was not entitled to a job with the county following her internship. In addition, she gained both valuable practical experience and training from forensic photography professionals and program assignments throughout the entirety of her participation.
The county’s receipt of some benefit from the internship did not transform the county into the primary beneficiary of the relationship. The appeals court also rejected the plaintiff’s argument that the program’s six-month duration was grossly excessive, especially in comparison to a four-year program.
McKay v. Miami-Dade County, 11th Cir., No. 20-14044 (June 9, 2022).
Natalie F. Bare is an attorney in the Philadelphia office of Duane Morris LLP.
