Controversy swirls around the recent passage of an Arizona state senate bill which detractors say would allow discrimination against individuals if it’s founded on religious beliefs.
On January 16, the Arizona Senate Committee on Government and Environment voted 4 to 2 in favor of SB 1062. The measure would amend Arizona’s Religious Freedom Restoration Act to among, other things, expand the definition of a “person” to include any individual, association, partnership, corporation, church, estate, trust, foundation, or other legal entity. According to the bill’s opponents, the change would permit businesses in the state to discriminate against LGBT individuals, unmarried women, and non-Christians.
The proposed legislation would also expand the meaning of “exercise of religion” to include both the practice and the observance of religion. Moreover, if enacted, the current law’s prohibition against burdening a person’s exercise of religion by “government” action would be changed to “state” action, but would also encompass nongovernmental persons. In addition, the bill would allow a free exercise of religion defense to be raised in any judicial proceeding, regardless of whether the government is a party to the proceeding.
With these changes, the revised Arizona law would provide that state action “may substantially burden a person’s exercise of religion” only when the opposing party is able to demonstrate that the application of the burden to the person’s exercise of religion in that particular instance is both (1) in furtherance of a compelling governmental interest and (2) the least restrictive means of furthering that compelling governmental interest.
According to media reports, the bill’s sponsor, Senator Steve Yarbrough, has said that the bill would protect Christian photography business owners who decline to photograph lesbian weddings due to religious beliefs; hotel owners who (presumably due to religious beliefs) refuse to rent rooms to LGBT people; and businesses with a religious objection to hiring unmarried women.
Time spent donning and doffing protective clothes not compensable, High Court holds, rejecting use of de minimis standard
By Lisa Milam-Perez, J.D.
The time spent by production workers donning and doffing their protective gear was not compensable under the FLSA, a unanimous Supreme Court ruled on Monday, affirming the Seventh Circuit in a decision authored by Justice Scalia. In Sandifer v U.S. Steel Corp, the High Court clarified the scope and definition of “clothes” and “changing” within the meaning of Section 203(o) of the Act, which provides that donning and doffing activities may be exempt from compensable time under the terms of, or custom or practice arising under, a collective bargaining agreement. The Court also set forth what it deemed a more workable approach to resolving whether time spent donning and doffing protective gear was compensable, eschewing the de minimis doctrine used by some circuits as ill-suited to a statutory provision that is itself “all about trifles.”
Wage dispute. Hourly workers at U.S. Steel’s Gary Works plant filed an FLSA collective action alleging they were unlawfully denied pay for the time they spent putting on and taking off various required work clothes and protective gear at the start and end of their work day. The CBA between U.S. Steel and the union did not require compensation for such time and, dating as far back as 1947, their contracts had never had such a requirement. The Seventh Circuit held that, because the applicable CBA did not require compensation for donning and doffing activities, U.S. Steel did not have to pay workers for such time.
Had the clothes-changing time not been rendered noncompensable pursuant to Sec. 203(o), it would have been a “principal activity,” and thus compensable. The employees had argued to no avail that this provision was inapplicable, though, because their clothes were not “clothes” within the meaning of the Act, but rather safety equipment. However, the appeals court held the required work gear was both clothing and personal protective equipment, reasoning that it would be absurd to exclude all work clothing that had a protective function from the reach of this provision.
The employees petitioned the Supreme Court, contending that the decision conflicted with the First Circuit’s holding in Tum v. Barber Foods, Inc and, more importantly, with the Supreme Court’s decision in IBP, Inc v. Alvarez. The Court agreed to resolve the circuit split over the scope of Sec. 203(o) and found the protective gear at issue qualified as “clothes,” and donning and doffing the gear constituted “changing clothes” within the meaning of the statutory provision.
“Clothes,” defined. Applying the ordinary, common meaning of the term “clothes” as defined in dictionaries from the era in which Sec. 203(o) was enacted, the Supreme Court reasoned there was no basis for interpreting the term in any other manner so as to omit protective clothing from its reach. “Clothes” were defined as “items that are both designed and used to cover the body and are commonly regarded as articles of dress,” and “that is what we hold to be the meaning of the word” for purposes of the statute, the Court wrote. It rejected the employees’ assertion that the word was too indeterminate to attribute a general meaning to the term.
Nor was the Court swayed by the employees’ additional plea that, regardless of what that term “clothes” did include, it necessarily excluded items designed to protect employees from workplace hazards. The distinction they urged would potentially nullify Sec. 203(o), the Court noted. The compensation requirement, to which this provision is merely an exception, applies to time spent changing clothes only when those tasks constitute “an integral and indispensable part of the principal activities for which covered workmen are employed.” As the Court pointed out, though, “protective gear is the only clothing that is integral and indispensable to the work of factory workers, butchers, longshoremen, and a host of other occupations.” Were the employees’ definition of “clothes” to apply, Sec. 203(o) would cover only “costumes” worn by workers such as waiters, doormen, and train conductors.
The Court didn’t sweat the “fanciful hypotheticals” presented by the employees in their effort to show that a too-generic definition of “clothes” would “cast a net so vast as to capture all manner of marginal things — from bandoliers to barrettes to bandages.” As the statutory context made clear, the “clothes” referred to are those that are integral to the performance of one’s job, and the items referenced by the employees didn’t fit the bill. (On the other hand, the interpretation put forth by the employer, which would encompass in the exception “the entire outfit that one puts on to be ready for work,” might be “more readily administrable,” the Court said, but was even more lacking in textual foundation than the employees’ proposed definition.)
Even as to those items that can be regarded as integral to job performance, though, the Court noted that its definition “does not embrace the view, adopted by some Courts of Appeals, that ‘clothes’ means essentially anything worn on the body — including accessories, tools, and so forth. The construction we adopt today is considerably more contained,” and affords a distinction between clothes and other “wearable items that are not clothes, such as some equipment and devices.”
The employees pointed to 12 specific items they argued were “protective gear” and thus not covered under Sec. 203(o), including a flame-retardant jacket, a hard hat, and other items, all of which they wanted to be paid to don and doff. But only three items — safety glasses, earplugs, and a respirator — were not “clothes” as defined by the Court above.
“Changing,” ill-defined. Disagreeing with the employees’ contention that the normal meaning of “changing clothes” would not encompass the act of putting protective gear on over one’s street clothes, the Court looked to the purpose underlying Sec. 203(o): “to permit collective bargaining over the compensability of clothes-changing time and to promote the predictability achieved through mutually beneficial negotiation.” If changing only meant “substituting,” as the employees suggested, it would afford little predictability — and thus little opportunity for meaningful bargaining.
“Whether one actually exchanges street clothes for work clothes or simply layers garments atop one another after arriving on the job site is often a matter of purely personal choice,” the Court noted. “That choice may be influenced by such happenstances and vagaries as what month it is, what styles are in vogue, what time the employee wakes up, what mode of transportation he uses, and so on.” The Court declined to read the provision as allowing employees “to opt into or out of its coverage at random or at will.”
De minimis standard disfavored. The more salient question, at any rate, was whether the time spent donning and removing the few items of non-clothes protective gear had to be deducted from the otherwise-noncompensable donning and doffing time. Some circuit courts have invoked the de minimis standard to address the matter, but in the Supreme Court’s view, the doctrine was ill-suited to a statute that is itself “all about trifles” such as “the relatively insignificant periods of time in which employees wash up and put on various items of clothing needed for their jobs.”
A more appropriate way to proceed, according to the Court, was for courts to ask whether the period at issue can, “on the whole,” be fairly characterized as “time spent in changing clothes or washing.” If so, then the entire donning and doffing period qualifies under Sec. 203(o) and the time spent putting on and removing protective items “need not be subtracted.” But if an employee spends the great majority of this time putting on and removing equipment or other non-clothes items, then the entire period would not fall under the exception — even if some clothes items were donned and doffed during this time as well.
“[I]t is most unlikely Congress meant Sec. 203(o) to convert federal judges into time-study professionals,” the Court reasoned. “That is especially so since the consequence of dispensing with the intricate exercise of separating the minutes spent clothes-changing and washing from the minutes devoted to other activities is not to prevent compensation for the uncovered segments, but merely to leave the issue of compensation to the process of collective bargaining.”
OMB approves paperwork for revised OFCCP disability and veterans regulations, including new disability self-id form
On January 22, 2014, the Office of Management and Budget (OMB) approved the paperwork requirements for the OFCCP’s final rule that revises the agency’s regulations which implement Section 503 of the Rehabilitation Act of 1973 (Section 503), including the eagerly-awaited finalized version of the new standard “Voluntary Self-Identification of Disability” form. As previously reported in Employment Law Daily, the OMB approved the paperwork requirements for the final rule that revises the OFCCP’s regulations implementing the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA) on January 13, 2014. OMB approval of the paperwork requirements is a necessary step for the rules to take legal effect.
Both final rules were published in the Federal Register on September 24, 2013 (78 FR 58614–58679 and 78 FR 58682-58752). The VEVRAA rule revises the OFCCP’s regulations at 41 CFR Part 60-300 (and rescinds the outdated regulations at 41 CFR Part 60-250); the Section 503 rule revises the agency’s regulations in 41 CFR Part 60-741. The revised regulations will require federal contractors to establish a 7 percent utilization goal for workers with disabilities and a variable hiring benchmark for protected veterans as well as new data collection and recordkeeping requirements.
Although federal contractors and subcontractors will be required to comply with Subparts A, B, D, and E of the both new rules by March 24, 2014, the OFCCP has indicated that contractors with existing affirmative action programs (AAPs) on the effective date may wait to comply with the new requirements of Subpart C of both rules as part of their standard AAP review and updating cycle. In other words, contractors that have an AAP in operation (mid-cycle) on March 24 may wait to comply with the new requirements of Subpart C of both rules until their new annual AAP cycle begins. However, contractors must still comply with all existing obligations under the current regulations while they are waiting to comply with the new requirements.
Invitations to self-identify. The final Section 503 rule requires contractors to invite applicants to self-identify as individuals with disabilities (IWDs) at both the pre-offer and post-offer phases of the application process. It also requires that contractors invite their incumbent employees to self-identify as IWDs every five years. All invitations must use the standardized form prescribed by the OFCCP.
The final VEVRAA rule requires that contractors invite applicants to self-identify as protected veterans at both the pre-offer and post-offer phases of the application process. At the pre-offer stage, contractors must extend an invitation to self-identify generally as a “protected veteran.” At the post-offer stage, contractors must extend an invitation to self-identify as to the specific veteran category(ies) that contractors are required to report on in the VETS-100A form. Appendix B of the VEVRAA final rule includes sample invitations to self-identify (for both the pre-offer and post-offer stages) that contractors may use.
Required VEVRAA format/Section 503 form. The OFCCP submitted its proposed paperwork requirements for both rules to the OMB on September 24, 2013. In comments submitted to OMB, many contractors and employer groups expressed concern that the proposed version of the prescribed disability self-identification form could be confusing to workers, failed to completely define the term “disability,” and conflicted with some provisions of the upcoming regulations. OFCCP Branch Chief of Policy Naomi Levin noted in a January 16, 2014 webinar that the finalized version of the form has been revised from the proposed version in light of stakeholder comments.
Contractors can provide the form electronically, advised Senior Labor Department Attorney Jessica Lyn during the webinar, if the electronic form meets certain requirements. These requirements, which are specified in one of the OFCCP’s FAQs on the rule, are that the e-form must:
- Display the OMB number and expiration date;
- Contain the text of the form without alteration;
- Use a sans-serif font, such as Calibri or Arial; and
- Use at least 11-pitch for font size (with the exception of the footnote and burden statement, which must be at least 10-pitch in size).
Unlike the requirements of the Section 503 final rule, contractors are not required to use any specific form for the VEVRAA invitations. Nevertheless, contractors that do not use the sample forms provided in Appendix B of the VEVRAA rule must still ensure that the format they use meets the criteria provided in the VEVRAA rule.
The OMB approval of paperwork requirements for both rules will expire on January 31, 2017.
The supporting statement, supplementary document, and public comments regarding the VEVRAA paperwork requirements are available at: http://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=201307-1250-002.
The supporting statement, supplementary document, and public comments regarding the Section 503 paperwork requirements are available at: http://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=201307-1250-001.
*Update: As of January 27, 2014, the OFCCP has the form posted on its website at: http://www.dol.gov/ofccp/regs/compliance/sec503/SelfId_Disability_CC_305_012214_JRF_QA_508c.pdf.
We all know the mantra: “It shall be an unlawful employment practice for an employer … 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.” Although it does not protect against bias based on sexual orientation, several courts have held that this language prohibits discrimination against an employee because the employee does not conform to traditional gender norms. For example, assertive behavior on the part of a woman might be judged more critically because aggressive conduct is commonly viewed as a masculine characteristic or a female might be penalized for her “unladylike” language.
Two recent court decisions should serve as reminders that while sexual orientation is not a protected class under Title VII, discrimination on the basis of an employee’s failure to conform to expected gender stereotypes may land an employer in court.
Manly-men don’t play golf
In the first case, a Ford assembly line employee did not fit in with the stereotypical male worker on a plant assembly line. Unlike other workers, he did not drink, do drugs, or swear around women. In addition to being passionate about golf — a sport one group leader repeatedly called a “sissy’s game” — he did not engage in activities traditionally considered to be “manly” like hunting or fishing. And, he wore clothes that looked “like what girls would wear.”
Harassment. The employee contended that he faced harassment, discrimination, and ultimately termination because his coworkers perceived that he failed to conform to the male stereotype. They told him that he “did the queerest things” and asked why he couldn’t “just work and be like normal people.” Beginning in early 2010, the employee alleged that he was the victim of coworker sexual harassment. For instance, his group leader purportedly sent him two text messages. The first stated: “Found the candy you like for Valentines. But can’t remember if you like white or dark chocolate.” A picture of two chocolate cake pops shaped like penises was attached. The second contained a graphic depicting Elmer Fudd sodomizing Bugs Bunny. Another group leader gave him a five gallon container of Vaseline, telling him “Cappy you need this Vaseline for your ass since you take cock there all the time.”
On another occasion, his coworkers allegedly put grease and dirt on his chair; when he sat in the mixture and stained his pants, they kept track of votes on the substance’s identity with a whiteboard delineating the options of “dirt, grease or cum.” In addition, one of the group leaders would walk past the employee simulating “sucking a cock.” On another occasion, when denied an emergency bathroom break, he urinated in his pants. His group leader then told other workers that the employee “was like a little baby” and “pissed [his] pants.” Sometime after this incident, he was placed on a “no work available” list. He was ultimately terminated in December 2010 when his supervisor noticed that he had a black bag with a bottle full of urine. The employee had carried it into the plant because he urinated during his commute and did not want it to freeze.
Hostile work environment because of sex. The employee sued Ford and the two group leaders alleging that they harassed and discriminated against him on the basis of sex, retaliated against him by firing him, and caused him emotional distress. Noting that a plaintiff hoping to succeed on a claim of sex stereotyping must show that he fails to act and/or identify with his or her gender, a federal district court in Ohio pointed out that the Sixth Circuit has recognized that this theory of sex stereotyping will succeed “where gender non-conformance is demonstrable through the plaintiff’s appearance or behavior.”
Here, there was evidence supporting the conclusion that both his appearance and behavior put him outside of a “manly-man stereotype,” the norm in the world of Ford’s Ohio assembly plant production line. Not only did he wear feminine clothing, while dressed in his work apron, he pretended to be pregnant and to rock a fake baby. He also contended that his past career in management and his practice of keeping detailed notes about his activities at work also comprised behavior that placed him outside of the expected male norm at the Ford plant. He further asserted that the group leaders and other coworkers harassed him repeatedly, called him “queer,” and inundated him with sexual comments, gestures, and pranks.
Though Ford argued that the majority of the alleged behavior was “indisputably asexual” and “objectively harmless,” the court disagreed. When taken as a whole, the evidence could support a finding that the defendants’ actions created a hostile work environment. The vulgar acts mimed toward the employee; threats made while he faced harassment about needing Vaseline for anal sex; crude text messages; catalogues of women’s clothing and lingerie left for him; and a sexually-explicit wooden box that could be interpreted to suggest he should give (or gave) fellatio in the area near his workspace all could support the conclusion that the work environment was hostile or abusive.
Pretext. Ford claimed that it had a legitimate reason for firing the employee: he brought the bottle of urine into the plant and placed it in a barrel of gloves and he had a company owned keyboard in his locker. The employee, however, claimed that he properly disposed of the urine in the bathroom. Moreover, there was evidence that the gloves, which were supposedly soaked in urine, were never tested. In addition, while there was no evidence as to whether the gloves were intended to be recycled or thrown out, there was other garbage in the barrel, including food. Nor, the court pointed out, was there any rule against bringing a bottle of urine into the workplace or disposing of it in the bathroom. Finally, there was evidence that another employee who had urinated on company property was suspended, not discharged. As to the keyboard, there was no evidence that it was actually company-owned. Observing that the employee presented sufficient evidence of pretext, the court found that the defendants were not entitled to summary judgment as to this claim.
Liability. The court also rejected Ford’s assertion that it was not responsible for the coworkers’ harassment because it had no notice of their conduct. Here, there was evidence that the employee reported the conduct on more than one occasion. Not only did he tell his supervisor that he was scared of his coworkers’ actions, he also told him his coworkers were subjecting him to sexual innuendo, ridicule, and harassment. Thus, the employee was allowed to proceed to trial on his claim that he was discriminated against because he did not conform to (or was perceived as not conforming to) the stereotypical expectations and images of masculinity. Ford was also denied its motion for summary judgment on the employee’s retaliation claim related to sex discrimination as well as his intentional infliction of emotional distress claim.
How women should look and act
Three weeks later, a federal district court in Pennsylvania found that an openly gay female officer, who alleged that her female supervisor harassed her because her outward exhibition of sexual conduct did not conform to how a woman should look in the workplace or act in her private life, stated a plausible claim of a sexually hostile work environment.
Harassment. The officer began working for the Philadelphia Prison System (PPS) in July 2001, eventually rising to the rank of correctional sergeant. She began to receive harassing comments from her female supervisor, allegedly focusing on her perceived lack of femininity, outward signs that she had engaged in sexual conduct, and her sexual orientation. For instance, on one occasion, the supervisor thought the employee had recently had sex due to her disheveled hair and a mark on her neck, which the supervisor believed was a “passion mark.” The supervisor then shared her observations with other supervisors and coworkers, pointing out her “passion mark” to a captain and loudly asking if her hair was “messed up” because she “was getting some before she came to work.”
Several weeks later, the supervisor began to scream at her in front of coworkers and other supervisors. During the rant, she referenced the officer’s sexual preferences in a threatening manner. The supervisor also encouraged coworkers and subordinates to ignore and disobey the employee’s orders and gave her a negative performance review. When she complained to a superior, she was told “if you don’t like it, you can leave.”
Although the employee filed an EEOC charge alleging gender bias and a hostile work environment, PPS investigated and found the employee’s allegations against her supervisor to be unfounded. The supervisor then increased her harassment, allegedly telling the employee that she “could be messed with and nothing will happen.” The employee was subsequently transferred to a different facility with poorer conditions, fewer responsibilities, and fewer hours.
Non-conformance with gender stereotype. Denying dismissal of the employee’s HWE claim, the court first rejected the employer’s contention that she failed to show the alleged harassment was based on sex. Although sexual orientation is not a protected class under Title VII, discrimination on the basis of an employee’s failure to conform to expected gender stereotypes is sex discrimination, the court stated. Here, the employee sufficiently alleged that her supervisor discriminated against her on the basis of her failure to conform to expected gender stereotypes.
Specifically, the supervisor’s alleged harassment focused on her appearance — the signs of sexual conduct that the supervisor believed she exhibited. Thus, while the supervisor made harassing comments throughout 2011 and 2012 to other supervisors and coworkers, she did not make similar comments about women who conformed to her expectations of a female. Because the employee contended she was harassed due to her outwardly sexual conduct, which did not meet her supervisor’s expectation of how a woman should look in the workplace or act in her private life, she sufficiently alleged that she suffered discrimination based on sex. The mere possibility that the harassment was instead motivated by her sexual orientation did not warrant dismissal at this stage of the litigation, the court stated.
State laws. While sexual orientation is not a protected class under Title VII, sexual harassment is not acceptable conduct. Workplace harassment can lead to financial liability for an employer, cause loss of productivity in the workplace, and lead to poor employee morale. Therefore, employers should do everything possible to prevent harassment from occurring. It is also important to keep in mind that many states have either included a prohibition on employment discrimination because of sexual orientation in their fair employment practices laws or have passed separate laws. Some state laws cover employers with as few as one employee. In addition, state tort actions may also be used to redress adverse action based on sexual orientation.
By Lisa Milam-Perez, J.D.
In a noteworthy development on the intern wage suits front, a federal district court in New York has granted preliminary approval to a settlement reached in a suit brought by unpaid interns of a premier modeling agency who contended they should have been paid for their work as statutory employees under the FLSA and state law. The agency will dole out $450,000 to resolve the interns’ wage claims, marking the second significant recovery by unpaid interns since the wage-hour litigation trend took off two years ago. (Last June, a New York state judge gave the final sign-off on a $250,000 settlement resolving a suit brought by unpaid interns of PBS’ Charlie Rose show.)
A $50 million class action. In what originated as a $50 million class action against Elite Model Management Corp., the interns alleged willful violations of the minimum wage and overtime requirements of the FLSA and New York Labor Law. They also asserted a spread-of-hours claim under state law and contended they were entitled to incidental expenses they incurred in carrying out their duties. “Elite has for years boosted its bottom line on the backs of young interns, who while anxious to build their resumes, are too afraid to ask for compensation and/or are unaware of the wage laws’ requirements,” according to the amended complaint. “The self-proclaimed ‘world’s most prestigious’ modeling agency knows better, however.”
The interns asserted that Elite deliberately misclassified them as interns, or “trainees” in FLSA parlance, exempt from statutory wage requirements, in order to avoid paying them for their considerable efforts. The named plaintiff, who was hired to assist in preparing for and participating in New York’s fall 2010 “Fashion Week,” organized model portfolios and office files; prepared modeling books; picked up models from their homes or hotels and escorted them to and from bookings or on shopping errands to buy clothes; organized clothes, shoes and accessories for the models’ use; cleaned and organized office space, including wiping down closet drawers; and ran errands for paid staff, buying them coffee and picking up printing supplies. Such an “internship,” the complaint asserted, “fits the classic definition of what a paid employee does.”
The casting agent who oversaw the interns made it clear they were “indispensable” to the agency’s business and that Elite expected them to be available 24-7 to perform their assigned duties. As such, they worked in excess of 40 hours a week and more than 10 hours a day, and contended they were expected to do “productive work” every hour they were on the job. According to the complaint, Elite ramped up its internship program ahead of Fashion Week, commensurate with the agency’s increased need for their services. “Without the free labor of its interns,” the complaint asserted, “Elite would have been forced to do what every other reputable employer in this country does: pay workers an honest day’s wage for an honest day’s work.”
In fact, “Elite is so stingy,” the complaint charged, “that it doesn’t even reimburse its interns for their out-of-pocket expenses including cabs and subway fare spent taking Elite’s models to their modeling assignments. Thus, not only does Elite expect its unpaid interns to work for free, it expects its interns to cover Elite’s incidental operating expenses.”
Asserting that her fellow interns suffered a similar fate, the named plaintiff brought putative class and collective claims on their behalf as well, seeking damages of at least $50 million for unpaid wages, overtime and benefits. She also sought punitive damages and injunctive relief enjoining Elite from continuing the practice of misclassifying its interns as trainees.
Settlement approved. Pursuant to the settlement, Elite agreed to pay a maximum settlement amount of $450,000, which covers payments to class members, administration costs, service awards, and attorneys’ fees and expenses. The settlement provides for a NYLL class of individuals who served as unpaid interns for Elite (or an Elite subsidiary) in New York, and a second FLSA class comprised of all other individuals who served as unpaid interns for Elite or any Elite subsidiary in the country between February 2010 and the date of preliminary approval of the settlement. There are approximately 123 class members. The payout for each individual claimant will be based on the number of weeks worked, based on a minimum of four weeks, up to a maximum of 10 weeks (and a maximum individual recovery of $1,751.61). In exchange, the interns must release all related claims against the agency. Elite denied the complaint allegations and admitted no liability.
The parties had disputed whether the unpaid interns were entitled to compensation under the FLSA and NYLL, the number of hours they worked, and the amount they would have been entitled to receive absent the settlement. Finding the settlement constituted a compromise of a disputed claim, that it was fundamentally fair, adequate, “within the range of possible final settlement approval,” and the result of extensive, arm’s length negotiations, the court granted preliminary approval. A final approval hearing is scheduled for May 1, 2014.
All eyes on Second Circuit. New York is the epicenter of these intern wage suits, and the Second Circuit is poised to consider two such cases handed down by federal judges in the state. The appeals court has been asked to resolve an intra-district conflict over the standard for courts to use in deciding whether unpaid interns are statutory employees. One federal judge held that production interns for Fox Searchlight Pictures were statutory employees, not “trainees.” Another judge in the circuit ruled to the contrary in a suit against Hearst Corp. The judge in that case applied a “totality of the circumstances” approach to the question of employee status, including an analysis of which party was the primary beneficiary of the relationship. Both decisions have been certified for immediate appeal. Several more intern suits have been filed in the district since; currently there are more than a dozen pending cases in New York alone.
Given that these intern suits are invariably brought as class actions, and by particularly sympathetic plaintiffs—typically college students and recent graduates desperate for a leg up—employers throughout the country should be watching the Second Circuit closely, and scrutinizing their own internship programs to ensure they are legally compliant.