Lousy Internship Experience Does Not Convert It Into Paid Work

by Parker Poe Adams & Bernstein LLP
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Parker Poe Adams & Bernstein LLP

In recent years, a number of companies have faced lawsuits from unpaid interns who claim that they should have been compensated for their work. The Department of Labor considers internships to be subject to federal minimum wage and overtime requirements unless the company demonstrates that the position meets the test for unpaid work. This test looks at a number of factors, including whether the experience is similar to that in an educational environment, whether the intern receives the primary benefit from the experience, and whether the intern’s work displaces that otherwise performed by employees. Last week in an unpublished decision, the Second Circuit Court of Appeals rejected a claim from an intern who alleged that she was misled with regard to the actual work experience provided by the company.

In Sandler v. Benden, the plaintiff was a student in a Master of Social Work program who accepted an internship with a retirement facility. She claimed that the internship primarily consisted of secretarial and other clerical work. After she complained about the quality of the internship experience, the plaintiff alleged that she was dismissed and received no course credit for her work. She sued the retirement facility and her supervisor there, claiming entitlement to pay for the duration of the internship.

The Second Circuit affirmed dismissal of the claims. Based on the totality of the circumstances, the court concluded that the defendant met the test for unpaid internships. The internship arose from a degree requirement for the plaintiff, and there was no expectation of compensation. The court found that despite her dissatisfaction with the experience, the plaintiff completed required course work as part of the internship and would have received academic credit had she completed the experience. While the plaintiff did perform some secretarial work, this was not dispositive due to the defendant’s demonstration of the other factors of the test.

Most internships cannot exactly replicate an academic atmosphere. To provide any useful experience to the intern, they need to understand how the job works through actual performance in some capacity. This case demonstrates that incorporating such work will not convert the internship into paid work if the sponsor can demonstrate that the overall program is intended to primarily benefit the intern and his or her academic progress.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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