Academic journal article Iowa Law Review

Whaling on Walling: A Uniform Approach to Determining Whether Interns Are "Employees" under the Fair Labor Standards Act

Academic journal article Iowa Law Review

Whaling on Walling: A Uniform Approach to Determining Whether Interns Are "Employees" under the Fair Labor Standards Act

Article excerpt

I. INTRODUCTION

Under the Fair Labor Standards Act ("FLSA"), employees are guaranteed a minimum wage for their work.1 However, the FLSA provides virtually no guidance for determining who constitutes an employee entitled to minimum wage compensation.2 The United States Supreme Court shed light on the FLSA's definition of "employee" only once, in Walling v. Portland Terminal Co., in 1947.3 Since then, various circuit courts have interpreted the Walling opinion and the trainee exception that it created to the FLSA.4 These attempts have produced varying and inconsistent tests by which the courts determine whether a worker is an "employee" or a trainee.5

Recently, the focus of these cases has shifted to the ever-popular unpaid internship.6 Internships provide invaluable experience for students entering the workforce.7 Further, it has become increasingly difficult for students to gain post-graduation employment in today's job market without internship experience in a given industry.8 However, with circuit courts using varying tests to determine employee status,9 it has proven difficult for employers to know whether their interns are covered by the FLSA, and consequently, whether they must receive pay in conformance with the FLSA's minimum wage requirement.10 As unpaid internship litigation grows,11 employers may become reluctant to offer internship opportunities for fear of lawsuits and liability for minimum wage back pay.12 As a result, students seeking these opportunities, and subsequent employment, may be hard-pressed to find these much needed internships.13

This Note argues that it is critical for both employers and interns to have a clarifying, uniform test by which to determine the employee versus trainee distinction created in Walling. Part II examines Walling's trainee exception and the factors the Court used in creating it. Part II further analyzes various circuit courts' interpretations of these factors and their attempts to distinguish between employees and trainees. Part III then analyzes the recent and most prominent unpaid internship case, Glatt v. Fox Searchlight Pictures Inc.,14 and proceeds to discuss the problems flowing from the inconsistent standards used to determine who constitutes an employee under the FLSA. Part IV finally argues for a uniform, totality of the circumstances approach, as this approach is most consistent with the Supreme Court's Walling decision and will have the most beneficial effects on both employers and interns.

II. THE FAIR LABOR STANDARDS ACT: WHO CONSTITUTES AN "EMPLOYEE"?

The FLSA requires all employers to pay their employees a minimum wage.15 This minimum wage requirement applies to every employment relationship where the worker falls under the FLSA's definition of "employee."16 Once it is established that an employment relationship exists between an employer and employee,17 the FLSA's requirements apply to that relationship and are enforced by the Department of Labor ("DOL").18 The DOL enforces the FLSA by conducting workplace investigations to ensure that employers are complying with its requirements.19 Through an investigation, if an employer is found to be in violation of the FLSA, the DOL "may recommend changes in employment practices to bring an employer into compliance."20 Beyond having to implement these changes, a violating employer may be required to pay back wages to employees as compensation for the work they performed during the relevant period.21

Since an employer is subject to the DOL's enforcement of the FLSA, and since the obligation to pay minimum wage hinges on whether a worker falls under the FLSA's definition of "employee," it is essential that an employer knows whether it is truly "employing" an "employee" under the FLSA. However, as this Note addresses, the statutory definition of "employee" is of little help in determining whether or not one is, in fact, an employee under the FLSA. The FLSA simply provides: an "employee means any individual employed by an employer. …

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