Second Circuit Develops “Primary Beneficiary” Test to Evaluate Unpaid Internships

Pillsbury attorneys Julia Judish and Osama Hamady recently published their client alert titled Second Circuit Develops “Primary Beneficiary” Test to Evaluate Unpaid Internships. The Alert discusses the Court of Appeals for the Second Circuit’s adoption of a “primary beneficiary” test for evaluating whether unpaid interns are employees for purposes of the Fair Labor Standards Act (FLSA). Rejecting a six-factor test that the U.S. Department of Labor has used for over forty-five years, the Second Circuit, in held “the proper question is whether the intern or the employer is the primary beneficiary of the relationship.” The Second Circuit’s decision in Glatt, et al., v. Fox Searchlight Pictures, Inc., et al., Case Nos.13-4478-cv, 13-4481-cv, decided on July 2, 2015, vacated a district court judgment that two interns on the movie Black Swan had been improperly classified as unpaid interns rather than employees. The Second Circuit also held that, under the “primary beneficiary” standard, “the question of an intern’s employment status is a highly individualized inquiry,” and therefore vacated the district court’s orders conditionally certifying a nationwide FLSA collective action and certifying a class of New York interns.