Skip to main content

The Experience Really Is Invaluable: Working an Unpaid Externship & FLSA Claims For Minimum Wage


Kaplan v. Code Blue Billing & Coding, Inc. - Eleventh Circuit Court of Appeals


Facts:  Plaintiffs were enrolled as students in MedVance Institute's Medical Billing and Coding Specialist program.  To graduate, MedVance required all students complete an externship program.  Plaintiffs completed their externship at Code Blue Billing & Coding, Inc., Magnetic Medical Management, Inc., and East Florida Eye Institute, P.A.  Plaintiffs did not expect nor receive payment for the work they performed.

After completing their externships, Plaintiffs filed a complaint for minimum wage under the Fair Labor Standards Act (FLSA) for work performed during their externship.  Plaintiffs argued they received very little educational benefit from their externships and instead had conferred economic benefit on Defendants.  As a result, Plaintiffs alleged they were "employees" under the FLSA and were entitled to minimum wage.

The trial court granted Defendants' motion for summary judgment holding the Plaintiffs were not "employees" under the FLSA.  The Eleventh Circuit Court of Appeals affirmed.

Holding:  In determining whether an employer-employee relationship exists under the FLSA, the "economic realities" of the relationship, including whether a person's work confers an economic benefit on the entity, must be considered.  When a person works for his own advantage or personal purpose, however, he is not an "employee" under the FLSA.  The Court reasoned that Plaintiffs participated in the externship for their own benefit as Plaintiffs engaged in hands on work to satisfy degree requirements, and upon completion of the externship, they were eligible to earn their degree.  Plaintiffs argued that because of their work, Defendants benefited economically.  However, the Court noted that while Plaintiffs were engaged in their externship, Defendants' staff spent time away from their regular duties to supervise and review Plaintiffs' work.  The Court also held that Plaintiffs externship caused Defendants' businesses to run less efficiently.  Consequently, Defendants received little if any economic benefit from Plaintiffs' work.  As a result, under the "economic realities" test, Plaintiffs were not employees within the meaning of the FLSA and therefore not entitled to minimum wage for their work.

The Court also relied upon guidance from the Department of Labor's Wage and Hour Administrator which set forth six factors to be used to determine whether a trainee qualifies as an employee under the FLSA.  McLaughlin v. Ensley, 877 F.2d 1207 (4th Cir. 1998).  Based upon these six factors, the Court held that Plaintiffs again failed to establish that they were employees under the FLSA and therefore the lower court's granting of summary judgment for Defendants was proper.

Judgment: The Eleventh Circuit Court of Appeals affirmed the trial court's grant of summary judgment in favor of Defendants.

Majority Opinion Judge:  Per Curiam

Date:  January 22, 2013

Opinion:  http://www.ca11.uscourts.gov/unpub/ops/201212011.pdf

Comments

Post a Comment

Popular posts from this blog

NLRB: Discussion Among Employees About Tip Pooling is Protected Concerted Activity

  This Advice Memorandum from the National Labor Relations Board’s Associate General Counsel, Jayme Sophir, addressed whether employees which discussed and complained about tip pooling at work constituted protected concerted activity. In relevant part, an employer in New York operated a chain of steakhouses.  While tip pooling was in place at these steakhouses, some of the employees objected to it on the grounds that it was not transparent and improperly divided tips among the workers.  Employees were told not to complain or talk to each other about the tip pool and were told that doing so would endanger their jobs.  Despite the employer later attempting to provide some clarity as to how the tips were being divided, rancor still existed among some employees.  At one point, the employees were told by a general manager that some employees that had been talking about the tip pool were “cleared out” and the employer would continue to do so. In the Advice Memorandum,...
Post a Comment
Read more

Breaking: Labor Secretary Rumored to Be Leaving Administration

A few hours ago, word leaked out that Labor Secretary Marty Walsh (“Walsh”) is in the midst of negotiations to head up the NHL Players Union and leave his position at the Labor Department. Walsh, who has served as the sole Labor Secretary under President Biden, has taken part in a labor renaissance of sorts as support for organized labor has increased during his term as Labor Secretary (although the number of workers that have joined a union over the past two years has not grown as mush as some expected.)  He has also overseen the ongoing negotiations with rail workers over a new contract, although that matter is still on shaky ground and playing out as we speak. As for who might step into the vacant Labor Secretary role, there are already rumblings that President Biden should nominate Deputy Labor Secretary Julie Su (a strong labor advocate) or even a progressive like Senator Bernie Sanders.  Until Walsh officially gives his notice, however, I would expect some/many potential...
Post a Comment
Read more

San Diego Rolls Back Vaccine Mandate For City Workers

Last Tuesday, the San Diego City Council voted to do away with the vaccine mandate for city employees. The city’s vaccine mandate that was in place required city workers to get the coronavirus vaccine or risk termination.  Perhaps to this surprise of no one, the city’s policy came under fire with 14 employees being terminated and over 100 other employees resigning.  With the coronavirus subsiding, including in Southern California, the San Diego City Council took action. Now, bear in mind, the repeal of the vaccine mandate does not take place immediately. With that being said, the mandate will be repealed March 8th.  I suppose the question now is, what other cities or regions follow San Diego’s lead? For additional information:   https://www.sandiegouniontribune.com/news/politics/story/2023-01-24/san-diego-repeals-controversial-covid-19-vaccine-mandate-citing-drop-in-cases-hospitalizations
Post a Comment
Read more