Columbus Employment Law Blog

The summer is a time when many students turn to a summer internship to further their career aspirations.  Many employers turn to an unpaid internship program in an effort to both allow students to gain valuable "real world" experience and permit employers to evaluate potential candidates for future positions.  However, even though they are attempting to help students, employers must be cautious that this attempt to help someone does not expose them to liability under the Fair Labor Standards Act (FLSA) or Ohio Minimum Wage law. 

The FLSA contains a broad definition of "employ" to include to "suffer or permit to work" making the FLSA requirements apply to most workers.  Covered and non-exempt individuals who are "suffered or permitted" to work must be compensated under the FLSA for the services they perform for an employer.  As an exception, the U.S. Supreme Court has held that the term "suffer or permit to work" cannot be interpreted to make a person whose work serves only his or her own interest be considered an employee of another who provides the aid or instruction.  Therefore, interns may not be considered as suffering or permitting to work and instead be considered a "trainee" under the Act.

The determination of whether an internship meets the trainee exclusion depends upon all of the facts and circumstances of each case.  The following six criteria must be applied when making the determination of whether someone qualifies as trainee:

(1) The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;

(2) The internship experience is for the benefit of the intern;

(3) The intern does not displace regular employees, but works under close supervision of existing staff;

(4) The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;

(5) The intern is not necessarily entitled to a job at the conclusion of the internship; and

(6) The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

With the notice posting requirement set to take effect on April 30, 2012, court decisions continue to emerge regarding the legality of the posting requirement.  On April 13, 2012, the United States District Court for the District of South Carolina held the National Labor Relations Board (NLRB) exceeded its authority in promulgating the notice posting requirement.  The district court granted summary judgment in favor of the U.S. Chamber of Commerce and South Carolina Chamber of Commerce by finding the NLRB violated the Administrative Procedure Act by putting the posting requirement into effect.  This posting requirement has and will continue to face legal challenges around the nation.

The South Carolina court found that the NLRB's notice posting requirement is entirely Board created, unlike other employer obligations under other statutes including Title VII of the Civil Rights Act, the Occupational Health and Safety Act (OSHA), or the Family and Medical Leave Act (FMLA), where congressional intent demonstrated an intent to notify employees of their rights. The court analyzed both Section 6 of the National Labor Relations Act (NLRA) and the NLRA structure, finding the notice posting requirement to be merely useful and only aid or further the goals and purpose of the NLRA, not necessary to reach the goals of the NLRA. The South Carolina district court found that if Congress intended for employers to notify employees of their rights under the NLRA, it could have included this requirement in either the NLRA or subsequent amendments.  Currently, such an amendment is unlikely considering the political makeup of Congress.

Section 6 of the NLRA confers the rulemaking authority to the NLRB. Section 6 specifically provides, "The Board shall have authority from time to time to make, amend, and rescind, in the manner prescribed by the Administrative Procedure Act, such rules and regulations as may be necessary to carry of the provisions of this Act."

Cases are emerging challenging whether President Barack Obama overstepped his constitutional authority when he relied on recess appointment powers to appoint three members to the National Labor Relations Board (NLRB).  After the 2011 U.S. Supreme Court holding in New Process Steel v. NLRB that two members are not enough for a NLRB quorum, these recess appointments are necessary in many cases to provide authority for the NLRB to act.  Obama appointed three members to the Board on January 4, 2012, bypassing Senate confirmation by claiming lawmakers were in recess and unable to advise and consent on the nominations.   Presidents are permitted to make appointments without Senate confirmation only during a recess.  The Obama Administration has claimed authority to make such appointments because they have found the Senate was on a 20-day recess, even though it has held periodic pro forma sessions in which no business is conducted.

A New York landlord has challenged the recess appointments arguing that the NRLB lacked standing to bring a federal case against Renaissance Equity Holdings, LLC in the U.S. District Court for the Eastern District of New York, Case No. 12-350, on the grounds that the Board lacked the necessary legal quorum to bring such actions.  In Paulsen v. Renaissance Equity Holdings, LLC, the Board's regional counsel has filed an action accusing Renaissance of unlawfully locking out union workers after failing to reach a new collective bargaining agreement.  In a hearing before the court on March 1, 2012, Renaissance argued that President Obama overstepped his recess appointment authority.  Although most of the Senate was not in Washington D.C. at the time, legislators held sessions that often included only a few members and lasted a couple minutes.  The argument contends that, despite these sessions, the Senate was not technically in recess at the time of the appointments.  In this case, however, the Court may not need to decide if the recess appointments were valid as the Board's lawyers have argued that no quorum was required because the Board previously delegated its authority to bring this type of case to its acting general counsel.

While the issue may not be decided by the Court in Renaissance, this is not the only case challenging the recess appointments.  On Feb. 13, 2012, a similar argument was cited in a motion to dismiss a petition in which the NLRB accuses another New York accused of firing five workers for seeking to unionize. On Feb. 23, 2012, an Illinois employer also raised the argument in its response to a petition in which the Board accuses it of moving work from the U.S. to Mexico after its employees went on strike.

 By: Justin A. Morocco

The United States District Court for the District of Columbia issued a decision today finding that the NLRB posting requirement provision deeming a failure to post an unfair labor practice (ULP) and tolling the statute of limitations in ULP actions against employers who fail to post violate the National Labor Relations Act (NLRA) and are invalid as a matter of law.

The decision was the result of two suits by the National Association of Manufacturers (NAM) and National Right to Work Legal Defense and Education Foundation (NRTW) that were consolidated.  The NAM and NRTW suits alleged that the Board's promulgation of the "Notification of Employee Rights Under the National Labor Relations Act" exceeded its authority under the NLRA in violation of the Administrative Procedure Act and violated the plaintiffs' First Amendment right to refrain from speaking.  The Court found that the promulgation of the posting requirement did not exceed its statutory authority for the provisions of Subpart A - the notice posting.  However, subpart B providing for penalties in the event of failing to post violated the NLRA as a matter of law.

United States District Judge Amy Berman Jackson, in granting in part plaintiffs motions for summary judgment, has provided a significant victory to employers seeking to restrain the recent expansions of power sought by the Board.  In addition to the posting provisions, new rules for speedy elections are set to take effect on May 1, 2012.  Employers should consult with their labor counsel in anticipation of these changes to review their current situations and plan accordingly for the future.

By: Justin A. Morocco