This blog has explained that the Fair Labor Standards Act does not expressly authorize unpaid interns, and the viability of unpaid internships is generally assessed through the FLSA’s definition of an unpaid “trainee.” Application of this trainee test to various interns and volunteers is often murky and inconsistent. In a new decision deftly navigating this difficult analysis, Southern District of New York Judge Paul Crotty ruled in favor of the City of New York’s Department of Education, holding that a former student turned volunteer at Bronx high school Banana Kelly was not entitled to minimum wage as a “employee.” Brown v. New York City Dep’t of Educ., 2012 U.S. Dist. LEXIS 176212 (S.D.N.Y. Dec. 12, 2012).

In Brown, plaintiff, a 2006 graduate of a high school which shared space with Banana Kelly who had retained ties with the school after graduation, expressed an interest in mentoring students and volunteering his time. Brown further hoped to cultivate his resume and potentially seek a paid position within the school or elsewhere. However, when he began providing services, he did not, the Court found, have an expectation of compensation. Brown’s relationship with the school persisted for a number of years in this unpaid capacity, though he from time to time received subway fares and petty cash. He also was informed that at certain point the school was seeking grant funding which might provide a stipend for him and others providing similar services, which included administrative services, assisting with conflict resolution with students, mentoring and providing classroom coverage for teachers, and hallway monitoring. 

Judge Crotty analyzed Brown’s relationship with Banana Kelly under what the Judge viewed as Plaintiff’s clear “mixed motive” of: 1) his humanitarian motivation to make the school a better place (consistent with volunteer unpaid status); and 2) the generalized hope that the services would result in remuneration in the future. Ultimately, the Court was persuaded that Brown’s original humanitarian motivation, supporting volunteer status, was not undermined by any generalized hope of compensation. The court further found that the money Brown did receive was not “offered as an under the table inducement to coerce or compel Brown to work for the purpose of avoiding minimum wage laws” and also noted that there was no “evidence that he was ‘promised’ compensation.” Ultimately, the court concluded that Brown “did not have a reasonable expectation of compensation.” 

This analysis, especially for private sector for-profit employers, should be conducted with counsel to minimize potential liability.