Intern or Employee? Don’t Find Out the Hard Way

Unpaid internships have become a prevailing part of the corporate landscape.  They serve as a means for students and recent graduates to gain experience in their chosen fields and give businesses the opportunity to develop relationships with new talent.  What many do not realize, though, is that the intern-business relationship is governed by a network of state and federal laws that, if ignored, can lead to very expensive consequences.

Recently, Fox Searchlight Pictures, P. Diddy’s Bad Boy Entertainment, The Hearst Corporation, Condé Nast, and other businesses have been forced to grapple with the effects of such laws.  Each of these companies has been sued by former unpaid interns who contend that they are entitled to back wages and benefits because of the nature of the work performed.  NBCUniversal is one of the most recent high-profile targets, and recently filed a response in a class action suit that may end up costing the company a tremendous amount of money.

In their suit, former NBC interns Jesse Moore and Monet Eliastam claim that NBC violated portions of the Fair Labor Standards Act and several state regulations in failing to pay wages for kinds of work that must be compensated under the law.  The Department of Labor has stated that interns may only work without pay in certain situations, and the NBC interns argue that because their work at the company does not fall within the protected categories, they are entitled to back pay.

The NBC suit and others like it have touched off a firestorm in the business community, with some calling out for better treatment and fair compensation for under-advantaged interns, while others argue that businesses should jettison their intern programs altogether to avoid potential liability.  One thing is certain: the issues raised in the intern lawsuits are not going away ‒ Fox lost during the first stage of its lawsuit and now has an appeal pending, other companies have settled, and the trend in intern lawsuit filings shows no signs of slowing.  In the end, these stories highlight how important it is for business owners to understand the laws that govern the business-intern relationship; when it comes to interns, it is definitely better to be safe than sorry.

Ryen Rasmus is an associate attorney for the Washington, DC regional business law firm Berenzweig Leonard, LLP.  He can be reached at RRasmus@BerenzweigLaw.com.

Is It Negligent for a Company to Hire Someone Who Turns Out to be a Thief?

An administrator for a Vienna law firm was accused of stealing over half a million dollars from a client.  The client had hired the law firm to pursue a specific type of immigration visa that entailed making a commercial investment of $500,000.  The employee directed the client to deposit this money in a bank account that he controlled, and the employee later absconded with the money instead of using it for the client’s visa process. The employee fled overseas and faces criminal prosecution.

The client sued the law firm over the stolen funds, alleging among other legal claims that the law firm was negligent in hiring the administrator in the first place.  The client claimed that if the law firm had done the appropriate background check on the employee prior to hiring him, it would have discovered that he and his family had several unsatisfied monetary judgments against them.  Therefore, the employee should not have been entrusted with a position that entailed handling large sums of client money and the law firm was negligent in bringing him on board.  The law firm countered that it had no reason to suspect that the employee would end up being a thief, and therefore, the firm was not negligent in hiring him.

A federal judge in Alexandria recently dismissed the client’s negligent hiring claim against the law firm.  The judge stated that, in Virginia, the test for negligent hiring is whether the employee has negligently placed an unfit person in an employment situation that could cause unreasonable risk of harm to others.  The judge concluded that even if the administrator had money troubles in his past, causing financial harm to others is not enough to raise a claim for negligent hiring.  There must be actual physical injuries inflicted by an employee before an employer can be held liable for negligent hiring.  It should be noted that the client made several other legal claims against the law firm related to the theft, and some of those claims are still pending.

Declan Leonard is managing partner of the Washington, DC regional business law firm Berenzweig Leonard, LLP. He can be reached at DLeonard@BerenzweigLaw.com.  

How do Courts Determine Enforcement of a Non-Compete?

The Virginia Supreme Court recently addressed this issue in an interesting non-compete case that arose in Fairfax County.  The non-compete agreement that an employee signed with a computer company prohibited him from engaging in certain competitive actions for “twelve (12) after the date of termination.”  Based on other language in the contract, it appears the employer intended it to run for 12 months after termination, but the word “months” was not included in the version the employee signed.

When the employee left the computer company to work for an alleged competitor, the company sued the employee in Virginia state court for violation of the non-compete.  Rather than answer the lawsuit on the merits, the former employee asked the state court to dismiss the case on the ground that the non-compete was unenforceable because, among other reasons, there was missing language regarding duration.   The company argued that it was premature to dismiss the case without  first giving the company a chance to present evidence against the employee for violating the non-compete.

Although the employee was successful in getting the case dismissed at the state trial court level, the Virginia Supreme Court recently reversed that decision and held that non-compete cases should not be dismissed early on in litigation based solely on the language of the provision at issue, without giving the employer an opportunity to present evidence on the alleged violation.  In one notable quote, the Virginia Supreme Court stated that “an employer may prove a seemingly overbroad restraint to be reasonable under the particular circumstances of the case.”

This decision by the Virginia Supreme Court has garnered much attention. Up until this point, the generally accepted view was that courts would first look at the language of a non-compete provision to make sure that as written the provision was enforceable, and only then would the court delve into the underlying factual issues in the case.  But with this decision, the Virginia Supreme Court appears to be instructing that when determining enforceability, courts in Virginia should employ a more blended analysis that looks not only at the language of the non-compete, but also factual evidence offered by the employer in support of its case. Such cases are therefore less likely to be dismissed early.

Declan Leonard is managing partner of the Washington, DC regional business law firm Berenzweig Leonard, LLP. He can be reached at DLeonard@BerenzweigLaw.com.  

How Important Is It To Stay Awake At Work?

A manufacturing engineer employee for a Roanoke lighting company suffered from sleep deprivation caused by his fibromyalgia, and would periodically fall asleep while on the job.  In response to counseling by his employer that it would not tolerate his sleeping on the job, the engineer told his supervisor that he could ably perform his job if the company accommodated him by waking him up when he fell asleep.  The next day the engineer again fell asleep on the job, and the company fired him.

The engineer sued his former employer under the Americans with Disabilities Act (ADA) on the basis that the company failed to accommodate his disability by not waking him up when he fell asleep at work.  The lighting company responded that staying awake on the job was an essential function of the engineer’s position, and asked the court to dismiss the case.

But a Roanoke federal judge denied the lighting company’s motion to dismiss, and allowed the engineer to proceed with his ADA claim.  The court recognized that it previously found in another case that an employee who could not stay awake at work would likely not qualify for ADA protection.  Nonetheless, the court was not willing in this case to find at the initial phase of the litigation that the engineer was unqualified for the position, even if he could not promise to always stay awake at work.

This case highlights the changes that occurred just a few years ago to the Americans with Disabilities Act, in which Congress made it much easier to qualify as disabled under the ADA.  The focus of the ADA since those amendments has been on the issue of whether a requested accommodation was reasonable.  One way for an employer to reject an accommodation is if the employee’s conduct presents a safety issue to either himself or to others in the workplace.  Perhaps the company can later argue that falling asleep in a manufacturing environment could cause harm to the sleeping employee or his co-workers, and therefore, is not accepted behavior in the workplace.

Declan Leonard is managing partner of the Washington, DC regional business law firm Berenzweig Leonard, LLP. He can be reached at DLeonard@BerenzweigLaw.com. http://www.BerenzweigLaw.com

Sexual Harassment of Female Employee Not Considered Severe Enough Under Title VII

A female employee of Staples in the Roanoke, Virginia area complained after a male co-worker on multiple occasions stripped down to his boxers and changed into his work uniform in front of her in the employee break room, rather than changing in the men’s bathroom.  Some of these changing incidents were witnessed by other Staples employees, both male and female. On the final occasion of witnessing the male employee changing, the female employee ran out of the break room crying while several male employees laughed at her reaction.

The female employee elevated her complaints to Staples human resources, and after the male employee was counseled, there were no further incidents of him changing in the employee break room.  But the female employee did experience some additional harassment following her complaint, including someone cutting up all of the family pictures on her desk, someone stealing her Bible and leaving only one page taped to her desk, and someone cutting the cord to the radio on which she was known to listen to Christian music.  The female employee strongly suspected that it was the male employee who committed these acts against her in retaliation for her complaints against him, but she was unable to prove it.

The female employee sought medical counseling for the stress and anxiety she experienced as a result of the workplace conditions at Staples, and was prescribed Prozac and other anti-anxiety medicine.  Eventually, she took disability leave and then resigned for what she described as her fear of the potential to experience more harassment while working at Staples.  She sued Staples for sexual harassment as well as religious discrimination, and after the close of written discovery and depositions, Staples asked the Court on summary judgment to rule in its favor as a matter of law and dismiss the female employee’s claims without going to trial.

A Roanoke federal judge ruled in favor of Staples and dismissed the female employee’s lawsuit on summary judgment prior to trial.  Without condoning what it called the male employee’s “immature” behavior, the judge noted that the male employee never got completely naked when changing, never made any sexual comments to the female employee when changing, and never physically touched her.  The Roanoke federal judge concluded that the changing incidents were not sufficiently severe and offensive to legally support the sexual harassment claim, such that in the Court’s mind no reasonable jury could conclude that the incidents were motivated by unlawful sexual harassment.  Likewise, the judge was not persuaded that the Bible stealing and radio cord-cutting incidents where pervasive enough to support a religious discrimination claim against Staples.

Declan Leonard is managing partner of the Washington, DC regional business law firm Berenzweig Leonard, LLP. He can be reached at DLeonard@BerenzweigLaw.com.

Understanding Workplace Pregnancy Leave for Moms and Dads

Yahoo has recently announced a new parental leave policy, in which both moms and dads will receive the same eight weeks of paid leave following the birth of a child, including through adoption.  But moms who give birth are given an additional eight weeks of paid leave following childbirth, while men and moms who adopt are not granted this additional eight weeks paid leave.

Some observers have questioned the propriety of Yahoo’s policy giving men the same eight weeks of paid leave that all women get, and also whether it is appropriate that women who give birth get twice as much leave as women who adopt.  But Yahoo’s new parental leave policy is lawful.

Despite the myriad of views on social norms, federal law requires that men and women receive the same amount of time off from work to bond with a new child.  The only instance in which the law allows a deviation between leave granted to a woman versus leave granted to a man for a new child is when the additional leave is directly linked to a woman’s recuperation from the physical effects of childbirth.  That is why it is permissible under federal law to give women who adopt less paid leave than women who give birth.
Therefore, companies should avoid using terms such as maternity and paternity leave, and instead should spell out new child leave policies using terms such as “parental leave” and “childbirth leave” to account for the distinction that federal law permits between the two.

Declan Leonard is managing partner of the Washington, DC regional business law firm Berenzweig Leonard, LLP. He can be reached at DLeonard@BerenzweigLaw.com.

Are Employee’s Social Media Discussions Protected?

As we’ve reported, the National Labor Relations Board (“NLRB”) continues to take an aggressive stance on regulating employment decisions based on employee social media postings. Contrary to the recent trend of broadly construing employee social media postings as covered under protected activity, the NLRB reversed course and recently ruled in favor of an employer after terminating an employee based upon what it believed was an improper Facebook group message post.

In the case, an employee worked at a small medical office performing various office duties for her employer. The employee at issue in the case, along with nine other individuals who were comprised of both former and current employees, took to a private group chat on Facebook to organize a social outing. After briefly planning the social event, the subject quickly changed after the employee mentioned that another former employee may be returning to the company as a supervisor. This led to the employee beginning an attack on her current supervisor claiming that her supervisor "tried to tell [her] something today and [she] said aren't you the supervisor for mind and body ... in other words back the freak off..." The employee’s rant did not stop there as she began using profanity and stated “FIRE ME …Make my day.” Other than one other current employee stating that the employee’s comments made her laugh, no other current employees took part in this part of the discussion.

To no surprise, one of the current employees on the group chat showed this discussion to their employer. The employer called the disgruntled employee’s bluff and ended up firing her as it was clear to the employer that she was no longer interested in working for the company.  The terminated employee responded by filing an NLRA charge against the company claiming that her Facebook comments constituted protected concerted activity.

The NLRB found that the employee’s conduct on the Facebook group message did not constitute protected activity as the postings did not involve shared employee concerns over terms and conditions ofemployment. The NLRB largely focused on the test for “concert” and whether the employee is engaged “in with or on the authority of other employees, and not solely by and on behalf of the employee himself.” Ultimately, the NLRB concluded that the terminated employee’s “comments merely expressed an individual gripe rather than any shared concerns about working conditions,” and therefore, the terminated employee’s charge should be dropped.

This is a big victory for employers as up until this opinion, the NLRB has continuously taken a very aggressive stance against employers on social media policies and terminations based on violations thereof. When making these termination decisions related to online postings, employers will want to consider what was said, by whom, and who responded in order to determine whether such conduct would be considered “protected concerted activity.” Though this opinion does give employers comfort if and when it decides to make a termination decision based on improper Facebook postings, it is always critical for you first to discuss these decisions with an experienced employment attorney.

The author, Nick Johnson, is an Associate Attorney with the DC region business law firm of Berenzweig Leonard, LLP. Nick can be reached at NJohnson@BerenzweigLaw.com.

National Origin Employment Discrimination Covers Europeans

Recently, a federal judge in Virginia was presented with the novel legal issue of whether someone of European descent is covered under the national origin protections of Title VII of the federal Civil Rights Act.

A Caucasian professor with a Ph.D. from Harvard applied for several different teaching positions at Northern Virginia Community College.  Each time a minority candidate was selected over him: first, a native of India; second, a native of Korea; third, a native of Senegal; and fourth, another native of India.  The community college said he was not selected for the positions because he did not provide enough evidence of outstanding teaching skills.  The professor countered by citing his prior teaching positions at Harvard, Georgetown, Johns Hopkins, and The Naval Academy.

The professor sued the community college for discrimination based on national origin, claiming that his European ancestry was viewed as a negative at Northern Virginia Community College where minorities make up the majority of the student body.  The community college countered that European does not constitute a protected national origin under federal discrimination law because there is such a variation of cultures among the countries of Europe.

A federal judge in Alexandria agreed with the professor that European is a protected class.  The court reasoned that despite differences from one country to the next, Europe has enough commonality in terms of people, culture and linguistics to make it an identifiable place of national origin.

This turned out to be a pyrrhic victory for the professor, however, because the court ultimately found against him on his substantive discrimination claim against Northern Virginia Community College.  The court concluded that despite his Ivy League credentials, the professor failed to provide enough peer references and prior teaching accolades compared with the candidates who were ultimately chosen over him.

Declan Leonard is managing partner of the Washington, DC regional business law firm Berenzweig Leonard, LLP. He can be reached at DLeonard@BerenzweigLaw.com.

House Bill if Passed Would Affirmatively Require Employers to Pay Employees for Jury Duty

On December 6, 2012, the Virginia House of Representatives introduced HB1368, which if passed will significantly change Virginia employment law. Currently, Virginia law does not require employers to pay employees for days missed due to jury duty, although employers are prohibited from requiring employees to use vacation or sick leave for jury duty, cannot take adverse employment action against employees for jury duty absences, and cannot require shift workers to start work within certain time periods following jury duty. Additionally, the Fair Labor Standards Act currently restricts employers’ ability to reduce certain salaried employees’ pay when they are serving on a jury.

The bill would require employers to pay employees their regular compensation and excuse employees from work for days that employees serve over 3 hours of jury duty. Also, employees must give notice to their immediate supervisor and provide a copy of the jury duty summons within one working day after receiving the summons. The bill prohibits employers from discharging or discriminating against employees for jury duty if the required notice was provided. Most importantly, employees who are discharged, demoted, or suspended in violation of the law may seek reinstatement and reimbursement for lost wages, benefits, attorneys’ fees and court costs.

Under current Virginia law and the proposed legislation, employers may deduct any compensation the employee receives for jury duty. The bill is currently before the House’s Commerce and Labor Committee.


Katie Lipp is an associate attorney for the Washington, DC regional business law firm Berenzweig Leonard, LLP. She can be reached at KLipp@BerenzweigLaw.com.