Legality of Internships

Here’s a statement, from The Unpaid Intern, Legal or Not in the 2 April 10 New York Times, whose truth is honored more in the breach than the observance:  “If you’re a for-profit employer or you want to pursue an internship with a for-profit employer, there aren’t going to be many circumstances where you can have an internship and not be paid and still be in compliance with the law.”

The U.S. Department of Labor’s Wage and Hour Division uses six criteria to classify a worker as a trainee (intern) or employee for the purposes of the Fair Labor Standards Act:

  • The training, even though it includes actual operation of the facilities of the employer, is similar to what would be given in a vocational school or academic educational instruction;
  • The training is for the benefit of the trainees;
  • The trainees do not displace regular employees, but work under their close observation;
  • The employer that provides the training derives no immediate advantage from the activities of the trainees, and on occasion the employer’s operations may actually be impeded;
  • The trainees are not necessarily entitled to a job at the conclusion of the training period; and
  • The employer and the trainees understand that the trainees are not entitled to wages for the time spent in training.

(emphasis supplied)  Why does it matter?  If the work relationship meets all of these criteria then the worker is a trainee. If the relationship fails to meet all these criteria then the worker is an employee entitled to receive minimum wage.  The article reports that federal and many state officials are investigating the legality of internships and fining employers  “but that it is unusually hard to mount a major enforcement effort because interns are often afraid to file complaints. Many fear they will become known as troublemakers in their chosen field, endangering their chances with a potential future employer.”

The linked Wage and Hour Division document explains some of the criteria.

  • Training Similar to Vocational School/The Primary Beneficiary of the Activity
    • In general, the more a training program is centered around a classroom or academy as opposed to the employer’s actual operations, the more likely the activity is training . . . [I]f the workers are engaged in the primary operations of the employer and are performing productive work (for example, filing, performing other clerical work, or assisting customers), then the fact that they may be receiving some benefits in the form of a new skill or improved work habits is unlikely to make them trainees given the benefits received by the employer.
  • Displacement and Supervision Issues
    • [I]f the employer is providing job shadowing opportunities where the worker learns certain functions under the close and constant supervision of regular employees, but performs no or minimal work, this type of activity is more likely to be a bona fide training program . . .
  • No Job Entitlement/No Entitlement to Wages
    • The parties’ expectations regarding the compensation and job opportunities are relevant but not determinative. Even when such an agreement exists, hiring workers who finish the training program is considered in determining whether an employment relationship exists, and frequently hiring such workers suggests that the workers are not trainees. Finally, if the worker is placed with the employer for a trial period with the hope that the worker will then be hired on a permanent basis (even if the worker is not automatically entitled to a job at the end of the period), then the worker is not likely to be a trainee during the trial period.

The article notes that some employers criticize the criteria, which are based on a 1947 Supreme Court decision, as outdated for an information- and service-based economy.  Nevertheless, they are the law.  Few of my student’s internships with for-profit companies would appear to satisfy all six criteria.

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Constitutionality of the Health Care Reform Act

Between discussions of the holiday plans, the Patriots, and the weather my morning coffee buddies have recently discussed the constitutional challenges to the Affordable Care Act.  For my friends I read and summarized the court decisions in two the challenges as follows.

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The Executive Summary (with my spin):

  • CON–The decision not to purchase health insurance, like any decision about how to live one’s life, is an aspect of individual liberty. It’s my choice whether to drink, smoke cigarettes, exercise, and purchase health insurance. Congress’s Commerce Clause power may be expansive, but it does not authorize the federal government to tell me what I must buy. If Congress can require me to purchase health insurance, where does its power end? Can it require that I join a health club? Eat more broccoli and fewer french fries? Listen to NPR?
    • I think of this as the So what’s it to you if I’m passive/aggressive? argument.
  • PRO–If you are not part of the solution you are part of the problem. Not to decide is to decide. One’s decision not to purchase health insurance has economic consequences that are not limited to the individual. When you don’t purchase health insurance, or when you purchase it only on the day you get sick, your shift the cost of your care to health care providers, insurance companies, and third parties like me. This cost-shifting has a substantial economic effect and is therefore within Congress’s Commerce Clause power.
    • This is the No Man is an Island argument.

The Details:

Two federal district court judges in Michigan and Virginia have upheld the Affordable Care Act; another federal district court judge in Virginia struck it down. I’ve read the Michigan and latter Virginia decisions, which deal with the same issue–whether the provision (effective in 2014) requiring all Americans (with limited exceptions) to purchase defined minimum health insurance or pay a penalty is beyond Congress’s power under the Commerce Clause. The issue can be defined simply, but its resolution rests on one’s conception of individual liberty and the relationship between individual actions and societal consequences.

The Commerce Clause’s language is not helpful. It states The Congress shall have power . . . to regulate commerce with foreign nations, and among the several states, and with the Indian tribes. The Supreme Court has interpreted the Clause to grant Congress three broad categories of power, including the power to regulate “activities that substantially effect interstate commerce,” The issue is whether an individual’s decision not to purchase health insurance is an activity that substantially effects interstate commerce. The Court has never decided whether inactivity meets the substantial economic effect requirement. Its cases that are closest to on point (all cited by the Michigan court) deal with affirmative acts: growing more wheat than permitted under a New Deal wheat quota, thereby disrupting Congress’s legislative scheme to support wheat prices; growing marijuana for private medical consumption, thereby disrupting Congress’s regulation of marijuana trafficking; and refusing to rent motel accommodations to blacks, thereby raising barriers to the flow of interstate commerce. Virginia, opposing the ACA, argued that “a decision not to purchase a product, such as health insurance, is not an economic activity.” It distinguished–

what was deemed to be “economic activity” in Wickard and Gonzales, namely a voluntary decision to grow wheat or cultivate marijuana, from the involuntary act of purchasing health insurance as required by the Provision. In Wickard and Gonzales, individuals made a conscious decision to grow wheat or cultivate marijuana, and consequently, voluntarily placed themselves within the stream of interstate commerce. Conversely, the Commonwealth maintains that the Minimum Essential Coverage Provision compels an unwilling person to perform an involuntary act and, as a result, submit to Commerce Clause regulation.

The judge agreed. He concluded that Congress’s regulatory powers “are triggered by some type of self-initiated action.” Because there is no federal court precedent that extends Commerce Clause power “to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market” he held that the minimum coverage provision exceeds Congress’s power.

The judge in the Michigan case reached the opposite conclusion on the same issue. (Ain’t law great?!) His opinion cites Congress’s legislative findings regarding the minimum coverage provision:

Congress determined that the Individual Mandate “is an essential part of this larger regulation of economic activity,” and that its absence “would undercut Federal regulation of the health insurance market.” Congress found that without the Individual Mandate, the reforms in the Act, such as the ban on denying coverage based on pre-existing conditions, would increase the existing incentives for individuals to “wait to purchase health insurance until they needed care,” which in turn would shift even greater costs onto third parties. Conversely, Congress found that by “significantly reducing the number of the uninsured, the requirement, together with the other provisions of this Act, will lower health insurance premiums.” Congress concluded that the Individual Mandate “is essential to creating effective health insurance markets in which improved health insurance products that are guaranteed issue and do not exclude coverage of pre-existing conditions can be sold.”

After reviewing the cases noted above the judge concluded that an individual’s decision not to purchase health insurance has a substantial effect on interstate commerce and that the minimum coverage provision is essential to implementing the ACA’s objectives. He states that the “phenomenon of cost-shifting is what makes the health care market unique.”

The health care market is unlike other markets. No one can guarantee his or her health, or ensure that he or she will never participate in the health care market. Indeed, the opposite is nearly always true. The question is how participants in the health care market pay for medical expenses – through insurance, or through an attempt to pay out of pocket with a backstop of uncompensated care funded by third parties.

Here’s the money quote:

The plaintiffs have not opted out of the health care services market because, as living, breathing beings, who do not oppose medical services on religious grounds, they cannot opt out of this market. As inseparable and integral members of the health care services market, plaintiffs have made a choice regarding the method of payment for the services they expect to receive. The government makes the apropos analogy of paying by credit card rather than by check. How participants in the health care services market pay for such services has a documented impact on interstate commerce. Obviously, this market reality forms the rational basis for Congressional action designed to reduce the number of uninsureds.

I agree with the Michigan judge that the economic consequences of an individual’s decision not to purchase health insurance extend beyond the individual and come within existing interpretations of the Commerce Clause. If the Supreme Court reaches the same conclusion I hope it explicitly limits the scope of its ruling to the health care act, because inviting Congress to require us to do whatever it thinks is good for us is scary.

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“The Ethics of WikiLeaks”

The above-titled Institute for Global Ethics piece explores right-versus-right elements of the WikiLeaks story:

This latest play has caused pundits to scramble toward one pole or the other. Some see WikiLeaks as a radiant shaft of light, cutting through official obfuscation and sharing vital information every citizen deserves to know. Others see it as a treasonous breach of confidentiality, seizing up the well-oiled protocols of international negotiation and endangering the lives of military, diplomatic, and intelligence operatives around the world. Blinded by such polarizations, few see the story for what it is: a right-versus-right dilemma raising profound questions about the role of information in a democracy.

It concludes with a perspective I’ve not seen elsewhere:

In the end, then, WikiLeaks is about how we define war. A citizenry in a state of war makes short shrift of those who disclose such secrets. A citizenry in a state of peace tolerates and even encourages them. How we view WikiLeaks depends on which state we think we’re in.

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Silos: Good for Grain, Bad for Information

Tim Berners-Lee–the guy who invented the World Wide Web–wrote the best explanation of why net neutrality and open source are important and closed systems like Facebook and iTunes are bad for the future of the Internet:  Long-Live the Web: A Call for Continued Open Standards and Neutrality, Scientific American Magazine, December 2010.  These two paragraphs from the article’s introduction summarize Berners-Lee’s thesis:

The Web evolved into a powerful, ubiquitous tool because it was built on egalitarian principles and because thousands of individuals, universities and companies have worked, both independently and together as part of the World Wide Web Consortium, to expand its capabilities based on those principles.

The Web as we know it, however, is being threatened in different ways. Some of its most successful inhabitants have begun to chip away at its principles. Large social-networking sites are walling off information posted by their users from the rest of the Web. Wireless Internet providers are being tempted to slow traffic to sites with which they have not made deals. Governments—totalitarian and democratic alike—are monitoring people’s online habits, endangering important human rights.

It will be required reading in Internet law, it’s addresses important topics, and its short.  Why not read it now?

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More on WikiLeaks

In my Internet law course we talk about some of the Internet cultures that formed in the 1990’s–techno-Utopians, anarchists, parliamentarian legalists, and royalists, to borrow Julian Dibble’s categories. Many students wonder why.  These categories from a lost world have little relevance to the environment in which they Facebook and SMS; it’s like discussing Whigs and Tories.  I tell them these cultures still exist and can shape current debates about Internet governance, but I’m sure this sounds academic.  But what I love about teaching Internet law is how events coincide with class discussions.  Anyone who doubts the relevance of  the forces these categories represent has not heard of WikiLeaks.

More WikiLeaks articles, reaction, and analysis:


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You Heard It Here First

By the way, I think I am on to something with my statement in the previous post that Julian Assange may have a Christ Complex (“a psychological term used loosely to describe any individual mentally fixed on superiority and/or the claim of being a savior. It is not exclusive to Christian thought.”)  The messianic belief in information transparency as an end in itself, itinerant spreading of the word, indifference to material acquisitions, persecution by sovereign powers, willingness to sacrifice himself for his cause, zealous followers–the pieces are there.  As soon as my wise-ass self wrote the words as a clever jest I hauled up and said what a minute . . . that’s who he is.  Before writing this current post a Google search of <“julian assange” “christ complex”> produced 39 hits, in many of which the searched terms are present only coincidentally. So if “assange christ complex” becomes a meme, remember this blog was way, way ahead of the curve.

Which raises another question:  will Mel Gibson play Assange in the WikiLeaks movie?  [<“mel gibson” “christ complex”> 606 hits]

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Today’s Amazon Special: Flip-Flops

Amazon.com has taken brief, Kerry-esque, we-were-for-it-until-we-were-against-it stands on recent controversies.

  • That’s What Pedophilia Means? A month ago Amazon.com received heat for selling The Pedophile’s Guide to Love and Pleasure: a Child-lover’s Code of Conduct, a self-published rulebook by the self-appointed Mr. Manners of pedophilia.   Amazon.com defended its right to sell–and purchasers’ right to purchase–books on controversial topics.  “Amazon believes it is censorship not to sell certain books simply because we or others believe their message is objectionable.  Amazon does not support or promote hatred or criminal acts, however, we do support the right of every individual to make their own purchasing decisions.”   Amazon.com should have added “we will continue to support this right for 24 hours or until we cave to customer pressure, whichever occurs first.”  One day later it pulled the book–figuratively, of course, and without comment–from its electronic shelves. I am mildly critical of its decision not to sell the book. The First Amendment protects the book’s content, repellent as it may be, but Amazon.com’s mission is selling stuff, not defending First Amendment rights.  On a continuum of American values Amazon.com is closer to Wal-Mart and Sears than Feisty Independent Urban Bookstore.  My values are not Wal-Martian (pronounced “mar-tee-an”, nor “marshan”) but I respect that Wal-Mart would have known it’s opposition to the Pedophile’s Guide from jump. Amazon.com should have known more of its customers would howl in protest than applaud its courage.  It should have known that however heady the experience of staunchly defending the Bill of Rights, defiance in the face of threatened boycotts is not in its corporate DNA.  Better to be honest and say “we sell so much stuff that inappropriate content sometimes gets through our filters. We respect the First Amendment but we respect our customers’ patronage more.  We screwed up and we’re pulling the book.  Be aware it is likely to happen again, because we sell so much stuff that we can’t monitor all of it.”
  • We’re Hosting That WikiLeaks? Hackers targeted WikiLeaks after its release of hundreds of thousands of classified U.S. diplomatic documents.  Last week WikiLeaks moved its server operations to Amazon.com which, in addition to selling lots of stuff, hosts other websites, offering them the same robust protection from DDoS attacks and other hacker misanthropy that it provides itself.  A few days later Connecticut Senator Joseph Lieberman called Amazon with pointed questions about hosting WikiLeaks on its cloud servers.  A day later, denying Lieberman’s criticism was the cause, Amazon.com terminated WikiLeaks’ hosting account.  Why?  Because WikiLeaks’ was violating Amazon.com’s Terms of Service by providing access to content–the diplomatic cables–that violated a third-party’s rights to the content. This was not a late-breaking development in the WikiLeaks story. It moved its hosting to Amazon.com because it wanted protection from DDoS attacks directed at WikiLeaks in retaliation for its release of the cables.  A cynic might believe that WikiLeaks played Amazon.com like a cheap harmonica, knowing its penchant for waffling would result in Amazon.com throwing WikiLeaks back into the cold, cruel world only days after offering shelter.*

*Which makes me wonder if WikiLeaks founder/face/czar Julian Assange has a Christ complex.  But that’s a topic for another post.

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