the pedagogical, legal, and ethical implications of unpaid internships

Journal of Legal Studies EducationVolume 30, Issue 1, 99–130, Winter/Spring 2013

The Pedagogical, Legal, and EthicalImplications of Unpaid InternshipsDebra D. Burke∗ and Robert Carton∗∗

I. Introduction

The concept of serving an apprenticeship as a means of training skilled work-ers dates to the Middle Ages. Apprenticeships in the Middle Ages and duringthe Renaissance were typically seven years in duration, in order to ensure thatthe masters recouped their investment and that the apprentice was given suf-ficient time to become skilled and not simply exploited as cheap labor.1 Theexperience arguably imparted not only artisan skills, but also the tacit skillsneeded for professional success,2 such as informed intuition, judgment un-der pressure, ease with clients, and problem-solving abilities, skills that oftenimprove with experience.3 The English apprenticeship system was establishedas a national trade program in 1562 with the Statute of Artificers, which wasdesigned to ensure that master craftsmen would transmit their skills and toestablish rules for managing the system of apprenticeship.4 A two-tier systememerged under which only a master’s child or the child of parents possess-ing freeholds worth a threshold amount was entitled to serve as a voluntary

∗Professor, Business Administration & Law, Western Carolina University.

∗∗Associate Professor, Entrepreneurship, Western Carolina University.

1J.R. Epstein, Craft Guilds, Apprenticeship, and Technological Change in Preindustrial Europe, 58 J.Eco. Hist. 684, 691–92 (1998).

2Id. at 688 n.13 (citing Emma Rothschild, Adam Smith, Apprenticeship and Insecurity, Centre forHistory & Economics Working Paper, King’s College, Cambridge, July 1994).

3Rick Newman, 7 New Skills Every Worker Needs, U.S. News & World Rep. (July 26, 2010), availableat http://money.usnews.com/money/blogs/flowchart/2010/07/26/7-new-skills-every-worker-needs. Such soft skills also can include sensitization to professional behavioral expectations,which is important to success at work.

4Janet L. Dolgin, Transforming Childhood: Apprenticeship in American Law, 31 New Eng. L. Rev.1113, 1121 (1997).

C© 2013 The AuthorsJournal of Legal Studies Education C© 2013 Academy of Legal Studies in Business

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apprentice, while involuntary apprenticeships were reserved for impover-ished children, who were not permitted to apprentice in the skilled trades.5

In fact, apprenticeship articles represent one of the first types of personalcovenants or obligations recognized under the English common law.6

The system of apprenticeship, which was instituted in European townsduring feudal times by local trade guilds, transferred to the colonies, whereit became indispensable in the seventeenth and eighteenth centuries forsocializing, educating, and training children to enter trades and professions.7

Usually after contractual negotiations, colonial parents apprenticed theirchildren between the ages of seven and fourteen to learn a trade and to beeducated.8 Within the next centuries this relationship, characterized eitheras indentured servitude or as an apprenticeship, was limited to childrenof limited economic means.9 Apprenticeships persisted in Great Britain butdeclined in the United States as the availability of public secondary educationsupplanted apprenticeships for labor force training.10

Recently, however, the apprenticeship system is reemerging as a promis-ing model for improving job skills,11 particularly in the Science, Technol-ogy, Engineering, and Mathematics (STEM) fields.12 Currently, numerous Websites match prospective interns to prospective positions.13 While today

5Id. at 1123.

6S.F.C. Milsom, Historical Foundations of the Common Law 252–53 (2d ed. 1981). Ap-prentices served in the courts as well. Id. at 52–53.

7Dolgin, supra note 4, at 1118–19.

8Id. “The master and the apprentice’s parent (usually, the father) would profit from the contract.The apprentice would learn a trade. It was business as usual, as it had been for centuries.” Id. at1126.

9Id.

10Bernard Elbaum, Why Apprenticeship Persisted in Britain But Not in the United States, 49 J. Eco.Hist. 337, 339 (1989).

11Jennifer Gonzalez, Apprenticeship Programs Expand with Help of Community Colleges, Chron.Higher Educ., Sept. 19, 2010, available at http://chronicle.com/article/Apprenticeship-Programs-Expand/124523/.

12Nick Smith, You’re Hired! Do We Need More Apprentices?, Engineering & Tech, Aug. 8, 2009, at76–79.

13See, e.g., Intern, Inc., http://www.interninc.com (last visited Oct. 12, 2012) (placement pro-gram); Start Up Roots, http://www.startuproots.org (last visited Oct. 12, 2012) (fellowshipprogram for start-up talent); InternshipFinder, http://www.internshipfinder.com/ (last visitedOct. 12, 2012) (clearinghouse); Urban Interns, http://www.urbaninterns.com (last visited Oct.12, 2012) (placement service for fast-growing companies).

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apprenticeships are typically paid positions, unpaid internships also provide avehicle for developing both tacit and job-related skills. Three-quarters of theten million students enrolled in America’s four-year colleges and universitieswill work as interns at least once before graduating, according to the CollegeEmployment Research Institute, and between one-third and one-half will getno compensation for their efforts.14 A recent survey reveals that 46 percent ofuniversity career centers reported more unpaid internship postings duringthe most recent calendar year compared with 2009–2010;15 notably, however,more paid internships translated into employment offers than unpaid intern-ships.16 Are these unpaid internships more exploitive than apprenticeshipsof long ago?

This article will examine the pedagogical, legal, and ethical issues con-cerning unpaid internships and their implication for business education forthe student, the employer, and the educational institution. The recent en-forcement efforts by the Labor Department against employers that illegallyfail to pay interns makes this a particularly timely discussion to guide allparties involved in internships. Likewise, the enthusiastic embrace of experi-ential learning suggests that an internship opportunity, paid or unpaid, mayproduce value for the student and prospective employer, and is worthy of amore in-depth analysis from a pedagogical, as well as an ethical, perspective.

II. Pedagogical Justifications

As Ralph Waldo Emerson observed, “[S]kill to do comes of doing;”17 in-ternships can provide the opportunity “to do” and hence, to engage in

14Ross Perlin, Unpaid Intern, Complicit Colleges, N.Y. Times, Apr. 2, 2011, available at http://www.nytimes.com/2011/04/03/opinion/03perlin.html?pagewanted=all.

15Alexis Grant, The Ethics of Unpaid Internships: When Are Unpaid Internships Legal?, U.S.News & World Rep., July 19, 2011, available at http://money.usnews.com/money/careers/articles/2011/07/19/the-ethics-of-unpaid-internships?PageNr=1. About 38 percent reportedmore paid internship postings. Id.

16Of 20,000 graduating seniors who participated in a recent survey by National Association ofColleges and Employers, more than half held an internship sometime during their college ca-reer, and half of those internships were paid. About 60 percent of students who completed apaid internship in the for-profit sector received a job offer by graduation compared to only 38percent of students who participated in an unpaid internship. Id. See also Jessica E. Vascella, In-terns Are Latest Target In Battle for Tech Talent, Wall St. J., Dec. 22, 2011, available at http://online.wsj.com/article/SB10001424052970204879004577108672160430712.html (discussingthe upswing in the use and hiring of paid interns in the tech fields).

17Quote World, Famous Quotes, http://www.quoteworld.org/quotes/4369 (last visited Oct. 12,2012).


authentic learning. An internship may be defined as “controlled experien-tial learning where a student receives academic credit while employed byan organization in a chosen area of interest.”18 Experiential learning, an in-structional approach based on the concept that ideal learning occurs throughexperience,19 is a recognized means of instruction that was championed byrenowned educator John Dewey.20 Experiential learning uses inductive rea-soning to formulate general principles from direct personal experiences inan effort to motivate life-long learning.21 To the extent that internship ex-periences involve the application of knowledge to solve problems, studentsare engaging in higher order critical thinking skills such as analysis, syn-thesis, and evaluation.22 Examples of experiential learning modules includeinternships, clinical placements, and practicums, all which serve to developa student’s professional skills.23 The educational value is significant becausesuch learning experiences provide students an opportunity to apply skillsdiscussed in a practical hands-on environment, which were discussed only astheoretical in the classroom.24

The internship experience provides numerous benefits to business stu-dents in particular. For example, students can gain a realistic view of their

18Shirley M. Stretch & Shelly S. Harp, Retail Internships: An Experiential Learning Challenge, Mkt.Educ. Rev., Jan. 1991, at 67 (emphasis added).

19Heather Coffey, Experiential Education, Learnnc.org, http://www.learnnc.org/lp/pages/4967?ref=search (last visited Oct. 12, 2012).

20See generally John Dewey, Experience and Education (2d ed. 1997) (espousing a theory ofexperience that arises from the interaction of two principles, those of continuity and interaction).See also David Kolb, Experiential Learning: Experience as the Source of Learning andDevelopment (1984) (advocating for experiential learning).

21Eleanor Brown, The Scope of Volunteer Activity and Public Service, 62 Law & Contemp. Probs. 17,22 (1999).

22Bloom’s taxonomy of thinking skills creates a hierarchy of intellectual development fromthe most simplistic learning accomplishment (recall) to the most sophisticated (evaluation).Benjamin Bloom et al., Taxonomy of Educational Objectives: The Classification ofEducational Goals 201–07 (1956).

23See Linda F. Smith, Learning from Practice: Why Clinical Programs Should Embrace Civic Engagement,Service Learning and Community Based Research, 10 Clinical L. Rev. 723, 728 (2004) (recognizingthese benefits and the additional benefit of civic responsibility developed by service learningprojects.)

24Kristi L. Schoepfer & Mark Dodds, Internships in Sport Management Curriculum: Should LegalImplications of Experiential Learning Result in the Elimination of the Sport Management Internship?, 21Marq. Sports L. Rev. 183, 183 (2010).


intended profession,25 engage in real-world problem solving,26 build theirprofessional networking relationships,27 and add experience that is valuedby potential future employers to their resumes.28 Moreover, these endeavorsaugment the resumes of students by giving them actual, relevant experience,while enhancing their professional network.29

One model suggests that authentic experiential learning, in whateverform, is comprised of four phases: a concrete experience, followed by timeto reflect on the experience, to apply theories to the experience, and toevaluate the experience.30 Similarly, the National Society for ExperientialEducation identifies eight Best Practices to ensure a quality experience andgenuine learning outcomes, four of which include the following:

� Authenticity, having a meaningful real world context;� Reflection, transforming a generic experience into a learning experience

with measurable outcomes;� Monitoring and Continuous Improvement, ensuring a feedback loop related

to learning intentions and quality objectives for evaluation; and� Assessment and Evaluation, documenting outcomes as a means to develop

and refine the specific learning goals and quality objectives.31

25D. Larry Crumbley & Glen E. Sumners, How Businesses Profit from Internships, Internal Audi-tor, Oct. 1998, at 54.

26Caroline P. D’Abate et al., Making the Most of an Internship: An Empirical Study of InternshipSatisfaction, 8 Acad. Mgmt. Learning & Educ. Bus. 527 (2009).

27Eleanor G. Henry, Setting up a Student Internship with a University, Nat’l Pub. Acct. Apr./May,2002, at 23.

28Richard L. Devine et al., Required Internship Programs in Marketing: Benefits, Challenges and Deter-minants of Fit, Mkt. Educ. Rev., Summer 2007, at 47.

29Jack J. Gault et al., Undergraduate Business Internships and Career Success: Are They Related?, J. Mkt.Educ., Apr. 2000, at 45.

30Kolb, supra note 20, at 21.

31Nat’l Soc. for Experiential Educ., Standards of Practice: Eight Principles of Good Practice for All,http://agsci.oregonstate.edu/sites/default/files/students/EightStandards.pdf (last visited Oct.12, 2012). Others include: (1) Intention, meaning that all parties must be clear from the outsetwhy experience is the chosen approach to learning; (2) Preparedness and Planning, suggestingthat there be a sufficient foundation to support a successful experience; (3) Orientation andTraining, preparing participants with important background information about each other andabout the setting for the project; and (4) Acknowledgment, celebrating the successful completionof the learning experience. Id.


Thus, valid internships should preserve the integrity of the learningprocess by measuring learning outcomes, providing feedback on those re-sults, and permitting the student to digest, or reflect on the experience in thecontext of the educational goals.32

The internship also should augment student knowledge. Skills and abil-ities knowledge is the primary type of knowledge obtained in traditionalclassroom settings, and includes, for example, technical, managerial, oppor-tunity identification, and creativity knowledge.33 On the other hand, taskand environmental knowledge refers to knowledge gained from prior ex-perience, and includes, for example, knowledge of customers, suppliers,technology, competitors, products/services, and political, legal, and socialtrends.34 Context-specific experience is a critical source of task and envi-ronmental knowledge stored as schema in the brain.35 When individualsencounter a context-specific event in the present that is similar to a priorexperience, they are quickly able to activate schemas that dictate courses ofaction. In essence, the actions taken are programmed responses based uponprior experience.36 In fact, what differentiates an expert from a novice is thepossession of schema related to the context of interest; as such, experts, givena little bit of situational information, can quickly make inferences about whatmay happen next in the circumstances and can react accordingly.37 Expertiseand competency that is cited as being essential for organizational leadership

32Requiring interns to journal about their experience is a valuable reflective exercise. J.P. Ogilvy,The Use of Journals in Legal Education: A Tool for Reflection, 3 Clinical L. Rev. 55, 60 (1996) (as-serting that the use of journaling improves problem-solving skills, promotes reflective behavior,and provides relevant feedback).

33Gaylen N. Chandler, Business Similarity as a Moderator of the Relationship Between Pre-ownershipExperience and Venture Performance, Entrepreneurship Theory & Pract., Spring 1996, at 52;Lanny Herron, Do Skills Predict Profits? A Study of Successful Entrepreneurship 71,213 (1994) (on file with author).

34Chandler, supra note 33 at 52; Herron, supra note 33 at 72, 225.

35Barbara Levitt & James G. March, Organizational Learning, 14 Annual Rev. Soc. 319, 321(1988).

36Valeri Abbot & John B. Black, Inferences in Comprehension in Knowledge Structures 123(James A. Galambos, Robert P. Abelson & John B. Black eds., 1986). However, prior experiencecan lead to improper actions when schemas are applied to inappropriate context. Richard Reed& Robert DeFillipi, Causal Ambiguity, Barriers to Imitation, and Sustainable Competitive Advantage,15 Acad. Mgmt. Rev. 88, 92 (1990).

37Robert P. Abelson & John B. Black, Introduction, in Knowledge Structures 1 (James A.Galambos, Robert P. Abelson & John B. Black eds., 1986).


success includes prior managerial experience,38 prior start-up experience,39

prior management team experience,40 and prior experience in the line ofbusiness.41 Clearly, the acquisition of this form of knowledge is experience,and internships represent an excellent first step in the supervised acquisitionof context-specific knowledge. As such, internships provide an appropriatesetting to obtain task and environmental knowledge in order for appropriateschema to be implanted in the mind, which then can be accessed in futureanalogous situations.

Commensurately, task and environment knowledge is difficult to gainin a traditional classroom because reality is difficult to simulate for severalreasons. First, work often presents an irrational decision-making environ-ment, in contrast to the rational decisional environment normally presumedto exist in the classroom. For example, case studies, though greatly beneficialfor examining what scenarios a student may encounter as a professional andprompting a simulated decision point,42 nevertheless are analyzed dispassion-ately and methodically according to scripted, discipline-based principles. Incontrast, the work environment can be both passionate and irrational. Sec-ond, a work environment has competing, genuine personal interests at stakethat influence decisions substantially. For example, a manager could decide

38Gaylen N. Chandler & Steven H. Hanks, Founder Competence, the Environment, and Venture Perfor-mance, Entrepreneurship Theory & Pract., Spring 1994, at 86 ; Robert Stuart & Pier A. Abetti,Impact of Entrepreneurial and Management Experience on Early Performance, J. Bus. Venturing, May1990, at 151–62.

39G.T. Lumpkin & Gregory G. Dess, Clarifying the Entrepreneurial Orientation Construct and LinkingIt to Performance, 21 Acad. Mgmt. Rev.135, 149 (1996).

40Jeffrey E. McGee et al., Cooperative Strategy and New Venture Performance: The Role of BusinessStrategy and Management Experience, 16 Strategic Mgmt. J. 565, 567 (1995).

41Jane E. Dutton & Susan E. Jackson, Categorizing Strategic Issues: Links to Organizational Action, 12Acad. Mgmt. Rev. 76, 81 (1987); Theresa K. Lant & Stephan J. Mezias, Managing DiscontinuousChange: A Simulation Study of Organizational Learning and Entrepreneurship, Strategic Mgmt. J.,Summer 1990, at 167. See generally Ian C. MacMillan, To Really Learn About Entrepreneurship, Let’sStudy Habitual Entrepreneurs, J. Bus.Venturing, Autumn 1986, at 241–43. Ian C. MacMillan, RobinSeigel, & Subba P. Narasimha, Criteria Used by Venture Capitalists to Evaluate New Venture Proposals, J.Bus.Venturing, Winter 1985, at 119–28; Juan B. Roure & Robert H. Keeley, Predictors of Success inNew Technology Based Ventures, J. Bus.Venturing, July 1990, at 201–20; Juan B. Roure & ModestoA. Maidique, Linking Prefunding Factors and High-Technology Venture Success: An Exploratory Study, J.Bus. Venturing, Fall 1986, at 295–306.

42For a review of the use of case studies as a pedagogical tool see Robert J. Landry III, EthicalConsiderations in Filing Personal Bankruptcy: A Hypothetical Case Study, 29 J. Legal Stud. Educ. 59,61–64 (2012).


to keep old technology at a higher cost rather than to adopt new technologyat a lower cost if the change might cause a problem, such that the manager’sjob could be jeopardized. Logic would dictate changing, but the manager’srisk aversion could result in suboptimum decision making. Third, chaos fre-quently is precipitated by environmental and competitive forces that simplydo not exist in a classroom setting. For example, a trademark could be con-tested unexpectedly by a competitor, resulting in the need to reassess intel-lectual property ownership issues and to delay marketing initiatives. In sum,internships expose students to the less than optimum atmosphere in whichdecisions are often made as well as to personal dynamics, which frequentlyfactor into the political nature of the work environment.

In addition to being a beneficial situational learning experience, intoday’s job market an educational internship gives an applicant an advantagewhen seeking permanent employment.43 Often employers require that jobcandidates include work experience in the field among their qualifications,which is difficult to obtain for recent college graduates, particularly in highlycompetitive career fields such as entertainment, electronic media, and sportindustries.44 Thus, internships, paid or unpaid, are growing in prevalence andrecognition as a source of essential on-the-job training and the beginningof a professional network for student trainees.45 Commensurately, unpaidinternships provide employers a sneak peak at prospective employees,as wellas free labor.46

Of course, not all internships are equally effective learning experiences.Many interns report that they have been used by being assigned to menial

43Employers are increasingly looking for individuals with internship experience when hiring. Asurvey published by the National Association of Colleges and Employers reported that 75 percentof employers prefer job candidates with relevant work experience. Natalie Bacon, Note, UnpaidInternships: The History, Policy and Future Implications of “Fact Sheet #71,” 6 Entrepreneurial Bus.L.J. 67, 68 (2011).

44Craig J. Ortner, Note, Adapting Title VII to Modern Employment Realities: The Case For the UnpaidIntern, 66 Fordham L. Rev. 2613, 2616–17 (1998).

45Id. at 2618. The fact that unpaid internships may enhance future employability is one justi-fication for why the federal Temporary Assistance for Needy Families program classifies someunpaid activities as work for eligibility. Noah D. Zatz, What Welfare Requires from Work, 54 UCLAL. Rev. 373, 415–16 (2006).

46Ortner, supra note 44, at 2619–20. A 1990s conservative calculation estimates that employersmay reap nearly $40 million in illegal free labor every year through the use of unpaid interns.David C. Yamada, The Employment Law Rights of Student Interns, 35 Conn. L. Rev. 215, 225 (2002).


tasks with no educational benefits or career preparation,47 and they complainthey are doing largely unskilled work,48 or worse, running personal errands.49

In fact, a study by the National Association of Colleges & Employers reportsthat students who are paid during their internship report having a more pos-itive experience in general than those who are not paid; in contrast, unpaidinterns report feeling they were exploited as free labor and not assignedmeaningful work.50 Nevertheless, while a well-structured experience can bevaluable, is it legal if unpaid, or is it instead an illegal exploitation of thestudent in the guise of it being good for them?

III. Legal Implications

The legal implications of unpaid internships primarily focus on the FairLabor Standards Act of 1938 (FLSA or the Act)51 and its minimum wagerequirements. While the FLSA provides certain exceptions for trainees andstudent workers, there is room for interpretation about how the FLSA shouldbe applied to unpaid student interns. The following sections will discuss thepositions of the Labor Department and the Supreme Court on what factorstrigger an obligation to pay student interns. The following sections also willexamine how other statutory protections provided under federal law maynot be applicable to student interns because they are not considered to beemployees.

47NPR.org, Questioning the Ethics of Unpaid Internships, (July 13, 2010), http://www.npr.org/templates/story/story.php?storyId=128490886 [hereinafter Questioning the Ethics].

48Steven Greenhouse, California Labor Dept. Revises Guidelines on When Interns Must BePaid, N.Y. Times, Apr. 9, 2010, available at http://www.nytimes.com/2010/04/10/business/10interns.html?adxnnl=1&adxnnlx=1323640978-Dt/vO3ALF0nltiwLkOOXxw.

49Stephen E. Frank, Workplace: Taking Out the Garbage, Walking the Boss’s Dog and Other Interns’Tales, Wall St. J., July 19, 1994, at B1.

50Alison Damast, Should You Pay for Your Student Intern?, Bloomberg Bus. Wk. Mag., Apr. 16,2008, available at http://www.businessweek.com/magazine/content/08_64/s0804026863534.htm.

51Pub. L. No. 75–718, 52 Stat. 1060 (1938) (codified as amended at 29 U.S.C. §§ 201–219 (2010)).


A. Minimum Wage Legislation

1. Overview

The FLSA established a forty-hour workweek, overtime pay at the rate of timeand a half for every hour over forty hours worked in one week, prohibitedchild labor, and established a uniform requirement that covered workers bepaid a base amount per hour throughout the nation.52 The statute providesthat “[E]very employer shall pay to each of his employees who in any work-week is engaged in commerce or in the production of goods for commerce,or is employed in an enterprise engaged in commerce or in the productionof goods for commerce,” a legislated wage rate.53 The Act was designed toexclude from interstate commerce goods produced “under conditions detri-mental to the maintenance of the minimum standards of living necessary forhealth and general well-being” and to prevent the distribution of goods ininterstate commerce, the production of which would perpetuate substandardlabor conditions.54 The FLSA defines employ as “to suffer or permit to work,”and if that condition occurs, an employment relationship exists regardless ofthe parties’ intentions.55

While the FLSA requires covered employers to pay nonexempt employ-ees a specified rate,56 and makes violations punishable by fines and impris-onment in addition to civil damages,57 not all categories of employees arecovered. Some of the categories of employment exempt from the legislationinclude certain employees in the agricultural sector and fishing industry,58 as

52Id.

5329 U.S.C. § 206(a) (2011).

5429 U.S.C. § 202(a) (2010). The Act was premised upon a congressional finding that “labor con-ditions detrimental to the maintenance of the minimum standard of living necessary for health,efficiency, and general well-being of workers” was perpetuated by the channels and instrumen-talities of interstate commerce, burdened the free flow of goods in commerce, constituted anunfair method of competition, led to labor disputes and an interference with the orderly andfair marketing of goods. Id.

5529 U.S.C. § 203 (2011). The act defines an employee as “any individual employed by anemployer,” employer as “any person acting directly or indirectly in the interest of an employerin relation to an employee.” Id.

5629 U.S.C. § 206 (2011).

5729 U.S.C. § 216 (2011).

5829 U.S.C. §§ 211, 213(a), 203(d) and (e) (2011).


well as workers “employed in a bona fide executive, administrative, or profes-sional capacity,”59 as defined by regulations promulgated by the Departmentof Labor. The exact boundaries of these statutory exemptions, of course, aresubject to judicial interpretation.60

The FLSA also partially exempts some trainees and student workers. “Inorder to prevent curtailment of opportunities for employment” the Act autho-rizes the Secretary of Labor by regulations to “provide for the employmentof learners, of apprentices . . . , under special certificates . . . at such wageslower than the minimum wage.”61 The employer is permitted to pay theseworkers a subminimum wage if the Department of Labor provides a specialcertificate entitling the employer to pay a subminimum wage.62 While thereare no statutory definitions, the regulations define apprentice as a worker em-ployed to learn a skilled trade.63 Because professional and semiprofessionaloccupations are not considered skilled trades,64 the partial exemption for

5929 U.S.C. § 213(a)(1) (2010). For a discussion of this exemption see Christine Jolls, Fairness,Minimum Wage Law and Employee Benefits, 77 N.Y.U. L. Rev. 47, 57–61 (2002) (asserting thatemployers tend to pay workers in executive, administrative and professional positions moremoney anyway to encourage high levels of effort, in part, because they are difficult to monitor).

60See, e.g., Laura C. Edmonds, Note, The Fair Labor Standards Act-Anti-Poverty Legislation in theModern Era: Advocating Judicial Scrutiny Under a Feminist Policy-Centered Analysis, 19 W. New Eng.L. Rev. 229 (1997) (examining the rationale and effect of including a preschool within thedefinition of enterprise in interpreting the definitions of the FLSA); Adam P. Greenberg, Note,Reality’s Kids: Are Children Who Participate on Reality Television Shows Covered Under the Fair LaborStandards Act?, 82 S. Cal. L. Rev. 595 (2009) (examining the application of the FLSA provi-sion that exempts children employed as actors or performers to child participants in realitytelevision shows); Matthew J. Lang, Comment, The Search for a Workable Standard for When FairLabor Standards Act Coverage Should Be Extended to Prisoner Workers, 5 U. Pa. J. Lab. & Emp. L.191(2002) (examining the applicability of the FLSA to prisoner-workers); Sarah L. Santos, Note,The Fair Labor Standards Act-Where the Fourth Circuit Went Wrong in Shaliehsabou v. Hebrew Home ofGreater Washington: Judicial Expansion of Fair Labor Standards Act Exemptions to Include MinisterialEmployees, 28 W. New Eng. L. Rev. 369 (2006) (examining whether or not the FLSA provides aministerial exemption).

6129 U.S.C. § 214(a) (2011).

6229 U.S.C. § 214(b) (2011).

63“An apprentice is a worker, at least sixteen years of age unless a higher minimum age stan-dard is otherwise fixed by law, who is employed to learn a skilled trade through a registeredapprenticeship program.” 29 C.F.R. § 520.201(d) (2011).

64Excluded categories are “marketing; sales administration; administrative support; executiveand managerial; professional and semi-professional occupations (this category covers occupa-tions for which entrance requirements customarily include education of college level).” 29 C.F.R.§ 520.300 (2011).


an apprentice is unlikely to apply to student interns. The regulations definelearner as “a worker who is being trained for an occupation, which is not cus-tomarily recognized as an apprenticeable trade, for which skill, dexterity andjudgment must be learned and who, when initially employed, produces littleor nothing of value.”65 However, federal regulations dictate that applicationsfor the employment of learners in office or clerical occupations will not begranted,66 so as a practical matter the partial exemption would be inapplica-ble to student interns. A student-learner is defined under the regulations as “astudent who is at least sixteen years of age . . . who is receiving instruction inan accredited school, college or university and who is employed on a part-time basis, pursuant to a ‘bona fide vocational training program,’”67 which isnot the program of study for stereotypical four-year college interns.68 More-over, the information required for a successful application for the issuanceof a certificate is not easily established,69 nor necessarily worth the effort forthe small deviation from the statutory norm.70

A similar partial exemption applies to full-time students, who can be em-ployed at a subminimum wage in retail or service establishments pursuant toa certificate authorized by the Department of Labor.71 The regulations definefull-time student as a “student who receives primarily daytime instruction at thephysical location of a bona fide educational institution, in accordance with

6529 C.F.R. § 520.201(b) (2011).

6629 C.F.R. § 520.401(c) (2011).

6729 C.F.R. § 520.201(c) (2011).

68“Bona fide vocational training program means a program authorized and approved by a stateboard of vocational education or other recognized educational body that provides for part-timeemployment training which may be scheduled for a part of the work-day or workweek, foralternating weeks or for other limited periods during the year, supplemented by and integratedwith a definitely organized plan of instruction designed to teach technical knowledge and relatedindustrial information given as a regular part of the student-learner’s course by an accreditedschool, college, or university.” 29 C.F.R. § 520.300 (2011).

69The application must include, inter alia, that a certificate is necessary in order to prevent thecurtailment of opportunities for employment, the issuance of a certificate must not tend tocreate unfair competitive labor cost advantages nor have the effect of impairing or depressingwage rates or working standards of experienced workers performing similar work, an adequatesupply of qualified experienced workers is not available for employment, and reasonable effortshave been made to recruit workers paid at least the minimum wage. 29 C.F.R. § 520.404 (2011).

70The discounts range from 5 to 15 percent. See 29 U.S.C. § 214(b) (2011) (85 percent); 29C.F.R. § 520.408 (a) (1) (2011) (95 percent).

7129 U.S.C. § 214(b) (2011).


the institution’s accepted definition of a full-time student.”72 The purpose ofthis provision “is to provide employment opportunities for students who de-sire to work part time outside of their school hours without the displacementof adult workers.”73

While these partial statutory exceptions are not necessarily applicableto student internships, they do support the notion that a deviation fromminimum wage regulations is acceptable in training programs. In fact, onecommentator urges the Wage and Hour Division of the Department of Laborto promulgate a rule to create an intern-learner exemption to the FLSA, similarto the learner exemption that would allow employers to sponsor an approvedintern-training program, pay their interns slightly less than minimum wage,and make internship programs subject to regulation by the Department ofLabor, ultimately leading to a decrease in unpaid internships nationwide.74

However, unpaid internships represent more than a slight deviation fromthe norm. So, given that student internships currently are not exemptedexpressly from the FLSA, and it is unlikely that internships qualify for thepartial exemption for learners, students, or apprentices to be paid a submin-imum wage, how can for-profit employers use them without paying them theprevailing minimum wage—or anything?

2. Distinguishing Employees Covered by the FLSA from Interns

In Walling v. Portland Terminal Company,75 the Supreme Court determinedthat a trainee who performs services “without promise or expectation ofcompensation, but solely for his [or her] personal purpose or pleasure”is not an employee under the FLSA.76 Portland Terminal involved unpaid

7229 C.F.R. § 519.2 (2011). A bona fide educational institution is ordinarily an accreditedinstitution. Id.

7329 C.F.R. § 779.408 (2011).

74Jessica L. Curiale, Note, America’s New Glass Ceiling: Unpaid Internships, the Fair Labor StandardsAct, and the Urgent Need for Change, 61 Hastings L.J. 1531, 1551–60 (2010).

75Walling v. Portland Terminal Co., 330 U.S. 148 (1947).

76Id. at 152. The case concerned unpaid railroad trainees who followed around employeesfor about a week to learn the job before being hired. Id. Subsequently, in Tony and Susan AlamoFound. v. Sec’y of Labor, 471 U.S. 290 (1985) the Court stated that the minimum wage and overtimeprovisions of the FLSA did not apply to “ordinary volunteerism.” Id. at 303. See also Isaacson v.Penn Cmty. Servss, Inc., 450 F.2d 1306 (4th Cir. 1971) (distinguishing nonprofit and for-profit


trainees undertaking a week-long course for prospective yard brakemen.77

Satisfactorily completing the course did not guarantee the trainees a job,but rather placement on a list of qualified individuals available to work.78

In evaluating the alleged FLSA violation, the Court noted that the traineesdid not displace any regular employees, who instead supervised the trainees,and that the work of the trainees did not expedite the company business butcould actually impede it.79 Justice Black observed that “[T]he Act’s purposeas to wages was to insure that every person whose employment contemplatedcompensation should not be compelled to sell his services for less than theprescribed minimum wage.”80 Conversely, it was not intended to punishemployers “for providing, free of charge, the same kind of instruction ata place and in a manner which would most greatly benefit the trainees.”81

“Accepting the unchallenged findings here that the railroads receive no‘immediate advantage’ from any work done by the trainees, we hold thatthey are not employees within the Act’s meaning.”82 In sum, since the termsuffer or permit to work was not interpreted as making a person an employee ofanother who provides aid or instruction providing the work serves only thetrainee’s own interest, an intern may be excluded from the provisions of theFLSA.

Following the Court’s lead in Portland Terminal, the Department of La-bor enunciated criteria to be applied in determining whether or not a traineeor intern should be classified as an employee under the FLSA that focusedon the Court’s decision, that is, that the relationship must be educational,for the benefit of the trainee, not displace workers, provide no immediatebenefit to the employer, guarantee no permanent position, and not contem-plate the payment of wages.83 None of the criteria require an intern to be

corporations under the FLSA because the nonprofit’s primary purpose was to benefit the publicat large).

77Walling v. Portland Terminal Co., 330 U.S. 148, 149 (1947).

78Id. at 150.

79Id.

80Id. at 152.

81Id. at 153.

82Id.

83Bacon, supra note 43, at 74. However, it was unclear if an employer had to satisfy all six teststo avoid an employment relationship with an intern or trainee, or could fail on one or more of


enrolled in a credit-earning college or university program. However, opin-ion letters of the Department of Labor indicate that an internship programestablished by an employer independent of a school in which the work per-formed provides an immediate advantage or benefit to the employer is likelyan employment relationship subject to the FLSA; on the other hand, an in-ternship with school sponsorship that awards academic credits, is less likelyto be accorded employee status.84 While not all employers who offer unpaidinternship opportunities for students will be covered by the FLSA, states mayalso regulate unpaid internships under their wage and hour laws.85

Recently, the Obama administration’s Labor Department vowed to stepup enforcement efforts against employers that illegally fail to pay interns, con-cluding that there should be few circumstances where for-profit companiescan have unpaid internships and be in compliance with federal law.86 It issuedFact Sheet #71 to clarify the Portland Terminal test and to remind employers ofthe criteria for determining whether or not an internship is to be consideredan unpaid position:

1) The internship, even though it includes actual operation of the facilitiesof the employer, is similar to training which would be given in an educationalenvironment; 2) The internship experience is for the benefit of the intern; 3) Theintern does not displace regular employees, but works under close supervision ofexisting staff; 4) The employer that provides the training derives no immediateadvantage from the activities of the intern; and on occasion its operations mayactually be impeded; 5) The intern is not necessarily entitled to a job at theconclusion of the internship; and 6) The employer and the intern understandthat the intern is not entitled to wages for the time spent in the internship.87

the criteria if the totality of the circumstances suggested that the intern or employee was not anemployee. Id.

84Yamada, supra note 46, at 229–30.

85For example, while California adopted the same six criteria, the state labor agency’s guidanceembraced a less strict test that assesses the “totality of the circumstances.” Greenhouse, supranote 48.

86Greenhouse, supra note 48.

87U.S. Dep’t of Labor, Fact Sheet #71: Internship Programs Under the Fair Labor Standards Act (April,2010), available at http://www.dol.gov/whd/regs/compliance/whdfs71.htm [hereinafter FactSheet]. California state law follows the same approach. Lynne M. Hook, Applying the Department ofLabor’s Six Criteria for Unpaid Internships, Los Angeles Law., July-Aug., 2011, at 12.


These criteria only apply to for-profit firms and do not apply to non-profit firms or government organizations.88

Further, according to the Department of Labor, all criteria must bemet. “If all of the factors . . . are met, an employment relationship does notexist under the FLSA, and the Act’s minimum wage and overtime provisionsdo not apply to the intern.”89 Not all courts are in agreement with this char-acterization, and the Supreme Court has not addressed this exclusion sincePortland Terminal.90 Agencies are entitled to deference in their rule-makingcapacity,91 but that requirement does not preclude courts from interpretingstatutes differently.92 As a result, uncertainty still exists concerning whetheror not all six criteria must be met or the totality of the circumstances shouldbe considered.93

In addition to enumerating the criteria, Fact Sheet #71 illustrates howthe criteria should be interpreted and applied. It cautions that internshipsshould be of a fixed duration, which is established prior to the outset of theinternship, and not used as a trial period for individuals seeking employmentat the conclusion of the experience.94 Fact Sheet #71 also directs that “themore an internship program is structured around a classroom or academicexperience as opposed to the employer’s actual operations, the more likelythe internship will be viewed as an extension of the individual’s educationalexperience.”95 It also indicates that this result is more likely to occur in

88Fact Sheet, supra note 87. Individuals at nonprofit firms and government organizations areconsidered “volunteers” and are therefore excluded from the definition of interns. Bacon, supranote 43, at 67–68.

89Fact Sheet, supra note 87.

90Compare Donovan v. Am. Airlines, Inc., 686 F.2d 267 (5th Cir. 1982) (requiring that all sixcriteria be met to avoid a finding of employment) with Reich v. Parker Fire Protection Dist., 992F.2d 1023 (10th Cir. 1993) (using a totality of the circumstances approach instead of requiring allsix criteria to be met).

91Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 837 (1984).

92See Smith v. City of Jackson, 544 U.S. 228 (2005) (departing from the EEOC’s interpretationof the Age Discrimination in Employment Act).

93Curiale, supra note 74, at 1541–48.

94Fact Sheet, supra note 87. “If an intern is placed with the employer for a trial period with theexpectation that he or she will then be hired on a permanent basis, that individual generallywould be considered an employee under the FLSA.” Id.

95Id.


situations “where a college or university exercises oversight over the intern-ship program and provides educational credit.”96

Additionally, Fact Sheet # 71 suggests that internships that provide“skills that can be used in multiple employment settings, as opposed to skillsparticular to one employer’s operation,” are more likely to be viewed astraining and not as employment.97 If the intern “does not perform the routinework of the business on a regular and recurring basis,” then the business isnot dependent upon the work of the intern like it is dependent on the workof its employees.98 In contrast if “interns are engaged in the operations ofthe employer or are performing productive work . . . then the fact that theymay be receiving some benefits in the form of a new skill or improved workhabits will not exclude them from the FLSA’s minimum wage and overtimerequirements.”99

Arguably, the fourth point, which prohibits the employer from gainingimmediate advantage from the intern’s contribution, is a rather perplexingstandard since employers naturally would expect to benefit from the interns’work.100 If the work performed is of no benefit, then where is the experien-tial learning component?101 Several Labor Department rulings suggest thatas long as the internship is a prescribed part of the curriculum and is pre-dominantly for the benefit of the student, the mere fact that the employerreceives some benefit from the student’s services does not make the studentan employee for purposes of wage and hour law.102

While the third point is designed to ensure temporary unpaid employ-ees do not displace permanent employees, the ambiguity of the guidelinespermits employers to replace workers with unpaid interns, which typicallyoccurs when the market is competitive and the economy is down.103 FactSheet #71 states that if interns are used as substitutes for regular workers orto augment the workforce during specific time periods, the exclusion is not

96Id.

97Id.

98Id.

99Id.

100Grant, supra note 15.

101See supra notes 17–32 for a discussion of experiential learning.

102Damast, supra note 50.

103Bacon, supra note 43, at 82.


applicable.104 Similarly, an intern’s receipt of “the same level of supervisionas the employer’s regular workforce,” suggests “an employment relationship,rather than training.”105 Fact Sheet #71 also postulates that “if the employer isproviding job shadowing opportunities that allow an intern to learn certainfunctions under the close and constant supervision of regular employees,but the intern performs no or minimal work, the activity is more likely to beviewed as a bona fide education experience.”106 Again, it seems questionablehow the performance of no or minimal work ever could constitute a bona fideeducational experience.

In reality, most internships likely could be in violation of at least oneof the criteria, so presumably many employers with unpaid interns would beunable to avoid a finding of employee status by the Labor Department.107

While the Department of Labor may be committed to the policies underly-ing Fact Sheet #71, enforcement as a practical matter may be challenging.Interns are reticent to report violations because they want to be viewed asplayers, not troublemakers, and they do not wish to burn their bridges intheir first professional outing.108 Nevertheless, recently, two unpaid internswho worked on the film Black Swan, filed a class action lawsuit against FoxSearchlight, claiming it violated minimum wage laws and alleging that thestudio is profitable due to the tight control it exercises over the budgets ofits small-scale productions and their costs, accomplished in part through theemployment of a steady stream of unpaid interns.109 The flip side to thisissue, of course, is if students do begin testing their rights under the FLSA,these gateway opportunities simply may dry up instead of transitioning to

104Fact Sheet, supra note 87. “If the employer would have hired additional employees or requiredexisting staff to work additional hours had the interns not performed the work, then the internswill be viewed as employees and entitled compensation under the FLSA.” Id.

105Id.

106Id.

107Yamada, supra note 46, at 232. Volunteers could face similar consequences. Kelly Jordan, Note,FLSA Restrictions on Volunteerism: The Institutional and Individual Costs in a Changing Economy, 78Cornell L. Rev. 302 (1993) (arguing that Congress should amend the FLSA to allow individualsto perform volunteer services that are currently prohibited but yet are consistent with the Act’soriginal purpose).

108Bacon, supra note 43, at 82.

109Marisa Taylor, Unpaid Interns Strike Back by Suing Fox, The Bottom Line on NBCNews.com(Sept. 29, 2011), available at http://bottomline.msnbc.msn.com/_news/2011/09/29/8039630-unpaid-interns-strike-back-by-suing-fox.


paid positions.110 That consideration aside, rights under the FLSA are notthe only federal statutory protections that may not be available to unpaidstudent interns.

B. Civil Rights Legislation

Aside from not having the protections of the FLSA, unpaid interns maynot be protected under other laws designed to ensure a fair and equitablework environment.111 For example, Title VII of the Civil Rights Act of 1964makes it an unlawful employment practice for an employer to discriminateagainst any individual with respect to compensation, terms, conditions, orprivileges of employment, because of such individual’s race, color, religion,sex, or national origin.112 Harassment can be a form of discrimination underTitle VII,113 including harassment based upon sex.114 A sufficiently hostile at-mosphere can result in a change in the terms and conditions of employment,which culminates in disparate treatment.115 In employment relationshipsthe employer can be held liable for workplace harassment committed bysupervisors and co-workers.116 Sadly, interns are more susceptible to sexual

110Bacon, supra note 43, at 83–84. See also Hilary Stout, The Coveted but Elusive Summer Intern-ship, N.Y. Times (July 2, 2010), available at http://www.nytimes.com/2010/07/04/fashion/04Internship.html (recanting stories of prospective interns finding position subsequent to theissuance of Fact Sheet #71).

111In addition to the FLSA and civil rights laws, interns generally do not qualify for protectionsunder the National Labor Relations Act because they are not considered employees, or stateworker compensation acts for that same reason. Yamada, supra note 46, at 251–56.

11242 U.S.C. § 2000e-2(a) (2012).

113Rogers v. EEOC, 454 F.2d 234, 238–39 (5th Cir. 1971), cert. denied, 406 U.S. 957 (1972);Patterson v. McLean Credit Union, 491 U.S. 164, 180 (1989). For a doctrinal discussion as towhy harassment can be considered a form of disparate treatment, see Kathryn Abrams, The NewJurisprudence of Sexual Harassment, 83 Cornell L. Rev. 1169 (1998); Katherine M. Franke, What’sWrong with Sexual Harassment?, 49 Stan. L. Rev. 691 (1997); Vicki Schultz, Reconceptualizing SexualHarassment, 107 Yale L.J. 1683 (1998).

114Williams v. Saxbe, 413 F. Supp. 654 (D. D.C. 1976), vacated sub nom., Williams v. Bell, 587F.2d 1240 (D.C. Cir. 1978); Barnes v. Costle, 561 F.2d 983 (D.C. Cir. 1977); Bundy v. Jackson,753 F.2d 141 (D.C. Cir. 1981). See also Catharine A. MacKinnon, Sexual Harassment ofWorking Women: A Case of Sex Discrimination (1979) (defining and explaining quid proquo and hostile environment cases).

115Meritor Savings Bank v. Vinson, 477 U.S. 57, 60 (1986).

116Burlington Indus., Inc. v. Ellerth, 524 U.S. 742, 753–54 (1998); City Faragher of Boca Raton,524 U.S. 775, 807 (1998).


harassment than full-time employees, and scandals abound in Washingtonand elsewhere to prove that point.117 However, the statutory protections onlyapply to employees,118 and unpaid interns are usually not considered em-ployees.119

In O’Connor v. Davis the Second Circuit determined that an intern whocomplained of sexual harassment was not covered under Title VII and itssexual harassment case law because she was not an employee.120 The plaintiff-student majored in social work and was required to perform two hundredhours of fieldwork at one of several approved organizations.121 She receivedfederal work-study funds for the time she spent performing her requiredinternship.122 The court did not consider the merits of her harassment com-plaint because it determined she was not an employee under Title VII. Theappeals court did not find that she was ever hired for any purpose.123 Further,there was no financial benefit obtained by the purported employee from theemployer, an essential condition to the existence of an employer-employeerelationship.124

The court also concluded that she was not covered by the antidiscrim-ination provisions of Title IX of the Civil Rights Restoration Act because


118The statutory definition of employee is elusive; however courts employ various tests to deter-mine whether or not a worker is a protected employee under Title VII. See Tara Kpere-Daibo,Note, Employment Law-Antidiscrimination-Unpaid and Unprotected: Protecting Our Nation’s VolunteersThrough Title VII, 32 U. Ark. Little Rock L. Rev. 135, 142–49 (2009) (discussing the commonlaw agency test, the economic realities test, the hybrid test and benefits analysis test). See alsoOrtner, supra note 44, at 2627–38 (providing an overview of judicially created tests for definingemployees under Title VII); Mitchell H. Rubinstein, Our Nation’s Forgotten Workers: The UnprotectedVolunteers, 9 U. Pa. J. Lab. & Emp. L. 147 (2006) (discussing judicial tests for defining a statutoryemployee and how they apply to volunteers).

119See, e.g., Beverley v. Douglas, 591 F. Supp. 1321 (S.D.N.Y. 1984) (dismissing a medical intern’sTitle VII claim that she was denied privileges due to her race and sex because she was not anemployee); Smith v. Berks Cmty. Television, 657 F. Supp. 794, 794-96 (E.D. Pa. 1987) (denyinga television station intern’s Title VII claim because she was not paid but contributed assistanceon a purely voluntary basis).

120O’Connor v. Davis, 126 F.3d 112 (2d Cir. 1997).

121Id. at 113.

122Id.

123Id. at 116.

124Id. at 115–16. Moreover, she received no employee benefits such as health insurance, vacation,or sick pay, nor was she promised any such compensation. Id. at 116.


the organization was not a covered “education program or activity.”125 Thecourt observed that “the term ‘education’ is not defined by the regulationsgoverning Title IX,” but even assuming that the employer provided a genreof vocational instruction, it could not be characterized as operating an orga-nized vocational educational program under the regulatory definitions sinceits primary purpose as an entity was not of an educational nature.126 Further,the college’s educational purpose could not be imputed to the employerunder Title IX “simply because O’Connor was a student at the former whileshe performed volunteer work with the latter.”127

On the other hand, if an educational institution sponsors an internshipprogram, for example, by approving internship sites, requiring internshipsfor a degree program, collecting tuition and awarding credit, and enteringinto internship agreements that specify obligations and responsibilities, then,arguably, internships are educational programs covered by Title IX.128 More-over, the university could be liable based upon the contract between theuniversity and student, or upon the student being a third party beneficiaryto the contract between the university and the employer, depending on thespecific circumstances of those agreements.129 Thus, institutions of highereducation should develop and implement procedures to monitor discrimina-tion by third parties operating internship programs and to sever connectionswith problematic placements.130

Unfortunately, colleges and universities are not in a prime positionto monitor closely the conduct of employers and employees in an off-site

125Id. at 118–19. Educational institutions that receive federal funds are subject to Title IX,which provides that “no person in the United States shall, on the basis of sex, be excludedfrom participation in, be denied the benefits of, or be subjected to discrimination under anyeducation program or activity receiving Federal financial assistance . . . ” 20 U.S.C. § 1681(a)(2012). The Education Amendments of 1972 define “program or activity” as including “all ofthe operations” of private or public post-secondary institutions that receive federal funds. 20U.S.C. § 1687 (2012).

126O’Connor v. Davis, 126 F.3d 112, 118 (2d Cir. 1997).

127Id.

128Cynthia Grant Bowman & MaryBeth Lipp, Legal Limbo of the Student Intern: The Responsibility ofColleges and Universities to Protect Student Interns Against Sexual Harassment, 23 Harv. Women’s L.J.95, 114–15 (2000).

129Id. at 122–29.

130Id. at 115. The failure to do so, however, would not result in a damage award absent proof ofcontrol. Id. at 118–20.


internship placement, nor do they have the legal authority to insist that aninternship provider implement preventive measures to reduce the likelihoodof sexual discrimination or harassment.131 Furthermore, given the inabilityof the educational institution to control the employment environment of thestudents, employers would not be considered agents of the university so as toimpute primary liability; the entities remain separate.132 These realities putinterns at risk for discriminatory treatment and harassment.

State courts have reached the same conclusion about the employmentstatus of interns and have not classified interns as employees under theirstate antidiscrimination statutes.133 Arguably, these results are unjust,134 andCongress should amend federal employment statutes to cover unpaid internsand volunteers, and states should pass general antidiscrimination statutesthat protect all workers from discrimination.135 But for now, neither in-terns nor volunteers are afforded the statutory protections of civil rightslaws.136 Nevertheless, employers do owe an ethical obligation to see thatthese basic human rights protections, which are afforded to other employ-ees, extend to all workers.137 Employers also should bear in mind that an

131Yamada, note 46, at 249.

132The Second Circuit noted in O’Connor that there was only hint of a connection between thecollege and the employer, which involved placing the intern at the facility and relying in parton the supervisor’s performance for awarding course credit. O’Connor v. Davis, 126 F.3d 112,118 (2d Cir. 1997). While the court examined the connection for Title IX purposes, the sameobservations are instructive under agency and employment law.

133See, e.g., Lowery v. Klemm, 845 N.E.2d 1124 (Mass. 2006) (refusing to extend state civil rightsprotections to volunteers and unpaid interns); Lipphold v. Duggal Color Projects, 1998 U.S. Dist.LEXIS 335 (S.D.N.Y. Jan. 15, 1998) (dismissing an unpaid student intern’s sexual harassmentclaim because she was not an employee under New York law).

134“Market forces that permit many employers to get away with denying interns salary shouldnot also grant employers immunity from legitimate Title VII claims.” Ortner, supra note 44, at2647.

135James J. LaRocca, Note, Lowery v. Klemm: A Failed Attempt at Providing unpaid Interns and Volun-teers with Adequate Employment Protections, 16 B.U. Pub. Int. L.J. 131, 142–44 (2006); Kpere-Daibo,supra note 118, at 148–54; Yamada, supra note 46, at 240–48.

136See Kpere-Daibo, supra note 118 (lamenting the fact that the lack of statutory protectionsafforded to unpaid workers despite the increasing necessity of volunteer and intern experiencefor individuals).

137“Strictly from a public policy standpoint, the discrimination or harassment of any worker–paidor unpaid–is wrong and should be prohibited, prevented, and punished.” Id. at 150.


internship program “is supposed to be largely for the interns’ advantage andedification.”138

Moreover, an educational institution that entrusts a portion of cur-riculum to a third party should monitor the student’s experience while oninternship, establish procedures for reporting complaints of discrimination,and investigate all complaints promptly.139 Unfortunately, it is doubtful thatcolleges and universities universally exercise sufficient vigilance in overseeingthe quality of the internship experience and the ethical environment in whichtheir students are placed, in order to ensure that result.140 While the legalprotections afforded interns may be slim, both employers and educationalinstitutions should be mindful of ethical obligations to the workers who arenot compensated monetarily and who are not considered to be employees ofthe firm.

IV. Ethical Concerns

Ethical concerns about unpaid internships revolve around whether or not therelationship is exploitive or mutually beneficial and symbiotic. That discus-sion may explore practical considerations, such as whether or not the unpaidstatus perpetuates social-economic class divides, or more philosophical, ques-tioning whether or not society as a whole benefits from unpaid student workplacements. The following sections discuss these and other ethical perspec-tives concerning unpaid internships.

A. Practical Issues with Ethical Implications

A minimum wage may be defined as that subsistence that is absolutely req-uisite for keeping a worker in bare existence.141 If interns are not paidthe minimum quantum of subsistence, then is their economic support

138Josh Spiro, How to Manage Interns, Inc., Apr. 22, 2010, available at http://www.inc.com/guides/2010/04/managing-interns.html (offering tips for managing an effective and mutuallybeneficial internship program).

139Bowman & Lipp, supra note 128, at 128–31.

140Perlin, supra note 14.

141Robert C. Tucker, The Marx-Engels Reader 347 (1972).


unnecessary?142 The ethical obligation to pay workers a living wage is at theheart of the historical movement in favor of minimum wage legislation.143

State minimum wage laws, which preceded the FLSA, addressed the persis-tence of sweatshops in which women and children who were not the primarysource of income for the household were paid wages below what was necessaryto sustain themselves on their own, that is, a living wage.144 Today’s living wagemovement champions a variety of employment empowerment issues beyondthe minimum wage rate, including performance-based discharge, seniority,and benefits, in addition to economic inequality.145

It seems axiomatic and obvious that the use of unpaid labor, albeitseemingly voluntary, ethically is suspect unless otherwise justified. As onenews media personality unabashedly claimed, “I’ve built my career on un-paid interns,” justifying that gain by the richness of his mentoring.146 Butbeyond learning at the feet of the wise, the receipt of academic credit for theinternship in lieu of wages arguably mitigates the deviation from the normof payment for services rendered, particularly in cases where the internshipis optional and not required for the completion of the degree program.However, many programs of study mandate an internship as a graduation

142Indeed, the economic feasibility of being able to perform an unpaid internship has socioe-ceonomic class implications. See infra notes 147–154 and accompanying text.

143See Seth D. Harris, Conceptions of Fairness and the Fair Labor Standards Act, 18 Hofstra Lab. &Emp. L.J. 19 (2000) (discussing in the historical development of minimum wage legislation aspart of a conceptual debate over fairness in wages).

144N. Scott Arnold, Imposing Values: An essay on Liberalism and Regulation 202 (2009).

145Scott L. Cummings & Steven A. Boutcher, Civil Rights and the Low-Wage Worker: Article: Mobi-lizing Local Government Law for Low-Wage Workers, 2009 U. Chi. Legal F. 187, 192–196 (2009).See also David L. Gregory, The Problematic Employment Dynamics of Student Internships, 12 N.D. J.L. Ethics & Pub Pol’y 227, 237–40 (1998) (discussing moral foundations of the living wagemovement); Rachel Harvey, Note, Challenges to the Living Wage Movement: Obstacles in a Path toEconomic Justice, 14 U. Fla. J.L. & Pub. Pol’y 229, 248–51(2003) (discussing economic studiesabout the impact of living wage ordinances and employment rates); William Quigley, Full-TimeWorkers Should Not Be Poor: The Living Wage Movement, 70 Miss. L.J. 889 (2001) (describing andadvocating the local, grassroots living wage movement); Stephanie Wagner, Note, Big Box LivingWage Ordinances: Upholding Our Constitutive Commitment to a Remunerative Job, 15 Geo. J. PovertyLaw & Pol’y 359, 369–73 (2008) (discussing the need to regulate wages paid at big box retailstores like Wal-Mart or Target).

146Stout, supra note 110.


requirement;147 thus, if the only available opportunity is unpaid and an in-ternship experience is required, just how voluntary is the work?

Note also that institutions of higher education typically receive tuitionfor these credits without having to provide classrooms, equipment, or sub-stantial instruction from a professor. Collecting tuition from the student inexchange for the privilege of working without remuneration might be justifi-able if the college plays a central role in securing the internship and ensuringa substantive academic experience in a quality work environment, but cam-pus career centers do not uniformly monitor and reassess all placements orvisit students’ workplaces.148

Another ethical concern is that unpaid internships are a disproportion-ate burden for students in lower socioeconomic classes.149 Certainly, studentsin higher income classes have greater access to funds for subsistence duringthe period of the unpaid internship than lower income students, so the hard-ship is greater on the latter group.150 Who but the economically advantagedcan afford to pay tuition and living costs while working without remuner-ation? There are numerous examples of students in higher socioeconomicclasses being able to intern without pay, which allows them to gain an ad-vantage over their lower-income competitors; consequently, economicallydisadvantaged students remain impeded their upward mobility.151 In fact,the practical necessity of having experience in order to secure employment“raises a troubling class divide between entry-level jobseekers who can affordthe luxury of unpaid experience and those who cannot.”152

147Schoepfer & Dodds, supra note 24, at 183. The majority of sport management programsrequire such an experience for graduation. Id. The sport management internship, however, isno longer required for program accreditation as a capstone experience or comprehensive exammay also be used to demonstrate an integrative experience. Id. at 189.

148Perlin, supra note 14. “Colleges have turned internships into a prerequisite for the professionalworld but have neither ensured equal access to these opportunities, nor insisted on fair wagesfor honest work.” Id.

149Questioning the Ethics, supra note 47.


151Steven Greenhouse, The Unpaid Intern, Legal or Not, N.Y. Times, Apr. 2, 2010, available athttp://www.nytimes.com/2010/04/03/business/03intern.html.

152Curiale, supra note, 74, at 1534.


The plight of these economically disadvantaged interns is reminiscentof that of the two-tiered apprenticeships of past centuries153 as other issuescomplicate the equation. Less economically advantaged students who areable to accept an unpaid position usually must work part time, encumbertheir future with additional loans, and skip meals.154 Notably, the rising costof postsecondary education coupled with the added dimension of an unpaidinternship are “part of an overall calculus that affects the student’s educa-tional and curricular choices, future employment options, current and futurestandards of living, and personal stress levels.”155 Consider also the degreeto which taxpayer-supported governmental subsidies in the form of studentloans are subsidizing free labor at for-profit businesses with internships thatearn college credit. Additionally, unpaid internships may contribute indi-rectly to rising unemployment because of the displacement of wage earnersby interns.156 Considering all of these issues, are unpaid internships inher-ently suspect from an ethical perspective?

B. Theoretical Considerations

Assuming that an unpaid internship is legal under specific circumstances,what are the ethical implications of not paying someone for services ren-dered? Is the internship experience a legitimate investment in human capitalthat eventually will produce economic returns for the intern and society?157

Or is the receipt of gratuitous services exploitive, despite the fact that anunpaid internship may be a learning experience?158 The economist DavidRicardo recognized that labor has an exchange value and that different typesof labor have different exchange values.159 If interns are not compensated

153See supra notes 4–10 and accompanying text (discussing voluntary and involuntary appren-ticeships).

154Curiale, supra note 74, at 1536.

155Yamada, supra note 46, at 224.

156Curiale, supra note 74, at 1534.

157See Robert Sudgen & Alan Williams, Frank Knight on Capital as the Only Factor of Production, 10J. Eco. Issues 605 (1976) (discussing the importance of investment in human capital).

158See Gregory, supra note 145, at 241–45 (arguing that the use of unpaid interns is inherentlyexploitive).

159Karl Marx, A Contribution to the Critique of Political Economy 61 (S.W. Ryazanskayatrans.,Maurice Dobb ed., 5th ed. 1984).


the exchange value of their work, is their work valueless? Alternatively, ifthe price of labor may be defined as being an amount sufficient to inducea laborer to give up leisure time to work,160 is the intern’s leisure time ofno consequence? Or should the exchange value be defined to include thenonmonetary benefits derived from the educational experience?

Presumably, unpaid interns who are not coerced into service must beacting in their self-interest or they would not participate. If students are notcoerced, then to deny them the opportunity to work in an unpaid internshipposition is to deny them the exercise of their own free will. On the other hand,is working in an unpaid internship truly voluntary if it is the primary meansto achieve permanent paid employment, without which their educationalpursuits are for naught? Certainly if an internship is required in a degreeprogram, the characterization of an unpaid experience as being an exerciseof the student’s free will is inherently suspicious. Nevertheless, if both theintern and the employer receive some benefit, then there is reciprocity inthe relationship and the unpaid internship is ethical; however, if there is noremuneration or reciprocal benefit for the rendering of services for whichthere is no monetary compensation, then the relationship is exploitative andunethical.161 In other words, assuming that the acquisition of knowledge andskills has economic value,162 then arguably there is reciprocity.

Jurisprudential schools of thought are instructive in evaluating theseemingly questionable nature of working for free as an intern. The positivistschool of thought emphasizes that what behavior is moral and ethical followswhat positive or legitimately enacted laws require.163 The FLSA requires thatpayment should be made for services rendered with some exceptions, oneof which is an educational internship program established for the benefit ofthe trainee, which does not displace workers, provides no immediate benefitto the employer, and guarantees no permanent position. Thus, an unpaid

160Robert Sudgen & Alan Williams, The Principles of Practical Cost-Benefit Analysis95 (1978).

161See William A. French & John Granrose, Practical Business Ethics 41–50 (1995) (dis-cussing reciprocity versus exploitation).

162Boel Berner, ‘Human Capital’ Manpower Planning and Economic Theory: Some Critical Remarks,17 Acta Sociologica 236, 241 (1974).

163For a discussion of positive law’s structural bent, the separation from morality in its reasoning,see Edward J. Conry & Caryn Beck-Dudley, Meta-Jurisprudence: A Paradigm for Legal Studies, 33 Am.Bus. L.J. 691, 700–04 (1996).


internship, which shares these enumerated characteristics, would be ethicalunder this theory of jurisprudence.

In contrast, natural law proponents, like deontological ethicists, seek totranscend the limitations of existing positive law in a legal system in search ofa moral imperative and in favor of doing what is virtuous.164 Therefore, whilean unpaid internship may pass muster under statutes and regulations, from anatural law perspective, the notion of creating value with no immediate remu-neration in the current medium of exchange, and the requirement of payingtuition for the privilege, still may be infirm from a moral perspective. Fur-ther, the provision of services by interns arguably should be compensated ata rate comparable to those same services provided by other employees of thecompany because it is the right thing to do from an equitable perspective.165

In contrast, utilitarianism, like teleological ethics, focuses on conse-quences and also examines the value-added to society from legal structuresand principles, striving to produce the greatest good for the greatest numberof individuals.166 Clearly, from a utilitarian perspective, a properly structuredunpaid internship can benefit all actors in the relationship. Interns gainhands-on experience that otherwise may not be available to them at such anearly stage in their careers. Also, they are able to augment their hard and softskill sets dramatically, providing the internship is a valid instructional oppor-tunity. Employers benefit because they are able to network with prospectiveemployees and establish relationships with educational institutions, whichmay lead to better-prepared graduates. Educational institutions benefit fromthose closer ties to the employment community and can transfer some capi-tal overhead costs to the employer through internships as well. Thus, if theparties are satisfied with the bargain, no one is being exploited, and the par-ties are benefiting from the arrangement, then it is ethical and producing asocietal good.167

164For a discussion of natural law theory, see Edward J. Conry & Caryn Beck-Dudley, LegalReasoning and Practical Reasonableness, 33 Am. Bus. L.J. 91, 96–108 (1996).

165See French & Granrose, supra note 161, at 7 (discussing renowned psychologist LawrenceKohlberg’s six stages of moral development).

166Gerald R. Ferrera, Ethics in the Legal Environment: An Augmentation of Legal Realism, 9 J. LegalStud. Educ. 161, 167 (1991).

167Conforming to the legal requirements of society and adhering to the social contract arguablyprovides the greatest good for the greatest number of people. See French & Granrose, supranote 161, at 6 (discussing Kohlberg’s six stages of moral development).


On the other hand, legal realists, who take into account social realitiesin their jurisprudential view,168 no doubt would note the stark reality thatclass divides are enhanced if unpaid internships are the conduits to success-ful careers because some students cannot afford the luxury of working forfree. What, then, are the implications of these different viewpoints of the phi-losophy of law from a policy perspective, and can they be resolved to producea recommendation for a desirable outcome?

V. Policy Recommendations

The pedagogical, legal, and ethical imperatives of unpaid internships seemharmonized in favor of one outcome: the internship must produce a richlearning experience for the unpaid student, to whom the primary benefitof the relationship must inure. The relationship between the institution, thestudent, and the employer should be symbiotic. To ensure that the primarypurpose of the internship will be educational and that interns will not per-form menial tasks, one commentator recommends that a student intern ina school-sponsored internship program should not be considered an em-ployee under the FLSA if “1) academic credit is granted; 2) the educationalinstitution is able to require, as a condition of an internship experience,that the work to be performed by the student will develop skills specificallyrelated to the student’s educational program; and 3) the educational insti-tution assigns one of its own administrators or faculty members to oversee(though not necessarily directly supervise) the student’s internship.”169 To besure, educational institutions must actively monitor such experiential learn-ing programs, and “place students in secure and productive environmentsthat further their education.”170

As discussed previously, internships provide opportunities for studentsto gain task and environmental knowledge transfer.171 The internship allowsstudents to be exposed to work realities that the classroom experience canexamine only hypothetically. However, for true learning to transpire, there

168For a discussion of legal realism, see Ferrera, supra note 166, at 162–70.

169Yamada, supra note 46, at 236.

170Joseph E. Aoun, Protect Unpaid Internships, Inside Higher Ed., July 13, 2010, available athttp://www.insidehighered.com/views/2010/07/13/aoun.

171See supra notes 34–42 and accompanying text.


must be supervision from the faculty members of the credit-granting institu-tion, who provide appropriate assignments designed to demonstrate learningsupported by a pedagogical foundation that augments the skills and abilitiesknowledge gained through practice. To be a valid educational experienceand not simply work, an internship must include a demonstrable assuranceof learning outcomes assessment. While the student may learn some envi-ronmental knowledge about the business, if there is limited addition to theskills and abilities knowledge of the student, it is work and not an educationalexperience. Therefore, colleges and universities must commit to “developinga strong network of employers who regularly provide employment opportu-nities for students . . . and should require employers to provide detailed jobdescriptions that set clear expectations.”172

The educational institution should be involved in the screening of in-ternship opportunities, periodically monitor workplaces, continually updateand evaluate the nature of the work being performed by student interns, andinvestigate possible problems in order to remove problem employers fromthe list of approved sites.173 Since statutory revisions to Title VII and Title IXare not likely to include unpaid student interns among the protected classesin the near future,174 educational institutions should accept the ethical obli-gation to police the internship experience for violations of civil rights and tocensure or eliminate those employers that do not respect equality of treat-ment from participation. Placement centers also should monitor the value ofthe experience by routinely reviewing advertisements for internship positionsto evaluate critically the list of specific tasks an intern will be expected to com-plete during the internship experience. The length of the internship shouldbe monitored as well, so that its duration does not result in undue economichardship on the student of limited means. Undoubtedly, unpaid internshipsmust be optional and not mandatory. While an internship experience, albeitunpaid, may be recommended by the degree-granting institution, the cur-riculum established should not require an intern to work without pay, evenif the educational experience is sufficiently valid.

Finally, it is the credit-granting educational institution that must exer-cise careful oversight of the experience. The internship experience should

172Aoun, supra note 170.

173Gregory, supra note 145, at 244.

174For a discussion antidiscrimination legislation and unpaid interns who are not covered em-ployees, see supra notes 111–140 and accompanying text


be academically rigorous by requiring a student to fulfill various require-ments such as a research paper on a specific aspect of the experience ora project-based reflective-learning activity or a required journal that linksgoals and accomplishments.175 Journaling provides a meaningful reflectiveexercise that facilitates the digestion of relevant experiences in the contextof educational goals and objectives.176 But whatever the academic exercise,the internship assignment should be evaluated holistically.177 Additionally,student focus groups can be an appropriate vehicle for soliciting relevantfeedback about the entire experience and for discovering concerns in a con-sistent and timely manner.178

Unfortunately, faculty members frequently are assigned internshipcourses as additions to their teaching load with little or no supplementalcompensation for, or recognition of, their effort. In other words, the institu-tion collects tuition for a service it intends to summarily assign to a facultymember in a perfunctory manner. That faculty member then acts as merelya point of contact, while the institution in essence intends to pass alongthe educational responsibility to an employer who has no legal obligationto produce teaching and learning outcomes. Internships cannot remain anuncompensated add-on if faculty must design, monitor, and assess learninggoals based on valid objectives.179 The efforts of faculty members devoted tointernship supervision should be legitimate and credited toward their work-load, while students should engage in structured reflection on the contentof the skills and abilities training as well as on social skills and the ethics

175Schoepfer & Dodds, supra note 24, at 186.

176For a discussion of the benefits of journaling generally, see, e.g., Patricia A. Connor-Greene,Making Connections: Evaluating the Effectiveness of Journal Writing in Enhancing Student Learning,Teaching Psych., Winter 2000, at 44–46; Anne Hume, Promoting Higher Levels of Reflective Writingin Student Journals, Higher Educ. Res. & Devel., June 2009, at 247–60.

177Rubrics may be used to evaluate the experience. For an overview of the use and developmentof rubrics, see Y. Malini Reddy & Heidi Andrade, A Review of Rubric Use in Higher Education, 35Assessment & Eval. Higher Educ. 435 (2010).

178For a discussion of the overarching principles of feedback practices, see David Nicol & DebraMcFarlane-Dick, Formative Assessment and Self-Regulated Learning: A Model and Seven Principles ofFeedback Practice, Stud. Higher Ed., Apr. 2006, at 205–15.

179For validity, internships should provide real-world authenticity, a time for reflection, evidenceof monitoring, and opportunity for feedback, as well as assessment, evaluation, and a means ofdocumenting outcomes in order to assure learning. See supra notes 30–32 and accompanyingtext.


of the working environment. In sum, universities must be responsible part-ners with students and employers in the internship experience. Pedagogical,legal, and ethical concerns dictate that the unpaid internship cannot be aresource-neutral course for the institution.

VI. Conclusion

The primary beneficiary of the unpaid internship must be the student froma pedagogical, legal, and ethical perspective, although this obligation doesnot preclude the employer from benefitting. Students who have little or noexperience provide fresh eyes on a job, not clouded by prior experience orexisting bias. In essence, by being a novice, they must search for answersrather than rely on existing schema. This search can result in novel and in-novative approaches that benefit the employer. By the same token, internsbenefit from the modeling of behaviors, from exposure to task and environ-mental knowledge, and from augmenting the skills and abilities knowledgelearned in course work. This reciprocity of benefits suggests the relationshipis an ethical one but only if the experience is enriched through the super-vision of faculty members of the credit-granting institution, who insist uponthe integration of learning, assess and monitor results, and provide timelyfeedback. The law requires that an unpaid internship be similar to training inan educational environment and benefit the intern primarily; that directivecan be achieved with proper pedagogical structure and appropriate oversightby the educational institution. Ultimately, however, it is the credit-granting,tuition-receiving college or university that must accept responsibility as thethird-party arbiter for the pedagogical, legal, and ethical legitimacy of theinternship experience.

the pedagogical, legal, and ethical implications of unpaid internships

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