Opinion ID: 4527763
Heading Depth: 2
Heading Rank: 1

Heading: Vaughn’s FLSA Claims

Text: The District Court properly applied Glatt on remand in holding that Vaughn was not an employee of Phoenix House for the purposes of the FLSA. 14 In Glatt, we addressed the question of whether an unpaid intern qualifies as an employee entitled to compensation under the FLSA, 15 and we extend that analysis to the analogous circumstances presented in this case. Assessing the nature of the relationship between an intern and his employer, we concluded in Glatt that “the proper question is whether the intern or the employer is the primary beneficiary of the relationship.” 16 The “primary beneficiary test” has “three salient features:” (1) its “focus[ ] on what the intern receives in exchange for his work,” (2) its “flexibility to [permit] examin[antion] of the economic reality” of the relationship, and (3) its acknowledgement 12Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007); see also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). 13 Iqbal, 556 U.S. at 678. “The FLSA unhelpfully defines ‘employee’ as an ‘individual employed by 14 an employer.’” Glatt, 811 F.3d at 534 (quoting 29 U.S.C. § 203(e)(1)). 15 See id. at 535. 16 Id. at 536. 7 that the intern-employer relationship is subject to unique considerations in light of the intern’s expected “educational or vocational benefits that are not necessarily expected with all forms of employment.” 17 In performing this analysis, we ask the district courts to evaluate a “non-exhaustive set of considerations,” which include: 1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa. 2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions. 3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit. 4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar. 5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning. 17 Id. 8 6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern. 7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship. 18 We emphasized that “[n]o one factor is dispositive and every factor need not point in the same direction for the court to conclude that the intern is not an employee entitled to the minimum wage.” 19 In carefully weighing each of these considerations in the context presented by Vaughn’s circumstances—in which he is not an intern, but a recipient of in-patient treatment in a court-approved rehabilitation program—the District Court properly assumed that all of Vaughn’s allegations were true 20 and correctly determined that Factors One, Five, and Seven weigh “strongly” against finding that Vaughn was an employee of Phoenix House; Factor Six weighs in 18 Id. at 536–537. 19 Id. at 537. 20 See Vaughn v. Phoenix House Foundation, Inc., 2019 WL 568012, at  n.1 (S.D.N.Y. Feb. 12, 2019) (noting that the “facts are taken from the TAC and are accepted as true for the purposes of this motion to dismiss”); see also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007))). 9 Vaughn’s favor; and Factors Two, Three, and Four provide “mixed guidance.” 21 As the District Court rightly noted, however, the importance of Factor Six in the context of this case differs from that of an unpaid intern. 22 And Vaughn received significant benefits from staying at Phoenix House, in large part because he was permitted to receive rehabilitation treatment there in lieu of a jail sentence, and was “provided with food, a place to live, therapy, vocational training, and jobs that kept him busy and off drugs.” 23 Inasmuch as we agree with the District Court’s careful analysis of the Glatt factors in the context of Vaughn’s stay at Phoenix House, we cannot conclude that, in these circumstances, Vaughn was an employee of Phoenix House. Accordingly, Vaughn cannot state a claim under the FLSA. Because the District Court properly dismissed Vaughn’s FLSA claims, the only claims over which it had original jurisdiction, it did not abuse its discretion by declining to exercise supplemental jurisdiction over his NYLL claims. 24 21 Id. at . 22 See id. (“In contrast to Phoenix House’s treatment facilities, which operate for the exclusive purpose of providing drug and alcohol addiction treatment … places of employment that hire interns or vocational trainees most often operate for some purpose other than to provide training to their unpaid interns.” (internal citation and quotation marks omitted)). 23 Id. 24 See Kolari v. N.Y.-Presbyterian Hosp., 455 F.3d 118, 122 (2d Cir. 2006) (“A district court may decline to exercise supplemental jurisdiction if it has dismissed 10