Coach, Inc. is the latest company to be sued for allegedly misclassifying its unpaid interns. Former intern, Johnetta Campbell has filed suit against the New York-based brand, alleging that she was misclassified as an intern when she worked in Coach, Inc.’s Manhattan Office from January to March 2012. According to Campell's complaint, which was filed last month in the Supreme Court of the State of New York, County of New York, she worked five days a week, from five to eight hours per day. During that time, she "developed and maintained fabric and trend boards weekly and seasonally, assisted the team in researching new trends or fabrics, worked in the brand's warehouse, and other similar tasks necessary to the operation” of the business Moreover, Campbell alleges in her wage and hour class action lawsuit that Coach had started this practice to minimize labor costs, and to retain a higher profit value.
Unlike the majority of unpaid intern lawsuits, which are filed on grounds of both federal and state labor and wage violations, Campbell is claiming violations of New York state law, and not of the Fair Labor Standards Act. By now, you are likely familiar with the standards that the Department of Labor set out for determining whether an individual should be characterized as an intern or an employee. These factors include:
1) The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
2) The internship is for the benefit of the intern;
3) The intern works under close staff supervision and does not displace regular employees;
4) The employer derives no immediate advantage from and may in fact be impeded by the intern;
5) The intern is not necessarily entitled to a job after the internship; and
6) The employer and the intern understand that the intern is not entitled to wages.
If these six factors are not met in their entirety, an intern is deemed to be an employee in accordance with the Department of Labor, and must be paid at least minimum wage. New York state law, however, implements a strict eleven-factor test, which extends to the internship screening process, internship agreement specifics, and other factors. The additional requirements set forth by New York state include:
1) Interns be notified in writing that they will not receive any wages and are not considered employees for minimum wage purposes.
2) Any clinical training is performed under the supervision and direction of people who are experienced in the activity.
3) The interns do not receive employee benefits.
4) The training is general and qualifies interns to work in any similar businesses in the industry.
5) Advertisements, postings, or solicitations for the internship program clearly discusses the educational benefits rather than employment, although employers may indicate that qualified graduates may be considered for employment.
No word yet on whether Campbell, who is currently employed as a "Freelance Assistant Buyer" at Saks Fifth Avenue (according to her LinkedIn page) will be filing similar unpaid internships against the other two companies where she has interned: Walter Baker and Michael Kors.
As for Coach, though, Capmbell is seeking minimum wage compensation for all hours worked during her "internship" period, as well as liquidated damages under state law for herself and all similarly situated employees. And there may be a lot of similarly situated individuals, as Campbell alleges that Coach has been wrongfully withholding wages from employees since July 2008.