Judge William Martinez, a 2010 appointee to the United States District Court for the District of Colorado, recently solicited applications for year-long federal clerkships. Martinez is provided funding for two clerkships, but he desired a third. Without federal funding for a third applicant, Judge Martinez seeks an individual willing to work for no salary. The position was advertised as a “gratuitous service appointment.” To obtain employment, a candidate would have to waive any claim to compensation of any form.
The Fair Labor Standards Act (“FLSA”) establishes several standards to protect workers, including the imposition of a minimum wage for covered nonexempt employees. The federal minimum wage is currently $7.25 per hour.
In order for this minimum wage provision to apply, the employment at issue must be covered by the FLSA, of which there are two forms: “enterprise coverage” and “individual coverage.” Employment as a federal judicial clerk appears to constitute enterprise coverage, which includes employment with “the Government of the United States.”
In addition, the worker must be nonexempt. FLSA Section 213(a) lists a significant number of exemptions, however even the “learned professional exemption” would not apply as the worker will not be compensated in excess of $455 per week.
Further, in order for the FLSA to apply there must be an employment relationship with an “employer” and an “employee.” Essentially, employers often argue that the worker is an independent contractor rather than an “employee.” Courts have utilized the “economic realities test” for the purposes of the FLSA.
The factors considered are as follows:
- The extent to which the services in question are an integral part of the employer’s business
- The permanency of the relationship
- The amount of the alleged contractor’s investment in facilities or equipment
- The nature and degree of control by the principal
- The alleged contractor’s opportunities for profit and/or loss
- The amount of initiative, judgment or foresight in open market competition with others required for success of the independent enterprise
- The degree of independent business organization and operation
The factors substantially support there being an employment relationship here, rather than a clerk constituting an independent contractor.
Finally, the government can analogize to unpaid internships, which have been permitted under FLSA if satisfying certain requirements. These factors are considered in light of the FLSA’s definition of “employ,” defined as “suffering or permitting to work.”
The criteria are as follows:
- The training is similar to the training which would be given in an educational environment
- The experience is for the benefit of the trainee
- The trainee does not displace any regular employee and works under close supervision of existing staff
- The employer providing the training derives no immediate advantage from the activities of the trainee and in some cases its operations may be impeded
- The trainee is not necessarily entitled to a job at the conclusion of the training
- Both the employer and the trainee understand that the trainee will not be paid any wages for their time spent as a trainee.
If any of one these criteria are not met, the worker would be considered an employee under the FLSA and therefore entitled to minimum wage.
Under these circumstances, there is the potential that these factors will be met and therefore this employment relationship would be exempt from FLSA minimum wage requirements. The strictness with which a court evaluates these factors would play a crucial role.
As Professor Paul Campos notes, this employment relationship may violate “the letter and spirit of the FLSA.”
“Hiring one person to do a paid job, while at the same time hiring another person through exactly the same hiring process to do exactly the same job, but not paying him or her to do it, is precisely what the statute was designed to prohibit.”
However, at this point it is unclear how this observation fits into the criteria regulating unpaid internships.
A major problem with this entire calculation may be the unwillingness of the law clerk to cooperate in any action against the employer. Considering the state of the legal job market, many will surely apply for a prestigious position like this one regardless of compensation. Law students frequently take internships that probably violate the FLSA. As Professor Campos wisely observes, this “is just another way of ensuring that only the children of the rich have access to [prestigious legal jobs].”
 See 29 U.S.C. § 203(x)
 See e.g. Donovan v. DialAmerica Mktg. Inc., 757 F.2d 1376 (3d Cir. 1985)
 See 29 U.S.C. § 203(g)
 See Walling v. Portland Terminal Co., 330 U.S. 148 (1947)