AB 1443 Assembly Bill - Bill Analysis

BILL ANALYSIS �

AB 1443
Page A
Date of Hearing: March 19, 2014

ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Roger Hern�ndez, Chair
AB 1443 (Skinner) - As Introduced: January 6, 2014

SUBJECT : Harassment: unpaid interns.

SUMMARY : Extends certain employment discrimination and
harassment provisions of the Fair Employment and Housing Act
(FEHA) to unpaid interns. Specifically, this bill :

2)Provides that it is unlawful for an employer or other
specified entity to harass an unpaid intern because of
specified protected categories.

3)Provides that harassment of an unpaid intern shall be unlawful
if the entity, or its agents or supervisors, knows or should
have known of the conduct and fails to take immediate and
appropriate corrective action.

4)Provides that an employer may also be responsible for the acts
of nonemployees with respect to sexual harassment of unpaid
interns where the employer, or its agents or supervisors,
knows or should have known of the conduct and fails to take
immediate and appropriate corrective action.

EXISTING LAW :

1)Provides that it is unlawful for any person to discriminate
against any person in the selection or training of that person
in any apprenticeship training program or any other training
program leading to employment because of the race, religious
creed, color, national origin, ancestry, physical disability,
mental disability, medical condition, genetic information,
marital status, sex, gender, gender identity, gender
expression, age, sexual orientation, or military and veteran
status of the person discriminated against.

AB 1443
Page B
2)Provides that it is unlawful for an employer, labor
organization, employment agency, apprenticeship training
program or any training program leading to employment, or any
other person, because of race, religious creed, color,
national origin, ancestry, physical disability, mental
disability, medical condition, genetic information, marital
status, sex, gender, gender identity, gender expression, age,
sexual orientation, or military and veteran status, to harass
an employee, an applicant, or a person providing services
pursuant to a contract.

3)Provides that harassment of an employee, an applicant, or a
person providing services pursuant to a contract by an
employee, other than an agent or supervisor, shall be unlawful
if the entity, or its agents or supervisors, knows or should
have known of this conduct and fails to take immediate and
appropriate corrective action.

4)Provides that an employer may also be responsible for the acts
of nonemployees, with respect to sexual harassment of
employees, applicants, or persons providing services pursuant
to a contract in the workplace, where the employer, or its
agents or supervisors, knows or should have known of the
conduct and fails to take immediate and appropriate corrective
action.

FISCAL EFFECT : Unknown

COMMENTS : Existing state law (FEHA) already provides
protections for employees, applicants, and specified contractors
against unlawful discrimination and harassment.

Specifically, current law already provides that it is unlawful
for any person to discriminate against any person in the
selection or training of that person in any apprenticeship
training program or any other training program leading to
employment because of certain protected categories.

Current law also provides specific protections against specified
form of harassment, including sexual harassment. Existing law
provides that it is unlawful for an employer, labor
organization, employment agency, apprenticeship training program
or any training program leading to employment, or any other
person, because of race, religious creed, color, national
origin, ancestry, physical disability, mental disability,

AB 1443
Page C
medical condition, genetic information, marital status, sex,
gender, gender identity, gender expression, age, sexual
orientation, or military and veteran status, to harass an
employee, an applicant, or a person providing services pursuant
to a contract.

Current law also provides that harassment of an employee, an
applicant, or a person providing services pursuant to a contract
by an employee, other than an agent or supervisor, shall be
unlawful if the entity, or its agents or supervisors, knows or
should have known of this conduct and fails to take immediate
and appropriate corrective action. Finally, existing law
provides that an employer may also be responsible for the acts
of nonemployees, with respect to sexual harassment of employees,
applicants, or persons providing services pursuant to a contract
in the workplace, where the employer, or its agents or
supervisors, knows or should have known of the conduct and fails
to take immediate and appropriate corrective action.

This bill would generally extend these provisions of FEHA to
include protections for unpaid interns. The author argues that
this bill is necessary because neither federal nor state law
explicitly protects unpaid interns from harassment or
discrimination. The author also states the following:

"The recession has forced young people to rely on these
unpaid positions to build resumes and contacts in an
incredibly competitive job market. According to a 2008
survey by the National Association of Colleges and
Employers, 50 percent of graduating students held
internships, up from the 17 percent shown in a 1992 study
by Northwestern University. Women are significantly more
likely than men (77% versus 23%) to be engaged in unpaid
internships. A person should not give up basic civil
rights and workplace protections just because he or she is
willing to forgo pay in order to gain work experience.
Employers owe a safe, harassment-free, and fair workplace
to all employees, including unpaid interns."

Protections (or Lack Thereof) Under Federal Law

Title VII of the Civil Rights Act of 1964 is the federal
equivalent of FEHA and prevents employment discrimination based
on race, color, religion, sex or national origin. However,

AB 1443
Page D
federal courts have generally rejected claims by unpaid interns
or volunteers under Title VII.

One of the major federal cases addressing this issue is O'Connor
v. Davis, 126 F.3d 112 (2d Cir. 1997). Among the allegations
made by a student intern in that case were that a supervising
physician nicknamed her "Miss Sexual Harassment," made comments
about the intern's private sexual conduct, made sexually
suggestive comments, and asked the intern to remove her clothing
in preparation for a meeting. However, the court dismissed the
intern's claim for sexual harassment under Title VII because it
held that, as an unpaid intern, she was not an "employee" for
purposes of the federal law.

Claims filed by interns and volunteers under other federal laws
have generally faced similar obstacles. See, e.g., Shoenbaum v.
The Orange County Center for Performing Arts, 677 F.Supp. 1036
(C.D. Cal. 1987)[claim arising under the Age Discrimination in
Employment Act]; Blankenship v. City of Portsmith, 327 F.Supp.
2d 496 (E.D. Va. 2005)[claim arising under the Age
Discrimination in Employment Act]; Tawes v. Frankford Volunteer
Fire Co., 2005 U.S. Dist. LEXIS 786 (D. Del. 2005)[claim arising
under the Americans with Disabilities Act].

Some courts have extended the protections of certain employment
laws to volunteers where the volunteers receive extensive
benefits. See, e.g. Haavistola v. Cmty. Fire Co., 6 F.3d 211
(4th Cir. 1994). However, these federal courts have generally
not clearly articulated how much compensation or what kinds of
benefits one must receive in order to be an employee.

Recent High-Profile Case in New York

Although arising under state and local law, a recent case from
New York has garnered significant media attention and has
renewed concerns about legal protections for unpaid interns.
Wang v. Phoenix Satellite Television US, Inc., Case No.
1:13-cv-00218-PKC (S.D.N.Y. 2013).

In that case, an unpaid intern at a media company filed suit
under the New York State Human Rights Law and the New York City
Human Rights Law, alleging that she was subjected to a hostile
work environment, quid pro quo sexual harassment, and
retaliation during the course of her internship. However, the
court dismissed that part of the case, stating that it was

AB 1443
Page E
"axiomatic" under both federal and state law that compensation
is a threshold issue in determining the existence of an
employment relationship. Since the plaintiff was an unpaid
intern, and not an employee, the court held that she had no
claim under the applicable state and local law.

The Wang case garnered significant national media attention<1>.
A New York State Senator subsequently announced that she was
introducing legislation to amend the state law to include unpaid
interns.

Analogous to Protections in Existing Law for Independent
Contractors?

FEHA already extends protections against harassment to one
category of non-employees. Specifically, FEHA already extends
such protections to "a person providing services pursuant to a
contract" (Government Code section 12940(j)(1), such as an
independent contractor.

This addition was added to FEHA pursuant to AB 1670 (Assembly
Judiciary Committee) from 1999. At the time, proponents of the
change cited examples such as a self-employed graphic designer
who works in-house for a company, or other long-term independent
contractors who were subject to, and needed protection from, the
same potential for harassment as employees of a given employer.

Similar policy arguments can be made to extending protections
against harassment to a non-employee unpaid intern, as proposed
by this bill. Namely, there is an argument that, like an
independent contractor, an unpaid intern may be subject to the
same harassing conditions as traditional employees and is
therefore in need of protection under the law.

Recent Oregon Legislation

On June 13, 2013, Oregon Governor John Kitzhaber signed into law
a bill extending certain employment discrimination protection to
---------------------------
<1> Despite the high-profile nature of the Wang decision,
several other states have reached similar conclusions under
their state statutes in cases involving interns or volunteers.
See, e.g., Lowery v. Klemm, 845 N.E.2d 1124 (Mass. 2006); City
of Fort Calhoun v. Collins, 500 N.W.2d 822 (Neb. 1993); Lipphold
v. Duggal Color Projects, 1998 U.S. Dist. LEXIS 335 (S.D.N.Y.
1998).

AB 1443
Page F
interns. Among other things, the new law grants unpaid interns
legal recourse under Oregon's employment discrimination laws for
workplace violations including sexual harassment, unlawful
discrimination, and retaliation for whistleblowing.

Should This Bill be Amended to Include "Volunteers?"

As discussed above, some of the federal decisions or cases
arising in other states involve claims by "volunteers," rather
than unpaid interns. Cases arising under California have also
generally involved situations where the plaintiff was a
"volunteer."

One of the most notable cases arising under FEHA was Mendoza v.
Town of Ross, 128 Cal. App. 4th 625 (2005). The plaintiff was
born with cerebral palsy resulting in quadriplegia, and used a
wheelchair. He was retained as a volunteer community service
officer and was assigned to an elementary school and assisted in
traffic duties, crime prevention and neighborhood crime watch
programs. After he was terminated from his volunteer position,
he filed suit alleging wrongful termination and discrimination
based on disability in violation of FEHA. However, the court
held that because Mendoza was unpaid and did not allege that he
was provided any substantial benefits, he did not meet the
definition of "employee" for FEHA purposes.

More recently, a similar holding was reached in Estrada v. City
of Los Angeles, 218 Cal. App. 4th 143 (2013), a case involving a
claim for disability discrimination under FEHA by a reserve
officer for the Los Angeles Police Department. The court held
that Estrada was an uncompensated volunteer rather than an
employee, despite the fact that such officers were deemed by the
City to be "employees" for the limited purpose of extending
workers' compensation benefits to them in the event they were
injured while performing their duties. Therefore, he was not
able to pursue a discrimination claim under FEHA.

Is a "volunteer" qualitatively different from an "unpaid
intern?" Many, but not all, internships are part of a more
formalized educational or vocational program, whereas a
volunteer is less likely to be linked to such an
education/vocational program. For wage and hour purposes for
determining whether an intern is an "employee" (for example, for
minimum wage purposes), the Division of Labor Standards
Enforcement (DLSE) looks at six factors, including whether the

AB 1443
Page G
training is for the benefit of the intern and whether the
employer receives any immediate advantage from the activities of
the intern<2>.

Are "volunteers" similarly situated to unpaid interns in that
they generally perform work at the employer's worksite, operate
under the employer's general supervision or direction, and are
therefore subject to the same potential for harassment? If so,
the author may wish to consider amending this bill to include
such volunteers.

ARGUMENTS IN SUPPORT :

Supporters argue that many interns work alongside and undertake
the same duties as their employed counterparts. They are
subjected to similar treatment from supervisors and exposed to
the same workplace environment as those employed by the
companies and organizations for which they intern. Moreover,
several professional graduate programs require or at least
typically include some type of internship placement before
completion, including social work, law, education and nursing.

COMMITTEE STAFF COMMENT :

This bill is double-referred to the Assembly Judiciary
Committee.

REGISTERED SUPPORT / OPPOSITION :

Support

California Communities Untied Institute
California Employment Lawyers Association
Equal Rights Advocates (sponsor)
Monarch Services-Servicios Monarca
Numerous Individuals
Worksafe

Opposition

None on file.

Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091

---------------------------
<2> See, e.g., DLSE Opinion Letter No. 2010.04.07 (2010).

AB 1443
Page H