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Hawaiian Airlines Not Liable for Ten Days of Unpaid Trainee Time

Posted Monday, January 16, 2017 6:30 am
A participant in a pre-employment training program hosted by Hawaiian Airlines cannot proceed on a wage claim brought under the federal Fair Labor Standards Act and California law.  In Otico v. Hawaiian Airlines, Inc., the United States District Court for the Northern District of California held that a former customer service representative had no legal basis to claim that the unpaid training program constituted work for which she should have been paid.
 
The employee, Kathryn Otico, was accepted into a customer service representative training program that ran for ten days at the Oakland International Airport.  The program was unpaid and occurred prior to Otico's eventual hire by the airline.  Most of participants' training time was spent in a classroom learning about the FAA, company computer systems and operations, as well as touring airport facilities.  Upon completion of the program, Otico was required to take an examination, pass a background check, and obtain an airport security badge before being hired by Hawaiian Airlines.  After hire, she worked for a short time before quitting her job.  Otico subsequently filed suit against the airlines, alleging in relevant part that she should have been paid for the time she spent in the customer service representative training program.  Otico also proposed that the lawsuit should be a class action.  Hawaiian Airlines filed a motion for summary judgment as to Otico's individual claim, arguing that it was not required to pay her for the time because she was a "trainee" and not an "employee" during that period.  The parties deferred the question of class certification until after the resolution of the defendant's motion on Otico's individual claim.
 
As a general matter, the Department of Labor (DOL) considers six factors in analyzing whether an individual is properly classified as a "trainee" instead of an "employee" under the FLSA.  They are:
 
  1. The training is like that which would be given in a vocational school.
  2. The training is for the benefit of the trainees.
  3. The trainees do not displace regular employees, and instead work under close observation.
  4. The organization that provides the training derives no immediate advantage from trainee activities.  On occasion company operations may be impeded by trainee activities.
  5. The trainees are not necessarily entitled to a job after the training period.
  6. The organization and the trainees understand that the trainees are not entitled to wages for the time spent in training.
 
In concluding that summary judgment was proper, the court agreed with Hawaiian Airlines that Otico was properly classified as a "trainee" under the Fair Labor Standards Act (FLSA) during the time she spent in pre-employment training.  The court noted, however, that the DOL's criteria for evaluating whether an individual is properly classified as a "trainee" are not exhaustive of this issue.  Instead, a key question "is whether the employer is taking financial advantage of the trainee by using her to perform work that an employee would otherwise be performing. If so, the trainee should be paid for the work as an employee."
 
Because there was no evidence that Hawaiian Airlines directly benefited from Otico's free labor or scaled back the work of paid employees due to Otico's contributions, the court concluded that she could not be classified as an "employee" for wage and hour purposes.  This was particularly the case where Hawaiian Airlines used company employees to teach Otico and other training participants how to do customer service work in a classroom, and Otico did not have an opportunity to engage in actual customer service work during the training period.  Such facts, the court noted, are sufficient to support the conclusion that Otico was properly classified as a "trainee" even under the DOL's six-part test.  As such, the court concluded that summary judgment was proper as to Otico's claim for unpaid wages during the training period.  Otico v. Hawaiian Airlines, Inc. (Jan. 9, 2017)
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