A federal judge in the Southern District of New York ruled earlier this month that a former intern was not entitled to pursue her claim for sexual harassment under the New York City Human Rights Law (the “NYCHRL”) because she was not an “employee” under the NYCHRL.

In the case of Lehuan Wang v. Phoenix Satellite Television US, Inc., Case No. 13 Civ. 218, plaintiff, Lehuan Wang (“Wang”) was an unpaid intern at Phoenix Satellite Television US, Inc. (“Phoenix”).  Wang alleged that during her internship she was subject to a hostile work environment, sexual harassment and retaliation by her supervisor, Zhengzu Liu (“Liu”).  Liu was the bureau chief of Phoenix’s New York office where Wang worked, as well as the Washington, D.C. office, and he had discretion over the hiring and firing of employees and interns for both offices.  Wang asserted in her complaint that at the beginning of her internship she had asked Liu about permanent employment with Phoenix after her graduation, and was told she could obtain permanent employment at Phoenix if she was able to obtain a visa.  Thereafter, Wang alleged that when Liu was visiting from out-of-town he lured her to his hotel and subjected Wang to unwanted sexual advances which were rejected.  Wang claimed that after the sexual advances were rebuffed, Liu no longer expressed any interest in hiring her after she completed her master’s degree.

The Court determined that since Wang was an unpaid intern, she was not an employee protected by the NYCHRL, and thus could not pursue an actionable claim for sexual harassment.  The Court indicated that its decision was supported by the plain meaning of the NYCHRL, and the fact that compensation is a threshold issue in determining the existence of an employment relationship.  Since Wang received no compensation for her internship, she was not entitled to the NYCHRL protection.  The Court also noted that its decision that an unpaid intern was not an employee under the NYCHRL was bolstered by interpretations of similar provisions of both Title VII and the New York State Human Rights Law.

The Court, however, declined to dismiss Wang’s claim for failure to hire under both the NYCHRL and the State Law.  Instead, it found Wang had sufficiently alleged facts to show that a permanent position was available at Phoenix and that she had applied informally for the position.  The Court noted that hiring for Phoenix’s New York Office rested solely with Liu, and that when Wang contacted Liu about a permanent position after she rejected his first advance, his response was to invite her to Atlantic City for the weekend to discuss a permanent position rather than have her solicit a formal application.

The Court’s decision in Lehuan Wang v. Phoenix Satellite Television US, Inc. is certain to spark debate about what protections should be available to unpaid interns and/or volunteers against unwanted sexual harassment.  Any business that offers unpaid internships should be careful to treat interns and employees alike with professionalism and respect.