Case Study: Sign on the Dotted Line
An employer offered an internship to a student. After the student accepted the offer, the employer gave the student an "Indemnity and Hold Harmless" agreement that the student was to have the university career services office sign. The agreement covered injury to the student and any possible claims that the student could bring against the employer. It also required the school to pay the employer's legal expenses in defending a claim brought by the student. The internship is not for credit, and the student would be paid. While it was found through a posting in the career services office, it was not affiliated with the university in any way. The employer did not come on campus to interview the student. The university's legal counsel advised the office not to sign it. The employer said that without the school's signature, it would withdraw the offer (and it did). The intern and his parents were required to sign the agreement last year and this year the school was also asked to sign it. The student was quite angry that the school refused to sign the agreement, and he was now left without an internship position for the summer.
Questions to consider:
- What is the purpose of hold harmless agreements?
- Is asking interns to sign hold harmless agreements in order
to obtain an internship position ethical?
- How about the practice of requiring the school to sign such
agreements in order for the employer to accept the student?
- Would it make a difference if this were a school-sponsored
internship? What if the student obtained the position through
the career services' on-campus-interviewing program?
- How should the school handle this with the employer/student? How should the employer handle this with the school/student?
Steps to Resolution
1. What relevant facts are known?
a. As a condition of employment for a summer internship, the candidate and his parents, as well as the university, were required to sign an "Indemnity and Hold Harmless" agreement that shielded the company from any legal claims or responsibility for any injuries that might befall the candidate.
b. The student learned of the position through a job posting in the career services office - not through a required internship program coordinated by the institution.
c. The legal counsel for the university advised the career services office not to sign the agreement, and the student's offer was subsequently withdrawn by the company.
However, the following is not known:
d. What is the history regarding internship practices by this employer?
e. What was the communication, if any, between the company and the career services office?
2. Identify the NACE Principles in question.
a. Employer Principle # 1—"Employment professionals
will refrain from any practice that improperly influences and affects
job acceptances. Such practices may include undue time pressure
for acceptance of employment offers and encouragement of revocation
of another employment offer. Employment professionals will strive
to communicate decisions to candidates within the agreed-upon time
frame.
b. Employer Principle # 2—"Employment professionals
will know the recruitment and career development field as well as
the industry and the employing organization that they represent,
and work within a framework of professionally accepted recruiting,
interviewing, and selection techniques."
3. What is the purpose of hold harmless agreements?
The purpose of the "hold harmless" agreement is to provide an employer a legal exemption from liability for injury or other damage or wrongdoing to an employee. In this situation, the employer is requiring the intern and his parents to sign a "hold harmless" agreement and is also requiring the Career Services office where the student attends school to sign the indemnity and hold harmless agreement. In effect, signing this agreement would make the parents and the Career Services office responsible for the student and would also make the Career Services office liable for any legal expenses if the student filed a claim against the employer. The employer assumes no responsibility or accountability for injury or "damages" to the student intern; it also protects the employer from incurring any legal expenses if the student intern files a claim against the employer.
4. Is asking interns to sign hold harmless agreements in order
to obtain an internship position ethical?
No, it is not ethical to require interns to sign a "hold harmless" agreement in order to be accepted for an internship. Employers are responsible for the well being of their employees, intern or long-term employee, while they are on the job. If the individual is a contract employee, the contract employee agrees to assume all the risks on their own behalf. However, entering into an agreement with a prospective hire for an internship while the prospective hire is still in college without full knowledge of the ramifications of such an agreement is unethical treatment of the individual.
5. How about the practice of requiring the school to sign such agreements in order for the employer to accept the student?
The employment agreement is between the student intern and the employer. In no way should the university be obligated to accept legal or financial responsibility of the intern while employed by the company. The Career Services office serves only as advisor and counsel to the student and facilitates the connection of the student with the employer. The Career Services office should not incur financial or legal liability for the well being of a student while they are working in an internship. The internship is short-term employment and the responsibility of the employee should rest with the employer.
6. Would it make a difference if this were a school-sponsored internship? What if the student obtained the position through the career services' on-campus-interviewing program?
No. Whether the internship is sponsored by the school, or the interviews are conducted on campus, the employment is between the intern and the employer. The university provides counsel, advice and facilitates the method that the student and employer become connected. The university should not assume any liability for injury or legal expenses of a sponsored or unsponsored intern on the work site of the employer. The company is hiring the individual and not the university.
7. How should the school handle this with the employer/student? How should the employer handle this with the school/student?
a. The Career Services' director, or representative, should contact the hiring manager and executive management of the company to outline the ethical and legal concerns in requiring a "hold harmless" agreement of a student. Career Services should encourage the employer to use the Principles of Professional Conduct, specifically, reviewing Employer Principle #1—"improper influence", "Employment professionals will refrain from any practice that improperly influences and affects job acceptances." Further, Career Services should review with the employer how other employers in their industry recruit and hire interns and provide the employer with reasonable and acceptable recruiting techniques practiced on campus and in the industry. Employer Principle #2—"professional knowledge", "Employment professionals will know the recruitment and career development field as well as the industry and the employing organization that they represent, and work within a framework of professionally accepted recruiting, interviewing, and selection techniques." Finally, Career Services should advise the employer of the reasons why the university legal counsel has advised the school not to sign the "hold harmless" agreement and encourage the employer to hire the intern in good faith without requiring the agreement with the student/parents or the university. Based on all of these concerns, the employer should be encouraged to require that all department hiring managers understand the ramifications of requiring "hold harmless" agreements as a condition of employment.
b. The Career Services director, or representative should contact the student and review the ethical and legal concerns as outlined by Career Services and advise the student that the employer has been contacted and discussed alternatives to the their current recruiting and hiring requirements. Explain to the student that the ethical practices of a company are indicative of their philosophy, culture and values. Help the student evaluate the situation using sound judgment in relation to what kind of work environment, corporate culture and career opportunity the prospective employer offers. Also, provide the student with other viable internships or resources to locate internships of comparable substance. This may include on-campus interviews, access to job listings, career advising, and access to alumni network.
c.The employer should open a dialogue with both the student and the school to explain their reasoning for requiring this "hold harmless" agreement and to come to an understanding and/or a reconciliation with the school and the student about the requirement. The employer should make sure all department hiring managers understand the legal, ethical and practical ramifications of requiring a student to sign a "hold harmless" agreement and re-examine their stance on the requirement. In most cases, it is unethical to require a student to sign a "hold harmless" agreement.
