foxbusiness.com—By Christina Couch
Ever since the "'Black Swan' case," wherein two unpaid interns who worked on Darren Aronofsky's iconic film sued Fox Searchlight Pictures for violating Department of Labor regulations, many companies have made serious changes to their internship programs. While there are less exploitive internship than there used to be (several programs shut down following the fiasco), many still exist, leaving it up to students to do their research. Students must learn to avoid bad internships and to take action if they find themselves in an illegal program. Before starting an internship program, make sure you know where you legally stand.
"(The majority of) unpaid internships happen in just a couple of industries, what we call the glamour industries -- media, journalism, fashion, radio, TV, broadcasting, publications, things like that," says Robert Shindell, Ph.D., vice president and chief learning officer for Intern Bridge, a college consulting and research firm that focuses on internship and recruiting experiences. "You would never find an unpaid internship at a bank or a financial institution or an engineering firm."
Unpaid Internships Have Strict Regulations
Unpaid internships at for-profit companies are subject to fairly strict regulation from the Department of Labor. Generally, to qualify as a legal unpaid internship, the program must pass a six-factor test that ensures the program benefits the student more than the employer, is educational in nature and doesn't replace paid positions with unpaid labor. It also stipulates the intern must be aware that they are not entitled to wages during the internship nor are they entitled to a job once the internship is over.
6 Criteria Unpaid Internships Must Meet
When a for-profit employer hires an unpaid intern, all six of the following criteria must be met. If the company doesn't meet these criteria, the intern could potentially be an employee, meaning he or she could collect back pay.
1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training that would be given in an educational environment.
2. The internship experience is for the benefit of the intern.
3. The intern does not displace regular employees, but works under close supervision of existing staff.
4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded.
5. The intern is not necessarily entitled to a job at the conclusion of the internship.
6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
Source: U.S. Department of Labor
Under these guidelines, offering a legal unpaid internship program should require some serious time investment from a for-profit employer, says Michael Litrownik, an attorney at Outten and Golden LLP, the law firm that represented the "Black Swan" interns and other interns in cases against Hearst Corp., NBCUniversal and Conde Nast.
"If a supervisor is spending an hour a day working with the intern to show them how to do this, how to do that, letting them shadow stuff ... that's really what needs to be present," he says. "Maybe some operations are taking a little longer because the intern is doing them and doesn't really know how to do them," Litrownik says. These are the things that make up what an internship is, something where you are taking the time to teach the student a skill or trade.
The rules on religious, humanitarian, civic and charitable nonprofit entities are different. While these organizations are legally allowed to have volunteers, and therefore benefit from unpaid labor, that doesn't cover those working in a commercial aspect of a nonprofit enterprise, such as a store whose proceeds benefit a charity.
Worker's Comp for Interns?
Pay isn't the only legal issue interns should be concerned about. Interns may not be covered under workers' compensation rules, though some individual organizations, particularly those in fields where workers are regularly exposed to physical risk or stress, do include interns in their workers' compensation policies, Shindell says. Interns also aren't always subject to the same harassment and discrimination protections as full-time employees.
Starting this month, New York City extended its discrimination and harassment protection to unpaid interns on the heels of an alleged sexual harassment case against Phoenix Satellite Television that was dismissed on the grounds that the plaintiff was an intern at the time of the event and therefore not subject to full protection. Oregon passed similar regulation last year, but these laws aren't uniform across the country.* * *
Have Your Rights Been Violated?
Assess your internship. Do you think it meets the six factors for an unpaid internship? If you feel that your rights have been violated, in terms of payment or otherwise, there is recourse. And if a court rules in favor of an intern, it's possible to receive back pay plus overtime for you and anyone else who interned for that company in the past, says Litrownik. A favorable ruling can also establish fair wages for interns of the future.
It's worth noting that many internship suits settle before going to court. Litrownik suggests students who don't believe their internships are operating within the legal boundaries seek legal counsel and discuss their options.* * *
Shindell says he believes the best way to sidestep a fiscally exploitive internship is to avoid unpaid internships altogether.
"Unpaid internships will go away when students simply stop taking them," he says, "and I think we're at that tipping point."
Capital New York — By Peter Sterne
The great media-world intern revolt didn’t arise from an army of underpaid fashion-closet assistants, coffee-order-takers and instant-news-rewrite bloggers suddenly storming the castle in fury.
It began when a 40-something who’d built himself a comfortable career in finance read an article in The New York Times.
In April 2010, Eric Glatt had already quit his job at AIG to pursue his first love—film. He had received certification in the art of film editing and was working as an unpaid intern on Fox Searchlight Production’s film, Black Swan.
Then he came across the Times article by labor reporter Steven Greenhouse, titled “The Unpaid Intern: Legal or Not?”
The piece reports on the federal Department of Labor’s plan to increase scrutiny of unpaid interns and details a “fact sheet” the Department had released.
“The Times writes this piece, and I not only start to figure out, ‘ ... this clear-cut legal violation is going on,’ I also understand why no one else has come forward yet …. as soon you sue your employer, you can kiss all the recommendations good-bye.”
“I realized I was in a very unique position because I’m older, I’ve got other career options ahead of me, I wasn’t single-mindedly determined that the one thing I wanted to do was break into this industry,” he said.* * *
He first contacted the Department of Labor and learned that he could file a back-pay claim for minimum wage. But he worried an individual back-pay claim on his own behalf would not change the industry’s practices, so he began looking for a law firm interested in working with him to file a class-action suit.
“My concern was if I file as an individual a minimum wage backpay claim against Fox Searchlight Pictures, which had already earned over $300 million at the global box office, that check would have been forgotten before the ink was even dry,” he said.
He brought the idea to multiple law firms, he said, but they were reluctant to bring the case.* * *
Unexpectedly, he received an email from Perlin, who had been contacted by an attorney named Adam Klein. Klein ... a partner at the employment law firm Outten & Golden, which had a history of bringing successful class-action wage-theft and discrimination suits on behalf of employees.
“Within minutes, [Klein] was like, when can you come into the office? I think I must have been in there the next day, and I had one of the best meetings with my life,” Glatt said. Outten & Golden agreed to take the case on a contingent basis—meaning that they would get a cut of any winnings but Glatt wouldn’t be on the hook for any fees if he lost. The class-action suit against Fox Searchlight, with Glatt and his friend Alex Footman as named plaintiffs, was filed in September 2011.* * *
One of his few supportive friends was Lucy Pickerton, a fellow Wesleyan graduate whom he often saw at alumni happy hours in New York City.* * *
In March 2012, Pickerton filed her own class-action suit with Outten & Golden—against “Charlie Rose,” where she had worked as an intern. Rose settled that December, reportedly for $110,000. Another young woman inspired by Glatt’s lawsuit was Diana Wang, who brought a class-action suit against Hearst in February 2012, with Outten & Golden’s help.
In 2013, Outten & Golden represented interns in suits against Condé Nast and NBCUniversal. As Capital reported two weeks ago, the firm is currently reaching out to former unpaid interns at Vice Media.
The results of the lawsuits filed so far have been mixed. In the Hearst case, a judge ruled against the former interns. In the Fox case, a different judge ruled in favor of the former interns. Both decisions have been appealed and will be heard in tandem before the Second Circuit Court of Appeals later this year.
In April, though, the Department of Labor came down on the side of the interns, filing an amicus brief in the Hearst case arguing that the interns’ interpretation of the law was the correct one.
More suits are likely to be filed, and there isn’t much that media companies can do to avoid them.
“Obviously, the best way to avoid liability is to pay [interns] going forward,” Juno Turner, an associate at Outten & Golden, said.
But starting to pay interns minimum wage isn’t enough to avoid a lawsuit.
In fact sometimes suddenly paying interns can provoke such a suit. NBCUniversal began paying interns in the spring of 2013, but was sued by former unpaid interns in July 2013, in a suit filed by Outten & Golden. One of the named plaintiffs in that suit, Monet Eliastam, had worked as an unpaid intern for “Saturday Night Live” in 2012 and decided to sue NBCUniversal after being informed that her replacement would be paid.
It all comes down to the statute of limitations on back-pay claims, Turner said. Under the Federal Labor Standard Act, the statute of limitations is three years, and New York state labor law extends that to six years. FLSA also requires that any settlements of backpay claims be court-mediated, which means that a company like Condé Nast couldn’t just set up an informal system of paying former unpaid interns.
“As far as people who have already interned, certainly you could come to an agreement but the FLSA requires that any agreement for settlement of a FLSA claim be court-supervised,” Turner explained. “It would have to be something that was basically part of a lawsuit or a settlement that was administered by a court to ensure that it was a fair settlement and an adequate one.”
The upshot: any New York-based company that paid interns less than minimum wage during the last six years could easily find themselves the target of an Outten & Golden class action suit.
“Companies, I think, are somewhat vulnerable to lawsuits until the statute of limitations expires if they’re looking to settle their claims with past interns,” Turner said.
Dozens of major media companies have used unpaid interns some time over the past six years, which means they are theoretically vulnerable to a suits like those brought against Fox Searchlight and Condé Nast.
These include The New York Times, Wenner Media, New York Media, The New Republic, The New York Observer, Say Media, Abrams Media, Vox Media, Time Warner Cable, CBS, Time Out New York, The Daily Beast, Slate, and Harper’s.
Outten & Golden’s Turner told Capital that the law firm is currently exploring new class-action suits against “several” companies.
“I’m not going to go into the cases that we’re investigating, but we certainly have active investigations against a number of potential defendants,” she said.
A district court judge used the wrong test for determining who qualifies as an “employee” under wage-and-hour law when he denied class certification to Hearst Corp.'s former unpaid interns, the U.S. Department of Labor told the Second Circuit on Friday.
The DOL lodged an amicus brief at the appeals court in support of the plaintiffs, who are challenging U.S. District Judge Harold Baer's May decision denying class certification on their New York Labor Law claims and rejecting their bid for summary judgment on their status as “employees” under the Fair Labor Standards Act and NYLL.
A six-part DOL test for ascertaining whether a trainee or intern qualifies as an employee under the FLSA would have been the right way to determine the plaintiffs' employment status, and Judge Baer dropped the ball by using another standard, the agency argued.
“Instead of utilizing the department's long-standing, objective test, the district court adopted a more subjective 'totality of the circumstances' test that necessarily makes it more difficult for both employers and interns, as well as courts, to determine whether interns are employees entitled to the protections of the FLSA,” the DOL's amicus brief said.
In November, the Second Circuit gave the Hearst interns a green light to pursue their appeal of Judge Baer's decision. In the same order the appeals court agreed to hear an appeal from Fox Entertainment Group Inc. in a separate intern wage case, where Fox is taking aim at a June decision granting class and collective certification to an ex-intern who brought wage and hour claims against Fox.
The Fox and Hearst intern appeals, which are being heard in tandem, involve the question of what the proper test is for determining employee, as opposed to intern, status for wage-and-hour purposes.
On March 28, the Hearst plaintiffs filed their opening brief in their appeal, claiming that the Second Circuit should reject the test used by Judge Baer, calling it “unpredictable, subjective and hard to apply.”
The court ought to adopt the six-part test laid out in an April 2010 DOL fact sheet, the interns said, as did the DOL.
Hearst argued that the trial court should use a “balancing of the benefits” test, which considers the totality of the circumstances when assessing the relationship between a company and interns, and while Judge Baer didn't completely disregard the six-part DOL test, he said the totality-of-circumstances test represented “the prevailing view,” the DOL said in Friday's brief.* * *
The Hearst suit was filed in February 2012 by Xuedan Wang, who says she regularly worked more than 40 hours per week as an unpaid intern for several months at Harper's Bazaar magazine.* * *
In addition to the DOL's recent filing in the Hearst case, the closely watched intern appeals at the Second Circuit have drawn amicus input from numerous groups, including the National Employment Lawyers Association, the American Association of State Colleges and Universities, and the U.S. Chamber of Commerce.* * *
Outten & Golden LLP's Juno Turner, an attorney for the interns in both cases, said they were glad to have the DOL's support.* * *
The interns in both appeals are represented by Adam T. Klein, Rachel M. Bien and Juno E. Turner of Outten & Golden LLP.
The cases are Glatt v. Fox Searchlight Pictures Inc., case number 13-4478; and Wang v. The Hearst Corp., case number 13-4480, both in the U.S. Court of Appeals for the Second Circuit.
The Los Angeles Times—By Daniel Miller and John Horn
Melvin Mar's entrée to Hollywood was far from glamorous. As an unpaid intern for "Platoon" producer Arnold Kopelson, Mar was responsible for fetching his boss' lunch of matzo ball soup every day.
Mar calculated to the minute how long it would take to walk from the production company's Century City offices to the Stage Deli nearby, buy the soup and decant it into a bowl on Kopelson's desk, still piping hot, at precisely 1 p.m.
Mar parlayed his internship into jobs at DreamWorks and Scott Rudin Productions.* * *
Uncompensated minions are as central to the movie business as private jets, splashy premieres and $200 lunches. But the Hollywood tradition is under assault.
A class action by former interns on the 2010 film "Black Swan" could radically change the industry's reliance on unpaid neophytes. The suit seeks back pay, damages and an order barring use of unpaid interns at Fox Searchlight Pictures and other units of Fox Entertainment Group.* * *
It would also force Hollywood to change everything from the way film crews are assembled to the manner in which new talent is cultivated.
Eric Glatt, who was an intern for the New York-based "Black Swan" production, is a lead plaintiff in the lawsuit. He gave up a $95,000 desk job at insurance company American International Group to pursue his dream of becoming a film editor.
Glatt's "Black Swan" duties included running errands for the movie's famously exacting director, Darren Aronofsky.
ON LOCATION: Where the cameras roll
During post-production, Aronofsky needed a hypoallergenic pillow — he wanted to be comfortable in the editing room — and Glatt, then 40, was given the assignment.* * *
During his roughly nine months on the film, Glatt said, he was also sent on errands to get Aronofsky "the perfect scented candle" and his favorite tea, PG Tips.
"The one thing you learn as an intern is don't ask," Glatt said.
Glatt, who spent $5,500 for a film editing course before signing on with "Black Swan," had hoped an internship would be his pathway to a film career. But Glatt came to believe that Hollywood was taking advantage of people like him — and violating the Fair Labor Standards Act, which mandates that unpaid internships benefit the interns, not the employers.* * *
The lawsuit contends that minimum wage laws were violated during the making of "Black Swan." The plaintiffs are seeking back pay and damages for themselves and an unspecified number of other interns who worked at Searchlight and other units of Fox Entertainment Group.* * *
Fox has appealed Pauley's ruling, contending that interns are not employees subject to wage protection if they, not the employer, are the "primary beneficiaries" of the internships.* * *
A ruling by New York's 2nd Circuit Court of Appeals is expected by early next year.
The Department of Labor does not track internships, paid or unpaid, but workplace experts agree that internships have become a rite of passage for entry into all kinds of white-collar jobs. Ross Perlin, author of the book "Intern Nation," estimates there are 500,000 unpaid interns nationwide (based on census data and private research) and says the practice saves companies about $2 billion annually in labor costs.
In Hollywood, interns fetch cappuccinos, read scripts, answer phones and even top off talent agents' gas tanks. The sometimes demeaning tasks are part of a business culture that puts a premium on newcomers paying their dues.
Some view internships as one of the only ways to get a foot in the film business' narrow door, and others consider them an invaluable apprenticeship, where menial tasks help prepare interns for the rigors of the industry and foster crucial relationships that lead to better jobs.* * *
Historically, unpaid internships have been prevalent in Hollywood because there are many more job seekers than openings. The practice expanded in other businesses over the last decade, author Perlin said, but entertainment remains one of the bastions of unpaid labor — as does publishing, another highly competitive field.
Perhaps not surprisingly, the Fox Searchlight lawsuit was followed by others from unpaid interns at Warner Music Group and Atlantic Records, and at publishing houses Condé Nast and Hearst Corp., the latter of which brought on roughly 3,000 interns from 2006 to 2012.
The suits appear to have made an impact. Condé Nast canceled its unpaid internship program last fall, and last year, talk show host Charlie Rose and his production company paid about $110,000 to settle a lawsuit brought by former unpaid interns, with part of the proceeds going to the interns as back pay.
Fox Entertainment Group and Universal Pictures now say they pay interns. NBCUniversal, the parent of Universal Pictures, also is subject to a lawsuit filed by former unpaid interns who allege the company violated the Fair Labor Standards Act.* * *
According to UCLA's Career Center, roughly 90% of the internships offered by production companies through the university's BruinView website are unpaid. At least one major talent agency distributes a list of entertainment jobs that includes many unpaid internships. A Nov. 26 compilation included 36 film and television internships, 16 of them unpaid.
A posting for an unpaid internship with "Rush Hour" filmmaker Brett Ratner's RatPac Entertainment said duties would include "Xeroxing, running errands, research, filing and sorting, dubbing tapes, temping on assistants' desks, answering phones, reading scripts and writing coverage (summaries of scripts)." A similar posting at Green Hat Films, the production banner of "The Hangover" filmmaker Todd Phillips, described duties including "reading scripts, writing coverage, answering phones and other office tasks."* * *
Ryan Stayton, 36, moved to Los Angeles in 2009 to break into Hollywood. He had four internships in the last year, all unpaid. He said more entertainment companies are requiring their interns to obtain school credit, a practice that Cheryl Orr, a labor lawyer not involved in the litigation, says does not exempt companies from having to adhere to federal guidelines for unpaid internships.
"A young kid who is receiving credit believes it to be some fashion of tangible recompense to them," said Stayton, who graduated from the University of Michigan more than a decade ago.* * *
But of the 20 or so interns he knows, only one has parlayed the work into a paying job.
"I have had a good experience with all of these companies," Stayton said, "but I don't feel like I will be satisfied until I get a paid job."
The former Fox Searchlight interns have said the company's program was in violation of the six legal criteria for unpaid internships issued by the Department of Labor in April 2010 (nonprofits are exempt from the rules). Before applying the criteria to internships, the Department of Labor had used the guidelines for decades to evaluate the status of so-called "trainees" under the Fair Labor Standards Act.
The guidelines say that an unpaid internship should be "similar to training which would be given in an educational environment" and offer the employer "no immediate advantage from the activities of the intern." The intern, furthermore, should not "displace regular employees," according to the guidelines.
Because lower courts have disagreed about what rules apply, two cases brought by Glatt's lawyers — against Fox Searchlight and Hearst — simultaneously will be decided by the 2nd Circuit Court of Appeals.
Glatt and Alex Footman, a fellow plaintiff and former "Black Swan" intern, have been pilloried by people trying to break into Hollywood since filing their complaint. Footman has received expletive-laced emails, one saying he is "ruining the film industry for everyone else."* * *
Glatt, now 44 and a law student at Georgetown University, insisted the dispute was not "about whiny millennials who don't want to do real work."
"It's the employer who is acting entitled," he said, "because they think they can get something for free, trading on the notion that it's cool to be on a set with someone like Aronofsky."* * *
NBC Universal is the latest media company to get sued by former unpaid interns.
According to The Hollywood Reporter, NBC Universal was sued by former MSNBC intern Jesse Moore, who worked in the cable network's booking department in 2011.* * *
The legal action is the latest in a string of lawsuits filed against major media companies by former unpaid interns. Earlier this week, Charlie Rose's production company paid $110,000 to settle a lawsuit filed by former unpaid interns. In June, a Manhattan judge ruled that former interns on the set of the movie "Black Swan" were de facto employees of Fox Searchlight Pictures entitled to payment. On Tuesday, Fox Searchlight filed documents demonstrating an interest in appealing the court's ruling.
Unpaid interns have also filed lawsuits against Conde Nast, Hearst and Gawker.
(h/t The Hollywood Reporter)