Out of the millions of page-views this blog has received
over the six-years of its existence, the most popular post (by an almost
three-to-one margin over its closest competitor) is You should pay attention to this post if you have unpaid
interns. In that post, I discussed a lawsuit filed by two unpaid
interns who claimed that they should have been paid while working for Fox
Last week, the United States District Court for the
Southern District of New York agreed.
In Glatt v. Fox Searchlight [pdf] [an enhanced version of this opinion is available to lexis.com
subscribers], the Court applied the Department of Labor's six-factor
test and determined that that the internships should have been paid.
1. Is the training similar to what would be
given in a vocational school or academic educational instruction?
While classroom training is not a prerequisite,
internships must provide something beyond on-the-job training that employees
receive.... Footman did not receive any formal training or education during his
internship. He did not acquire any new skills aside from those specific to Black
Swan's back office, such as how it watermarked scripts or how the
photocopier or coffee maker operated.
2. Is the training for the benefit of the
trainees or students?
Undoubtedly, Glatt and Footman received some benefits
from their internships, such as resume listings, job references, and an
understanding of how a production office works. But those benefits were
incidental to working in the office like any other employee and were not the
result of internships intentionally structured to benefit them.... On the other
hand, Searchlight received the benefits of their unpaid work, which otherwise
would have required paid employees
3. Do the trainees or students work under
their close observation of regular employees without displacing them?
Glatt and Footman performed routine tasks that would
otherwise have been performed by regular employees.... His supervisor stated that
"[i]f Mr. Glatt had not performed this work, another member of my staff would
have been required to work longer hours to perform it, or we would have needed
a paid production assistant or another intern to do it."
4. Does the employer derive no immediate
advantage from the activities of the trainees or students, and on occasion are
the employer's operations actually impeded?
Searchlight does not dispute that it obtained an
immediate advantage from Glatt and Footman's work. They performed tasks that
would have required paid employees. There is no evidence they ever impeded work
at their internships. Menial as it was, their work was essential. The fact they
were beginners is irrelevant
5. Are the trainees or students not
necessarily entitled to a job at the conclusion of the training period?
There is no evidence Glatt or Footman were entitled to
jobs at the end of their internships or thought they would be.
6. Do the employer and the trainees or
students understand that the trainees or students are not entitled to wages for
the time spent in training?
Glatt and Footman understood they would not be paid. But
this factor adds little, because the FLSA does not allow employees to waive
their entitlement to wages.
Based on the balancing of these six factors, the Court
concluded the the employees "were classified improperly as unpaid interns and
are 'employees' covered by the FLSA."
This issue is not going away. According to Friday's New York Times, last week two former interns sued
Condé Nast for unpaid wages. I think it's fair to say that the sun in quickly
setting on the use of unpaid internships in corporate America.
In light of these cases, it bears repeating the
conclusion I reached in The
Employer Bill of Rights (p. 159):
Employers that use unpaid interns should pay careful
attention to this issue. It is far better to scrutinize interns under the DOL's
six factors before the agency, or a group of plaintiffs, swoop in and do it for
you. It is even better to formalize the relationship in a written internship
agreement that formally spells out how each of these six questions is answered
in your favor. Or maybe it is best simply to assume that except in rare cases,
there is no such animal as an "unpaid intern," and you should simply accept the
fact that if you are going to label entry-level employees as interns, you need
to pay them for their services.
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