Interns: The Next Installment in the Unpaid Intern Legal Battles

You may recall previous blog posts surrounding lawsuits over some unpaid interns in film. (Don’t worry, this isn’t the kind of sequel where you need to have seen the previous installments). Essentially, a group of interns who worked on the Fox Searchlight Pictures’ “Black Swan” sued Fox Searchlight on the grounds that they should have been paid at least minimum wage under the Fair Labor Standards Act.  Back in 2013, the plaintiff’s won.  The crux of the suit provided that if employers maintain an unpaid internship program, those interns must be provided training as if in an “educational environment” and, perhaps more importantly, the intern must provide no material benefit to the employer.  In other words, in order to remain unpaid, the intern cannot practically function as an assistant to company employees by getting coffee, making copies, and running errands. In our sequel, we reported that in 2015, the United States Court of Appeals for the Second Circuit vacated the “Black Swan” decision, holding that the lower court erred in focusing too much on the above criteria in determining whether an internship can be unpaid and that the current criteria is adopted from old legal precedent and “too rigid.” In our most recent installment, we introduce some new characters.  Aulistar Mark worked at Gawker, a New York City based online media company and blog network (famous for blogs such as Lifehacker, Deadspin, and Jezebel), for three months in 2010.  Hudson also worked at Gawker, back in 2008.  Mark and Hudson, along with two other plaintiffs who have since dropped out of the suit, sued Gawker and its founder Nick Denton in June 2013.  According to the complaint, their work included researching and writing stories, which was “central to Gawker’s business model as an Internet publisher.” Plaintiffs, like the Black Swan interns, argued that they should have been paid at least minimum wage under the FLSA.  Recently, a New York federal judge Alison J. Nathan ruled in favor of Gawker. First, Hudson’s (and other similar plaintiffs who sought class-action certification) claims were dismissed as time-barred. More importantly, however, Mark’s claims were dismissed. “Mark’s time with [Gawker blog] Kotaku was a bona fide internship in which Mark traded his labor for significant vocational and educational benefits, and these benefits outweighed those received by defendants in the form of Mark’s work and the ability to evaluate him for future employment,” Judge Nathan wrote.  Essentially, Mark benefitted from the program at least as much as Gawker.  Moreover, Judge Nathan determined that while Mark did similar work done by paid employees, he failed to provide any evidence Gawker used the interns to displace paid employees or that it would’ve hired more paid employees had there been no interns. Further, Mark received credits associated with his work at Gawker.  Ultimately, Marks had obtained sufficient benefits to be properly classified as an “intern,” not an “employee,” and was therefore not owed FLSA-based compensation. So what does this mean for employers?  Although this case is one small step in the right direction, we nevertheless suggest you tread lightly when it comes to unpaid interns.  Particularly if they are not receiving college credit.  If you choose to retain unpaid interns, make sure that the interns glean some benefit from the program, and that that benefit is at least as much as yours from their work.  That means acting more like an employee, and less like a coffee-courier.

Any questions? Please contact Sara