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The Curious Case of the Unpaid Intern

By Maximilian J.G. Querci

An intern may be classified as a participant in a formal program to obtain practical experience for beginners in an occupation or profession. Some interns are paid, while others are not, but the latter are considered to be taking advantage of unpaid resume boosting experiences. While traditionally an intern's position and tasks are considered to be lurking in a grey area between a volunteer and an employee, it appears the grey area is considerably less so with the arrival of numerous lawsuits against major production companies and film studios.

The first slew of lawsuits that came about were brought against Fox Searchlight during the production of "Black Swan" in 2011, as well as other actions brought against Lionsgate, Warner Music Group, Atlantic Records, and publishing houses Condé Nast and Hearst Corp. http://www.latimes.com/entertainment/envelope/cotown/la-et-ct-lionsgate-interns-20140613-story.html#page=1. Since the onset of such actions, most of these companies have switched to paid internships or ceased their internship programs. Lionsgate, however, argues that if it were to change its policy and make its internship program a paid program, it would be forced to take on a substantially smaller amount of interns per term and would stand to lose approximately $300,000 to $400,000 a year in wage compensation. Id. Lionsgate's most recent turmoil involves a class-action lawsuit brought by unpaid interns who worked on The Wendy Williams Show, and claimed that the work they performed was not in accordance with the United States Department of Labor's criteria of an unpaid internship. http://www.hollywoodreporter.com/thr-esq/lionsgate-hit-class-action-lawsuit-739380.

The Fair Labor Standard Act, under enforcement by the Department of Labor, employs a six-element test to establish whether an unpaid intern's work experience and duties classify him/her as an employee. Beyond these six elements, the determination of whether an intern has an employment relationship with his/her employer depends upon all the facts and circumstances of the respective internship program. http://www.dol.gov/whd/regs/compliance/whdfs71.htm.

Of the six-element test, the two elements that serve as the basis for many of the actions being brought are the requirements that the "internship experience must be for the benefit of the intern" and the intern's duties must "not displace regular employees". Id. Herein lies the problem; when a line cannot be drawn to indicate when tasks performed by interns are no longer for the benefit of the intern vs. the benefit of the employer, it creates issues differentiating between the two.

In the lawsuit filed against Fox Searchlight by its unpaid interns, U.S. District Judge William Pauley in New York ruled last year that "Searchlight received the benefits of the interns' unpaid work, which otherwise would have required paid employees". Fox subsequently appealed Pauley's ruling with a very logical and well-supported argument that interns are not subject to wage protection under the Fair Labor Standard Act if they, and not the employers, are the primary beneficiaries of the internship. http://www.latimes.com/entertainment/envelope/cotown/la-et-ct-lionsgate-interns-20140613-story.html#page=1. Attorneys for the plaintiffs are preparing to go before the Second Circuit Court of Appeals, however no formal date has been set. http://www.hollywoodreporter.com/thr-esq/nbcu-settling-lawsuit-msnbc-saturday-741395. Such a distinction of who the primary beneficiary is in this type a relationship is murky. Is it the employer who primarily benefits from the services received, or is it the intern who benefits from the experience in performing such service? The question remains unanswered.

Could most unpaid interns be getting carried away with the current trends of these lawsuits and not really see the big picture? There is always a different perspective to take, and many former unpaid interns of Lionsgate concur. What these lawsuits and statistical figures being thrown around by the media don't explain is that many unpaid interns actually derive legitimate education and experience on the respective subject matter with which they are involved, and in many cases such instruction and experience leads to full-time employment. http://www.latimes.com/entertainment/envelope/cotown/la-et-ct-lionsgate-interns-20140613-story.html#page=1. Many previous interns for Lionsgate interviewed by the Los Angeles Times stated that their internship experience proved to be highly beneficial in their professional developments. While several of them did acknowledge they were performing tasks that coincided with the tasks of a full-time employee, they considered such experience far more valuable then sitting idly by and performing minuscule tasks. Id.

Former Lionsgate intern J.P Alanis, who interned at the film studio between 2011 and 2012, disregarded the notion that his internship was in violation of the Department of Labor guidelines. Id. Alanis, who participated in script coverage, a task usually performed by television executives or other full-time employees, saw his tasks as an opportunity to learn. "For me, I would rather stay busy and do coverage than sit around and adhere to the guidelines", said Alanis, whose responsibilities also included administrative tasks and even the occasional picking up lunch for an executive. Id. Like Alanis' circumstances, maybe the focus of unpaid interns should be on the potential for success such an opportunity can bring, rather than focus on what they think they rightfully deserve. The answer subjectively lies with each individual and what he/she seeks to from the internship experience.

While lawsuits with numerous film studios are still ongoing, the class action filed in July 2013 against NBCUniversal for misclassifying hundreds of workers as unpaid interns has reached a settlement. Due to their misclassification, the individuals bringing the suit stated in their complaint that they were "denied the benefits that the law affords to employees, including unemployment, worker's compensation insurance, social security contributions, and, most crucially, the right to earn a fair day's wage for a fair day's work." http://www.hollywoodreporter.com/thr-esq/nbcu-settling-lawsuit-msnbc-saturday-741395. While settlement terms and figures have not been released yet, the lawsuit estimated damages at approximately $5 million. Id. This may be the commencement of a shift in the trend of unpaid internships, where class-action lawsuits may start arising in various sectors outside of the film industry. With this change in trend, however, companies will start putting more stringent requirements on internship candidates, making it far more challenging for those who wish to gain valuable experience from obtaining it.

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This page contains a single entry from the blog posted on February 3, 2015 10:21 AM.

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