Articles Posted in Internships

Lucie Riviere

On July 8, 2015, in a post titled “Second Circuit Articulates New Test to Determine Whether Employers Need to Pay Their Interns,” The Harman Firm, LLP reported on the Second Circuit’s July 2, 2015 decision in Glatt v. Fox Searchlight Pictures, Inc., which established a new test to determine whether employers must pay their interns. On January 25, 2016, the Second Circuit amended that decision upon Plaintiffs’ petition for rehearing en banc. This new decision includes few but significant changes.

From September 2009 to August 2010, Plaintiffs Eric Glatt, Alexander Footman, and Eden Antalik worked for Defendants Fox Searchlight and Fox Entertainment Group, Inc. as unpaid interns. They bring claims against Defendants for failing to comply with the Fair Labor Standards Act and New York Labor Law by refusing to pay them the minimum wage and overtime pay. On February 15, 2013, Plaintiffs moved for summary judgment and class certification, among other things. On June 11, 2013, the district court rejected the “primary beneficiary” test, which focuses on what the intern receives in exchange for his work as compared with the benefit received by the employer, and instead followed the Department of Labor’s approach to determine whether unpaid interns in the for-profit private sector need to be compensated, granting Plaintiffs’ motion in part. Defendants appealed on the basis that the district court should have applied the “primary beneficiary” test. The Second Circuit agreed and vacated the district court’s decision, holding that the analysis of whether an intern is an employee and, therefore, covered by the FSLA, turns on “whether the intern or the employer is the primary beneficiary of the relationship.” To aid the analysis, the Second Circuit provided a list of “non-exhaustive factors.”

Edgar M. Rivera, Esq.

For years, employers, employees, interns, and lawyers have grappled with the following question: when is an unpaid intern entitled to compensation under the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL)? On July 2, 2015, the Second Circuit provided an answer.

Although hired by Fox Searchlight, a subsidiary of Fox Entertainment Group, as unpaid interns, plaintiffs Eric Glatt, Alexander Footman, and Eden Antalik claimed compensation as employees under the FLSA and NYLL. The FLSA and NYLL only protect “individual[s] employed by an employer” but offer little guidance on who an employee is, both essentially defining “employ” as “to suffer or permit to work.”

Yarelyn Mena and Edgar M. Rivera, Esq.

Your first internship is an exciting experience full of firsts—your first time working in an office, first time wearing business clothes, first time reporting to a boss. But one first no one anticipates is your first lawsuit. For many interns, that is the reality. Employers frequently—and improperly—fail to pay their interns any wages at all, requiring interns to sue the first company for whom they worked.

Tommy Hilfiger USA, Inc. and Fendi North America, Inc. face a proposed class action lawsuit alleging that these entities misclassified interns as exempt from minimum wage and overtime requirements. The class of more than fifty (50) interns alleges that they should have been classified as entry-level employees because they were required to do the work of employees and did not receive any educational training typical of an internship. Melanie Zuccarini, one of the interns, claims to have worked more than forty (40) hours per week, guiding tours of the corporate office, organizing the inventory, and running errands without compensation. These tasks were critical to Tommy Hilfiger’s business and, had it not been for interns like herself, Tommy Hilfiger would have had to hire employees to do these jobs. Should the Court find in favor of the plaintiffs, both fashion giants are liable for violating federal and state wage and hour law.

Senator Liz Krueger introduced a bill in the New York Senate to amend the executive law, in relation to providing certain civil rights protections for interns. The new legislation would extend the protections of the state anti-discrimination law to interns, including protection against discriminatory practices and sexual harassment and whistleblower protections.

More specifically, if the bill is passed, it would be an unlawful discriminatory practice for an employer to: “a. refuse to hire or employ or to bar or to discharge from employment an intern or to discriminate against such individual in terms, conditions or privileges of employment because of the intern’s age, race, creed, color, national origin, sexual orientation, military status, sex, disability, religion, predisposing genetic characteristics, marital status, or domestic violence victim status; b. discriminate against an intern in receiving, classifying, disposing or otherwise acting upon applications for internships because of the individual’s age, race, creed, color, national origin, sexual orientation, military status, sex, disability, religion, predisposing genetic characteristics, marital status, or domestic violence victim status;”

The bill also insists that it is unlawful to discriminate against pregnant interns by compelling them to take a leave of absence, unless pregnancy prevents the intern from performing its duties.

On January 9, 2013, Lihuan Wang, a 26-year-old Syracuse University graduate, filed a complaint against Phoenix Satellite Television U.S., the American branch of a Hong Kong-based media conglomerate and Zhengzhu Liu, the station’s Washington D.C. bureau chief who supervised both the New York and the Washington bureaus of the company. Ms. Wang brought her claim in federal court under the New York City Human Rights law.

The complaint alleges that Mr. Liu sexually harassed and sexually assaulted female employees and interns. his sexually aggressive behavior included unwanted touching, inappropriate sexual comments and sexual assault in the office and outside of it.

According to the complaint, Mr. Liu lured and pressured female interns, employees and job candidates into visiting his hotel room under the guise of work. During those encounters at his hotel, Mr. Liu would inappropriately grope them, kiss them and attempt to have sex with them. Mr. Liu induced that if they consented they would advance their careers at Pheonix.

The American Bar Association (ABA) raised cocnerns regarding the limitations imposed by the Fair Labor Standards Act (FLSA) on the ability of law students to secure work experience through unpaid internships with private law firms.

The ABA sought clarification from the department of Labor regarding certain situations where interns (either law students or students who have recently graduated) would work on pro bono matters in unpaid internships with for-profit law firms.

Usually unpaid internships are illegal because if a firm derives a profit from the work done by an intern, then the intern must receive compensation for his work because under the FSLA he would most likely be considered an employee. In its guidance letter the DOL notes that a law student intern would be considered an employee subject to the FSLA requirements “where he or she works on a fee generating matters, performs routine non-substantive work that could be performed by a paralegal, receives minimal supervision and guidance from the firm’s licensed attorneys, or displaces regular employees.” However, the firm may derive intangible, long-term benefits such as genreral reputational benefits associated with pro bono activities (because it is not immediate advantage). If interns were classed as workers under the FLSA they would be entitled to minum wage, benefits, and overtime unless they are covered by some other specific rules.

Interns are feeling the momentum of last week’s favorable court decision in which unpaid interns were successful in bringing their putative class action under the Fair Labor Standards Act (“FLSA”) and New York and California state labor laws against defendants Fox Searchlight Pictures Inc. and Fox Entertainment Group, Inc. On Monday, June 17, Justin Henry, a former Atlantic Records intern, filed a complaint on behalf of himself and other interns at the Warner Music Group. He seeks to recover claimed unpaid minimum wages and overtime wages under New York labor law.

The complaint states that Henry worked for WMG subsidiary Atlantic Recording Corp. between October 2007 and May 2008 for five days each week from 10 a.m. to 5 or 6 p.m. Henry’s duties consisted of answering the phones, faxing papers, filing papers, and retrieving lunch for paid employees. He alleges that he was not paid for any of this work.

This suit joins at least four others currently winding their way through courts across the United States, challenging the cultural notion that it is acceptable for for-profit companies to use unpaid workers. The law is clear. A Supreme Court case from the 1940s prompted the Labor Department to lay out a six-part test employers must meet in order to have unpaid workers; however, employers in competitive, creative fields often have ignored them.

Unpaid interns in “for-profit” private sector internships may have cause for celebration. After the Southern District of New York denied Xuedan Wang her class action certification against the Hearst Corporation for failing to pay unpaid interns last May, this week, Judge William H. Pauley III decided to permit Eric Glatt, Alexander Footman, Kanene Gratts, and Eden Antalik to bring their putative class action under the Fair Labor Standards Act (“FLSA”) and New York and California state labor laws against defendants Fox Searchlight Pictures Inc. and Fox Entertainment Group, Inc. Plaintiffs contended that Searchlight and Fox Searchlight violated federal and state and state labor laws by classifying them as unpaid interns instead of paid employees for their work on the production of the films “Black Swan” and “500 Days of Summer.” It’s the first time a major U.S. court has ruled that work without pay or education is illegal.

Unbeknownst to most, there are only limited circumstances under which individuals who participate in “for-profit” private sector internships may do so without compensation. This typically applies to interns who receive training for their own educational benefit and at their employers’ detriment, but only if the training meets the following six criteria:

1.) The internship is similar to training which would be given in an educational environment;

Xeudan “Diana” Wang worked at Harper’s Bazaar, an upscale women’s fashion magazine, five days per week and eleven hours per day from August 2011 to December 2011. She was responsible for tracking down the thousands of purses, shoes, and pieces of jewelry lent to the magazine for photo shoots. She also had managerial and secretarial duties, supervising eight interns working beneath her and answering the accessories director’s phone. However, as an intern herself, she was not paid for any of this.

Wang decided to sue the Hearst Corporation, the mass media giant founded by William Randolph Hearst that owns Harper’s Bazaar, for allegedly violating the Fair Labor Standards Act and New York Labor Law. She claimed that her and the thousands of other interns that worked for Hearst Corporation owned magazines made up a class for the purposes of a class action. Wang enlisted the help of Outten & Golden, specialists in wage-and-hour and misclassification cases, who sought class action status for, “All persons who have worked as unpaid interns at Hearst Magazines in New York between February 1, 2006 and the date of final judgment in this matter.” Xuedan Wang v. Hearst Corp., 2012 WL 1903787, 5 (S.D.N.Y. May 8, 2013).

On May 8, Judge Harold Baer, Jr., a Federal District Judge in the Southern District of New York, denied Wang’s motion for class certification. Under the requirements of Rule 23(a-b), Wang had to show, inter alia, that there were questions of law or fact common to the class and that they predominate over any questions affecting only individual members. Judge Baer decided that the commonality and predominance requirements were not satisfied because Plaintiffs “could not show anything more than a uniform policy of unpaid internship”, and there was “no uniform policy among the magazines with respect to the contents of the internship, including interns’ duties, their training, and supervision.” Xuedan Wang, 2013 WL 1903787, at 7-8.

Last Friday, the New York Times ran a sad, fascinating article about the unreasonable workplace demands placed on today’s young professionals, especially those in “prestige” fields like media and publishing.

After a mini-profile of a representative young worker, the story contextualizes those unreasonable demands with data:

“If I’m not at the office, I’m always on my BlackBerry,” said Casey McIntyre, 28, a book publicist in New York. “I never feel like I’m totally checked out of work.”

Ms. McIntyre is just one 20-something — a population historically exploitable as cheap labor — learning that long hours and low pay go hand in hand in the creative class. The recession has been no friend to entry-level positions, where hundreds of applicants vie for unpaid internships at which they are expected to be on call with iPhone in hand, tweeting for and representing their company at all hours.