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.”