Southern District Continues Trend to Find Internship Programs Run Afoul of Wage and Hour Laws

Glatt v. Fox Searchlight Pictures Inc., No. 11-CV-6784 (S.D.N.Y. June 11, 2013): In a further reminder about the risks of using unpaid interns, District Judge William Pauley III ruled that Fox Searchlight Pictures Inc. violated minimum wage laws by not paying interns for work done on the set of “Black Swan.” Two former interns claimed that they performed the work of low-level employees such as fulfilling lunch orders, answering phone calls, and organizing documents, but were improperly classified as interns and therefore worked without pay. In entering summary judgment for the plaintiffs and granting conditional class certification, Judge Pauley relied upon the following criteria set forth by the U.S. Department of Labor that demonstrate a bona fide unpaid intern: (1) the internship is similar to training that could be given in an educational environment; (2) the internship experience is for the benefit of the intern; (3) the intern does not displace regular employees, but rather, works under close supervision of staff; (4) the employer derives no immediate advantage from the intern (and, on occasion, the employer’s operations may actually be impeded); (5) the intern is not necessarily entitled to a job at the conclusion of the internship; and (6) the employer and the intern understand that the intern is not entitled to wages for the time spent on the internship. In doing so, Judge Pauley rejected Fox’s preferred “primary benefit test” as too subjective and unpredictable. In the end, Judge Pauley concluded that the plaintiffs were not bona fide interns because Fox had made no effort to educate or train them, any benefit conferred to them was incidental, and Fox received the benefits of their unpaid work in lieu of paid employees. As demonstrated by the recent flurry of similar complaints, employers should rework their existing internship programs to ensure compliance with the wage and hour laws.