Circuit Court to Weigh in on When Interns are Considered Employees

Circuit Court to Weigh in on When Interns are Considered Employees

The U.S. Court of Appeals for the Second Circuit has granted two petitions to appeal trial court decisions in employment cases concerning whether interns qualify as employees and therefore are entitled to minimum wage and overtime protections. The two cases in question involve similar facts, however, the trial courts arrived at exact opposite conclusions.

In Eric Glatt and Alexander Footman, et al., v. Fox Searchlight Pictures, Inc., former interns Glatt and Footman brought suit against Fox in 2011, seeking class certification for more than one hundred interns and back pay for work done for the company on the film Black Swan. While the U.S. Supreme Court has upheld unpaid internships, such internships must be for training purposes. Glatt and Footman claim their internships, which consisted of getting coffee and taking out the trash, were anything but that. Citing the Labor Department’s six-prong test that must be met in order for an internship to be legally unpaid, District Judge William Pauley permitted the class certification and granted summary judgment for the plaintiffs, ruling the interns were in fact employees because the picture company had formal and “significant” control over the interns.

In the second case, Wang v. Hearst Corporation, unpaid interns sued the magazine company on behalf of 3,000 students who worked in the name of gaining experience. However, District Judge Harold Bauer declined to certify the class stating the class lacked the element of commonality. His finding was based on the fact that the company did not have an internship policy and that each Hearst magazine utilized interns in different manners and for different purposes.

The U.S. Court of Appeal’s decision in these cases is being watched closely by many, especially those in industries that rely heavily on unpaid interns. For those industries, such as the entertainment, finance, and sports industries, a decision changing the way interns are classified could change the way these industries operate. Hearst Corporation has already stopped its practice of taking interns. To students seeking real-world experience, this could mean they graduate without any training or contacts to help them land a job. To critics of the industries, unpaid internships are nothing more than an abuse of the labor system. For employers, the outcome will determine how future internships are handled, including for what purposes unpaid interns can be utilized. Interestingly, according to the Hearst decision, so long as an employer does not have an internship policy in place, it should be protected from class actions. This, however, will not protect an employer from individual suits.

Jampol Zimet LLP

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