Following a landmark case that found Fox Searchlight’s unpaid interns were actually employees under the definitions of the Fair Labor Standards Act (FLSA) and New York Labor Laws (NYLL), Hollywood now faces many similarly situated “unpaid interns” headed to court for justice.

Most recently, two former interns who worked for MSNBC’s Saturday Night Live in 2011 and 2012 have sued NBCUniversal, hoping for a similar outcome. Jessee Moore and Monet Eliastam say their work for NBCUniversal included booking travel arrangements, answering phones, completing paperwork, and running errands, sometimes for more than 10 hours a day, but they were never paid. Based on the favorable ruling by Judge Pauley and with the representation of Outten & Golden, the same firm that successfully won a summary judgment in the Black Swan case, the plaintiffs seek unpaid wages, interest, attorney fees, and costs for interns working for the company between July 3, 2010 and the date of a final judgment, which is estimated to total near $5 million.

Clearly, this ruling has had an immediate effect on the treatment of unpaid internships in Hollywood and elsewhere, as many employers to reach out to employment lawyers to ensure that giving college credit for the internship or simply paying minimum wage is enough to avoid a lawsuit.

The issue of unpaid internships is not entirely new, although the success of the recent Black Swan case has certainly thrust the issue into the public’s attention. In 2010, the Department of Labor issed “Fact Sheet #71“ [PDF] to help employers determine whether interns must be paid. But with Judge Pauley’s reference in the Black Swan case to the Department of Labor’s six criteria–including the requirements that internships be given in an educational environment primarily for the benefit of of the interns and that interns not be used to displace regular employees–compliance with these criteria has become much more serious.

Justin Swartz, attorney for the plaintiffs in the suit against NBCUniversal, says that he hopes the case will clearly communicate to private companies that unpaid interns cannot be used to replace entry-level employees, thereby reducing operational and labor costs. If interns do the work of an employee and contribute to a company’s business, they should be fairly paid.

Emily Green

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5 Responses to Working for Free?

  1. Jeff Sheehan says:

    The other problem with unpaid internships — particularly when they represent a gateway into a profession or into a prestigious post within a profession like the AUSA — is that they restrict access to people who can afford to work for free. Beyond the question of whether it’s worth it to the interns involved, there’s a larger question about the social costs of giving people with access to wealth one more leg up on the people who need to earn a living with their labor.

  2. Thomas says:

    This is a really interesting post Emily. I agree with Avery in that I think it’s much more likely that companies cut these intership programs entirely rather than hire more entry level employees. I’m working an unpaid internship right now at the US Attorney’s office here in Nashville, and am really concerned about the program going forward for future law students since the experience I have gained is certainly valuable.

    Additionally, here at our office we have a position called a “Special Assistant United States Attorney.” Essentially it is a year-ish long position where a person (a legit attorney) performs every type of work that a full AUSA does, but the SAUSA is unpaid. The previous SAUSA got hired when an AUSA position opened up, but now there appears to be a some form of hiring freeze preventing the hiring of new AUSAs for the time being. This SAUSA was the EIC of Georgetown’s law review and was widely successful in private practice so he certainly isn’t working for the experience, but he took this position because he genuinely wants to be an AUSA. I’m concerned with what effect this ruling might have on positions like this where (non-entry level) people take them just because they genuinely want to be there, not because they feel like they have to be (i.e. summer or post-grad interns).

  3. Brooke McLeod says:

    I don’t have as much of an issue with unpaid internships for students during summer/winter breaks. The bigger problem I have is with post-graduate internships that, while sometimes paid, pay nothing near a living wage. I feel like all of us have seen post-graduate “internships” paying $10-15 an hour in DC or NYC that supposedly allow a graduate to get their foot in the door and be next in line for some sort of prestigious job. However, these “internships” often do not turn into long-term jobs, causing graduates to move from one low-paying job to another. Thus, while I feel like this ruling is a step in the right direction, I don’t feel like it solves the problem of post-graduate internships: companies take advantage of eager graduates’ willingness to work by creating temporary jobs with no real possibility of leading to a career. (http://www.washingtonian.com/articles/people/the-age-of-the-permanent-intern/)

  4. Amanda Nguyen says:

    Emily, I’m really glad you wrote about this. I share Avery’s concerns. I’ve had great experiences with internships (both paid and unpaid) but I worry that those opportunities will be lost. The bottom line is that students need work experience and businesses welcome free labor. There is certainly value even if it is not monetary (references, experiences, connections, etc.)

    I wonder if another solution is possible. Perhaps companies cannot pay interns but can help with transportation and moving costs or help interns find housing. I hope that there is a middle ground, though I am sure these are just some of many cases and debates, I hope it isn’t the beginning of the end.

  5. Avery VanPelt says:

    Great post, Emily. I agree that interns should not be exploited in the sense that they shouldn’t be used to replace entry-level employees for the financial gain of a company or organization. However, I think a real concern resulting from this ruling is the amount of internships that will (not) be made available to those seeking them. It will be easier for many organizations to simply stop offering internship opportunities. With an already cutthroat job market, unpaid internships are often the best way to gain experience, show interest, and stay active such that paid employment will follow. For right or wrong, there are many undergraduates and graduate students willing to do unpaid internships, yet these opportunities may be lost to them.

    Also, and admittedly I don’t even remotely know the law on this, but what prevents organizations from re-categorizing interns into volunteers? I worked an unpaid internship this summer, and while I feel sure that it falls within the parameters of what is allowed for unpaid internships, I also think on some level I was volunteering (having already tapped out the externship credits). It makes no difference to me what my title was–it was the experience that mattered in the end.