It may be more than a month since a federal district court judge in New York ruled against Fox Searchlight Pictures in favor of interns working on the movie Black Swan, but reactions and responses are still swirling among employers and their attorneys.
The latest critique of the ruling in Glatt v. Fox Searchlight Pictures Inc. appeared today on LawFuel.com, highlighting “how difficult it is for a for-profit business to create lawful unpaid internships.” Indeed, the heat for employers is intensifying, with cases also being brought against Hearst Corp., Conde Nest Publications, the Public Broadcasting Service’s Charlie Rose Show and this recent one against Gawker Media.
“Employers have already started to take a hard look at their internship programs,” Rachel Bien, a lawyer for the plaintiffs, told the New York Times. ”I think this decision will go far to discourage private companies from having unpaid internship programs.”
In the Searchlight ruling, District Court Judge William H. Pauley III held that unpaid interns on the movie set did not fall under the narrow “trainee” exception to the Fair Labor Standards Act’s minimum-wage and overtime requirements, despite the fact that they received academic credits for their internships. He ruled they should have been paid because they were, essentially, working as employees.
(Indeed, plaintiffs Eric Glatt and Alexander Footman, production interns on Black Swan, say in their September 2011 lawsuit that they did basic chores usually undertaken by paid employees, such as taking lunch orders, answering phones, arranging other employees’ travel plans, tracking purchase orders, taking out the trash and assembling office furniture.)
The studio also appears not to have followed an April 2010 six-factor test put out by the Department of Labor to help employers determine whether and when that trainee exception should be applied. I asked Mark Temple, employment attorney with Reed Smith, to elaborate on that list with things employers should be doing or keeping in mind. Here’s the DOL’s list of trainee-status qualifications (in bold), followed by Temple’s pointers:
1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training that would be given in an educational environment. The more an internship program is structured around a classroom or academic experience versus the company’s actual business operations, the more likely a court will find that it’s an extension of the intern’s educational environment. Companies may want to partner with educational institutions to ensure there’s some academic aspect incorporated into the program. They should also consider creating training materials that cover specific learning objectives to supplement the experiential training.
2. The internship experience is for the benefit of the intern. Many courts consider this factor to be the most important one. If the intern is primarily fetching coffee and performing routine office tasks, he or she is less likely to have been found to benefit from the experience. Indeed, that experience should be a meaningful learning opportunity — for example, as noted by the DOL, providing an intern with transferable skills, not just skills particular to the company’s business operations. To that end, consider asking interns to complete a questionnaire before starting that lays out specific learning objectives, which the company should try to meet. Also consider rotating each intern within various departments to increase his or her exposure to new skills.
3. The intern does not displace regular employees, but works under close supervision of existing staff. If an intern is primarily performing free labor, which would have otherwise been performed by paid employees, then he or she will likely be eligible for payment under the law. As explained by the DOL, to be considered a bona fide educational experience, you should provide job-shadowing opportunities that allow the interns to learn skills under the close supervision of regular employees and perform no or minimal productive work.
4. The employer that provides the training derives no immediate advantage from the activities of the intern; and, on occasion, its operations may actually be impeded. Don’t be dependent on, or derive any immediate benefit from, the unpaid intern’s work. In fact, such a program can and should disrupt normal business operations.
5. The intern is not necessarily entitled to a job at the conclusion of the internship. The internship should be of a fixed duration and not be used as the company’s probationary period for individuals who will be later considered for employment. So don’t use it as a primary tool for recruiting and don’t create any firm expectation of employment at the end of the program.
6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the program. You should consider the possibility of entering into an agreement with each intern and any participating educational institution laying out the expectations of all parties — in particular, the intern’s specific learning objectives and the company’s business expectations.
So, will all this just dampen the internship experience altogether, for all involved? Possibly. It doesn’t have to, though. Just ask yourself if your organization is legal under the six-factor test and, if not, simply consider restructuring it, says Temple. It’s also a good idea, he says, “to train [all] supervisors on the legal issues relating to intern programs to help them better understand what they can and cannot do when managing their workforce.”
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