In a decision that could send shockwaves throughout the country and have dramatic repercussions for recent college graduates, the U.S. District Court for the Southern District of New York has ruled that Fox Searchlight Pictures violated federal and state minimum wage laws by not paying their production interns. In his Glatt v. Fox Searchlight Pictures Inc. decision, Judge William Pauley noted that two interns who worked in production of the movie Black Swan received assignments that were no different than those given to regular employees, such as taking lunch orders, answering phones, and handling minor logistical tasks such as arranging travel plans.
Judge Pauley first examined whether the defendants exercised a right of control over the interns. In ruling such control existed, the Court examined the Department of Labor standards for unpaid internships (U.S. Dept of Labor Fact Sheet #71, April 2010). The Court identified and considered the following six criteria:
- Whether the intern receives training similar to an educational environment
- Whether the internship experience is for the benefit of the intern
- Whether the intern displaces regular employees
- Whether the employer receives an immediate advantage from the interns work
- Whether the intern is entitled to a job at the end of his or her internship
- Whether the employer and intern understand they are not entitled to wages
Taking all six factors into consideration, the Court concluded the employer in the case exerted functional control over the interns.
As a whole, the Court found that the plaintiffs should be considered employees, and as such should have been paid since they did the same tasks that paid employees would do, tasks that directly benefitted the defendants. Furthermore, the Court held that the benefits gained by the plaintiffs were not the result of specialized training offered by the defendants, but instead was experience that any paid employee would gain.
Undoubtedly, this ruling will have a dramatic impact not only on how employers structure their internship programs, but also on recent college graduates struggling to find resume building experience in the current weak job market.
If you have questions concerning the impact of this ruling on your internship program, or other questions concerning potential liability for unpaid wages, please contact the employment law attorneys at McMahon Berger P.C.