Unpaid Interns Win Lawsuit Against Fox

“[Fox Searchlight Pictures] received the benefits of their unpaid work, which otherwise would have required paid employees.” – Judge William H. Pauley III on the suit brought against Fox by Eric Glatt ’91 (below) and Alex Footman ’09

Eric Glatt '91

In September 2011, we posted about two Wesleyan alumni, Alex Footman ’09 and Eric Glatt ’91 who brought a class-action lawsuit against Fox Searchlight Pictures. The two argued that, when they interned on the set of Black Swan, they performed menial tasks exclusively that had no educational value. By law, unpaid internships must provide some sort of educational experience and cannot simply be used to replace paid employees with unpaid labor. The two interns argued that they had not received the educational experience they should have gotten from the experience.

Just recently, Federal District Court Judge William H. Pauley III ruled that, as Fox Searchlight Pictures treated the workers as if they were regular paid employees and did not provide any sort of educational value to the internship, the interns should have been paid. The judge explained his logic to The Hollywood Reporter

Considering the totality of the circumstances, Glatt and Footman were classified improperly as unpaid interns and are ‘employees’ covered by the FLSA and NYLL. They worked as paid employees work, providing an immediate advantage to their employer and performed low-level tasks not requiring specialised training. The benefits they may have received – such as the knowledge of how a production or accounting office functions or references for future jobs – are the results of simply having worked as any other employee works, not of internships designed to be uniquely educational to the interns and of little utility to the employer.

They received nothing approximating the education they would receive in an academic setting or vocational school. This is a far cry from [the supreme court’s decision in] Walling, where trainees impeded the regular business of the employer, worked only in their own interest and provided no advantage to the employer. Glatt and Footman do not fall within the narrow ‘trainee’ exception to the FLSA’s broad coverage.

Although Fox has vowed to appeal the decision, officially stating, “We are very disappointed with the court’s rulings. We believe they are erroneous, and will seek to have them reversed,” this case could have a dramatic impact on the world of unpaid internships.

First of all, the judge rejected the “primary benefit test,” used by many companies with internships to determine whether the internship should be paid or not. This test consists in determining whether the intern or the company gains more; if the former, the intern is unpaid, and if the latter, the intern is paid. The judge threw this out, stating that the test is too subjective. Instead, he says that unpaid internships must follow the criteria laid out by the Department of Labor: unpaid internships must not directly advantage the employer, the work must be similar to vocational training given in an educational environment, the experience must be for the benefit of the intern, and the intern’s work must not displace that of regular employees. Notably, the “primary benefit test,” then, is only one part of the greater standard.

The judge also threw out arguments that interns need not be paid if they are receiving college credits or that they are “putting their foot in the door” of the industry by getting a line on their resumes:

Undoubtedly Mr. Glatt and Mr. Footman received some benefits from their internships, such as résumé listings, job references and an understanding of how a production office works. But those benefits were incidental to working in the office like any other employees and were not the result of internships intentionally structured to benefit them… Searchlight received the benefits of their unpaid work, which otherwise would have required paid employees.

Besides the fact that some of us may (unfortunately) end up in unpaid internships during the summer or after graduation for one reason or another (experience, lack of paid work, desire to work with a specific organization that can’t afford to pay), unpaid internships reinforce social hierarchies, which Steven Greenhouse ’73, the labor writer for the New York Times who has written all the articles related to the recent unpaid intern cases, mentioned in a blog post last year:

[C]ollege graduates with wealthy parents who can underwrite their living costs during their internships get a leg up because they get a head start with coveted employers, like film production companies, publishers, literary agencies and fashion houses. But college grads whose parents cannot support them say they often have to turn to an $8.50-an-hour job at McDonald’s or Target and cannot afford to take an unpaid internship.

Ben Doernberg ’13 agreed with this statement in a comment on our first post on Footman and Glatt’s case against Fox:

[U]npaid internships are evil because they exclude the vast majority of college students who can’t afford to work for free. I work at the Career Center, and it’s clear how unfair the situation is. Some students can afford to travel to New York or LA for an unpaid internship, others have to live at home AND make money.

Why on earth should important entry level opportunities in every field be reserved for those who are already coming from a privileged background? Companies that “pay” in college credit, in effect making students pay to work, are even worse.

The judge also certified a class action exploring the internships throughout Fox. If this goes through, Fox may be forced to do what PBS interviewer Charlie Rose’s production company had to do last year after losing a lawsuit brought by Lucy Bickerton ’08: pay back wages to 189 interns, amounting to about $1,100 each for $110 per week.

What impact could this have on the job – and internship – market? Will we see fewer companies take on unpaid interns out of fear of legal action? Will companies convert unpaid internships into paid internships? Will companies be forced to actually comply with Department of Labor regulations regarding their unpaid internships? Are you in an unpaid internship right now? Are you inspired to sue your boss? Sound off in the comments below!

Related:
Further Wesleyan Exposure in the NYT
Footman ’09 on Unpaid Internships, Labor Exploitation
Bickerton ’08 v. Rose: Another Intern Rises Up
NYT on Unpaid Internships and Their Discontents—After Graduation

NYT on Unpaid Internships:
The Unpaid Intern, Legal or Not
Interns, Unpaid by Studio, File Suit
The Uses and Misuses of Unpaid Internships
Jobs Few, Grads Flock to Unpaid Internships
Judge Rules That Movie Studio Should Have Been Paying Interns
Government, Not Interns, Should Enforce the Rules

18 thoughts on “Unpaid Interns Win Lawsuit Against Fox

  1. Tomas Ancona

    I graduated, upon completion in 1980, because I was short the $800 I owed Wesleyan for a paid summer internship with an architect. I thought I was clever getting credit for work until I realized I would be spending my summer earnings, which I needed for expenses through the year. I figured I would take a class the next year in NYC after graduating and finish up. Eight years later I actually needed the degree so that I could teach a graduate course. I called Dean Beckham, and he said write me a letter about the work you’ve been doing and $800 and I’ll send your degree. Wesleyan got the money in the end. My father paid $1,300/year for Wesleyan and and I spent the next 10 years paying off a reasonable student loan. I could be resentful in some way, but the most important thing is the access to education. Today’s system is wrong, but a scrappy financial aid student won’t be held back because a few wealthy students are cruising through unpaid internships.

  2. Stop slave labor

    All internships should be paid. As an employer it is a tremendous help to have eager and motivated interns. Not only is the value in the work the intern performs, but it also produces a higher level of work from the mentor and colleagues who have to prepare the tasks. they become more efficient and the quality of the mentor’s work is enhanced.

  3. Freedom2Choose

    If their decision to work there was a consensual agreement between adults and they knew what they were getting into, I don’t think they have an argument. If, however, the company told them they were going to get an ‘educational experience’ and then didn’t deliver, they should argue that they went back on the terms of their contract or whatever. I don’t think unpaid internships are, in general, evil. I agree that it’s troubling that some people can afford to take
    internships and some can’t, but this is the result of a bigger problem that has very little to do with whether it’s legal for people to work for free. If the person agrees to work for free, they should be allowed to. They obviously see some benefit that is worth more to them than money, otherwise, like the above post says, they would get a paying job. If it’s not worth it for you to work for free, then don’t. Everyone should be able to run their own personal cost/benefit analysis and be able to decide for themselves.

    1. Michael

      What if they began with the promise of an educational/training experience, but never received it? You can’t expect them to know exactly what the experience would be like before going into it, and the employers may have knowingly misrepresented it.

      1. Bill

        If Glatt and Footman were promised an educational/training experience by Fox, then Fox ought to be accountable to that promise.

        In any case, it appears that, according to Judge Pauly’s opinion, Fox’s view of an “educational/training experience” never measured up to the law.

        1. Sarah

          This is a huge problem in the world of psychology doctoral internships. You’ve finished your classes, perhaps even finished your dissertation, but you still have to pay tuition to complete the last hurdle: the predoc internship, a one-year, full time commitment. Some interns are paid (usually minimum wage) and some are unpaid. Meanwhile, the intern is generating income for the clinic/facility by treating 12-16 patients per week at the clinic’s going rate. Final kicker: in most states, the student will need to complete an additional post doc year to be allowed to sit for the licensing exam. Psychology grad students talk about suing and unionizing, but no one has the time or resources, nor are they willing to potentially jeopardize their careers for whistle blowing.

          1. George

            I loved my internship! I learned a lot and got paid doing it at almost 3x the minimum wage! Way to go Alaska for taking care of the Justice interns.

    2. Alex Footman '09

      Hi Freedom2Choose,

      If you read the ruling you will see the following:

      The purposes of the [Fair Labor Standards] Act require that it be applied even to those who would decline its protections. If an exception to the Act were carved out for employees wi1ling to testify that they performed work ‘voluntarily,’ employers might be able to use superior bargaining power to coerce employees to make such assertions, or to waive their protections under the Act.” Tony & Susan Alamo Found. v. Sec’y of Labor, 471 U.S. 299, 301 (1985). This protects more than the Plaintiffs themselves, because “[s ]uch exceptions to coverage would … exert a general downward pressure on wages in competing businesses.” Tony & Susan Alamo Found., 471 U.S. at 302. It also protects businesses by preventing anticompetitive behavior. “An employer is not to be allowed to gain a competitive advantage by reason of the fact that his employees are more willing to waive [FLSA claims] than are those of his competitor.” Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697, 710 (1945).

      I think this is a well-worded explanation as to why it is, in fact, a bad idea to allow the kind of practice you’re talking about.

      Alex

      1. Zach

        Yo Alex, quick question:
        1) Did you receive academic credit for your Black Swan internship?
        2) If so, did you pay Wesleyan to receive this credit?

        1. Alex Footman '09

          Hi Zach,
          1) No, I didn’t, because I had already graduated that spring.
          2) That sounds crazy! Is this happening?

          1. BZOD

            I don’t know if Wesleyan does this for certain (I believe they do), but most schools will require you to pay for any credits you earn outside of your regular school year. So, for example, if you get a credit at a summer school, you may have to pay to have it transfer back to your university. In Wesleyan’s case, I know that, if you don’t pay Wesleyan directly when you go abroad, they won’t let you transfer your credit.

            The kicker is that many internships will only hire you if they know you’re getting credit – in part because it allows them to avoid paying you while feeling that you’re still “getting something out of it” or to hold you accountable to some higher standard that they would normally do by paying you. The trouble is, you often end up ACTUALLY PAYING for what can frequently be a mediocre-at-best internship.

          2. Guest

            According to my academic advisor, to whom I talked while I was in the process of applying for internships (most of which, like Zach said, are unpaid in the journalism industry), said that because most advisors and administrators hate the academic credit-for-unpaid-internship deal but understand that you can’t get the internship without that agreement, they sort of fudge the paperwork. The student and the school shake on the idea of getting credit, but nobody completes the paperwork at the end of the summer, so the student doesn’t pay for and receive a credit but still is able to participate in the internship.

          3. guest2

            I think saying that wesleyan students “often” end up paying for internships is misleading. Yes, that is the official policy, but departments realize this is ridiculous and will help you out, like mentioned by Guest. Everyone I know who went through the internship-for-credit process got their internships listed as fall tutorials by the department (and hence do not have to pay) or pretend that they will get credit and then they don’t end up paying or getting the credit. I don’t know what it is like at other schools. Outrage is in order for much of the problems of unpaid internships, but the idea of paying for internship credit seems to be an unenforced policy and therefore not actually a huge issue.

            If any readers have had to pay for credit for internships speak up! but i’ve never heard of it actually happening.

            -’13

          4. BZOD

            Okay, cool. While it’s annoying that students/departments/Wesleyan even have to jump through these hoops to get students in internships, it’s reassuring to know that Wesleyan doesn’t actually end up making its students pay for unnecessary credits. That said, I know that some schools aren’t so lenient, as I have friends in other universities who have had to pay for their internships.

          5. Sarah

            I paid tuition for a required pre doc internship at a school other than Wesleyan. For a full time, one-year placement, during which I generated about $1000/weekly, I received a $5K stipend and no benefits.

          6. Zach

            BZOD mostly explained this below, but in some cases, yes. In journalism it’s quite common for companies to require interns to get academic credit for an unpaid internship (or at least be *eligible* for academic credit). At Wesleyan, unless you qualify for need-based grant financial aid, this requires you to pay for extra per-credit tuition. In other words, not only being an unpaid intern, but paying to work.

            Wesleyan’s policies are explained here: http://bit.ly/155UdZ0

      1. Mr. Justice Holmes

        “It is settled by various decisions of this court that state constitutions and state laws may regulate life in many ways which we, as legislators, might think as injudicious, or, if you like, as tyrannical, as this, and which, equally with this, interfere with the liberty to contract. Sunday laws and usury laws are ancient examples. A more modern one is the prohibition of lotteries.

        “The liberty of the citizen to do as he likes so long as he does not interfere with the liberty of others to do the same, which has been a shibboleth for some well known writers, is interfered with by school laws, by the Post Office, by every state or municipal institution which takes his money for purposes thought desirable, whether he likes it or not.” Lochner v. New York, 198 U.S. 45, 75 (Holmes, J., dissenting).

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