Internships: Out of Fashion

by Ervin Cohen & Jessup LLP
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EmpBlog-3.19.2013-runway

A former unpaid intern, Dajia Davenport, recently filed a class action lawsuit against Elite Model Management.  The lawsuit was filed in the Southern District Court of New York and seeks $50 million in connection with various violations of New York’s labor laws and the federal Fair Labor Standards Act.  Davenport alleges that she and other interns were forced to work more than 40 hours a week and were deliberately misclassified by Elite as exempt from wage requirements.

Anyone living in New York or Los Angeles will not be surprised by this.  Wanna-be models, actors and actresses (commonly referred to by residents as “waiters”) flock to these meccas in the hope of securing work, often so desperate to break into the fashion or entertainment industry that they are willing to do anything, even work for free in a so-called “internship”.  And the fashion and entertainment industries are usually all too willing to take advantage of the free labor.  Is it legal?  No more so than the “casting couch”, but that doesn’t stop it from happening, probably for the simple reason that these eager young hopefuls would rather hope than complain.

But as Ms. Davenport’s complaint illustrates, when a complaint is made, the price of an unlawful internship can be quite high.  Failure to pay wages, failure to pay minimum wage, overtime, meal and rest violations, and related penalties and attorneys’ fees and costs can add up quickly.  Of course, by the time a complaint is filed it is likely too late—the damage is done.  The better course of action is for employers—even those in the entertainment and fashion industries—to take the high road and resist the temptation of free labor by applying the simple criteria articulated by the Department of Labor to determine when an “intern” must be paid in the “for-profit” sector.  The six criteria are as follows:

1.  The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;

2.  The internship experience is for the benefit of the intern;

3.  The intern does not displace regular employees, but works under close supervision of existing staff;

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;

5.  The intern is not necessarily entitled to a job at the conclusion of the internship; and

6.  The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

In addition, although recent opinion letters have followed the six factors listed above, California’s Division of Labor Standards Enforcement has historically held that for a position to be exempt from California wage and hour laws, the training must be “an essential part of an established course of an accredited school or of an institution approved by a public agency to provide training for licensure or to qualify for a skilled vocation or profession.”  The bottom line is that all of the factors must exist in order to avoid an employment relationship and its inherent costs.

This blog is presented under protest by the law firm of Ervin Cohen & Jessup LLP.  It is essentially the random thoughts and opinions of someone who lives in the trenches of the war that often is employment law–he/she may well be a little shell-shocked.  So if you are thinking “woohoo, I just landed some free legal advice that will fix all my problems!”, think again.  This is commentary people, a sketchy overview of some current legal issue with a dose of humor, but commentary nonetheless; as if Dennis Miller were a lawyer…and still mildly amusing.  No legal advice here; you would have to pay real US currency for that (unless you are my mom, and even then there are limits).  But feel free to contact us with your questions and comments—who knows, we might even answer you.  And if you want to spread this stuff around, feel free to do so, but please keep it in its present form (‘cause you can’t mess with this kind of poetry).  Big news: Copyright 2013.  All rights reserved; yep, all of them.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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