Unpaid Internships may be more costly than you think: follow-up to recent post

On June 11, in Glatt v. Fox Searchlight Pictures, Inc.., the US District Court for the Southern District of New York held that unpaid interns who worked for on the movie “Black Swan” had been improperly classified, and were entitled to pay for all hours work.  Focusing on the six factors delineated in the DOL fact sheet, discussed here, the Court found that the interns worked on the same tasks and in the same manner “as paid employees work, providing an immediate advantage to their employer and performing low-level tasks not requiring specialized training.”  Further, the Court stated, “[t]he benefits they may have received … 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.”  In other words, “[t]hey received nothing approximating the education they would receive in an academic setting or vocational school.”

The Court also found that the corporate parent of the production company for which the interns directly worked was a “joint employer” with the production company, for purposes of the FLSA.  As a result, the parent corporation was jointly liable with the production company for payment of wages.

Whether a particular position qualifies as an unpaid internship under the law is a fact-specific inquiry, and errors in classification can be very costly. To avoid these errors, please contact your employment counsel for help.