As the summer internship season gets underway, unpaid interns are continuing to file a spate of lawsuits claiming violations of the federal Fair Labor Standards Act (“FLSA”) and state wage and hour laws. On May 29, 2013, fashion designer Norma Kamali was slapped with a lawsuit from a former apprentice filed in New York federal court. This lawsuit continues a trend of unpaid interns suing employers including the Hearst Corporation, Fox Searchlight Pictures, Elite Model Management, and the Charlie Rose Show.
According to the Complaint, former apprentice, Erica Van Rabenswaay, alleges that Norma Kamali and corporate defendants Norma Kamali Design Corporation, Norma Kamali, Inc. and Norma Kamali Wellness, LLC (referred to collectively as “Kamali”) insisted that Ms. Van Rabenswaay commit full-time and forgo any compensation for the first three months of the apprenticeship. Ms. Van Rabenswaay claims that the only compensation she received was a MetroCard for commuting. After the three month unpaid period, Kamali allegedly compensated Ms. Van Rabenswaay for her work for less than a month before terminating her employment. According to the Complaint, just days after firing Ms. Van Rabenswaay, Kamali electronically posted a position seeking an unpaid apprentice to perform the same tasks performed by her.
The Complaint boldly asserts that Ms. Van Rabenswaay fell victim to a “trend where formerly entry level employees are being misclassified as unpaid ‘interns’ or ‘apprentices’ in an effort by employers to avoid paying wages” and to circumvent federal and state wage and hour laws. Specifically, Ms. Van Rabenswaay alleges that she performed the same tasks as paid employees, which included photo retouching for web and print publications, photographing products for inclusion on web and print publications, determining the composition of jewelry, and editing Kamali’s “brand book” and “look book,” among others. She claims that the apprenticeship was purely beneficial to Kamali and no formal training or mentorship was provided.
One of the attorneys representing Ms. Van Rabenswaay has developed the website, “Intern Justice,” which is dedicated to filing lawsuits on behalf of unpaid interns. In a press release, Intern Justice characterized the Kamali lawsuit as the first lawsuit of its self-described “Fair Wage Summer 2013” project. According to the press release, Intern Justice, is collaborating with another law firm and they intend to file additional lawsuits in the coming months on behalf of unpaid interns.
The Kamali lawsuit comes on the heels of a recent decision in a well-publicized unpaid internship case filed by a former Harper’s Bazaar intern against Hearst Corporation. In May, U.S. District Court Judge Harold Baer of the Southern District of New York rejected the class certification bid of a group of former unpaid interns for Hearst Corporation. Judge Baer found that although it was a “close question” the former interns failed to meet a commonality requirement for class certification because they failed to show any evidence of commonality among the interns besides a uniform policy of unpaid internship. As such, the internships varied greatly among the 20 magazines published by Hearst. Judge Baer’s ruling is a setback for plaintiffs’ attorneys representing interns with different duties and other conditions of their internships, but those interns can still pursue their claims individually. Moreover, Judge Baer’s decision likely does not affect class certification bids by interns with the same duties.
The U.S. Department of Labor ("DOL") uses the following six-factor test to determine whether an individual is exempted from pay under the FLSA or if he or she should instead be classified as an "employee" who must be paid in accordance with minimum wage and overtime laws:
- 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;
- The internship experience is for the benefit of the intern;
- The intern does not displace regular employees, but works under close supervision of existing staff;
- 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;
- The intern is not necessarily entitled to a job at the conclusion of the internship; and
- The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
If the above factors are satisfied, then the intern is not entitled to minimum wage or overtime under the FLSA. The fourth factor is generally considered to be the greatest obstacle for employers. Moreover, several states, including New York, have their own wage and hour laws with additional factors to consider in determining whether an individual is an "intern" or an "employee” who must be compensated. Accordingly, employers should carefully review their internship programs and practices to protect themselves from future wage and hour liability.