Last month we reported on the L.A. Clippers’ wage suit alleging that a team of interns were compelled to perform the work of paid employees without any compensation. As the treatment and protection of interns in the workplace continues to be a hot topic, and in light of recent New York legislation passed on March 26, 2014, that granted greater employment protections for interns, a number of additional class action suits relating to intern pay have been filed in the Second Circuit.
In its recent amicus brief, the Department of Labor (DOL) told the Second Circuit that a limited exception for trainees under federal wage requirements does not apply to the unpaid interns who performed substantive tasks and filed a wage action against Fox Entertainment Group Inc.
The DOL further argued that nothing in the Fair Labor Standards Act (FLSA) suggests that for-profit employers should be permitted to circumvent their obligation to compensate individuals who are performing productive work by categorizing entry-level or temporary workers as “interns” or “trainees.”
The DOL’s brief was filed the same day that several unions (the American Federation of State County and Municipal Employees, Communications Workers of America, Service Employees International Union, and United Food and Commercial Workers) submitted their own amicus briefs. They were joined by the National Employment Lawyers Association, the Economic Policy Institute and the Writers Guild of America East, who are all pushing the Second Circuit to uphold the lower court’s findings in favor of the former Fox interns.
Similar class action suits have hit Coach Inc., Universal Music Group Inc., and Hearst Corp. in the Second Circuit. In each of these pending suits, a class of Plaintiffs, who were former interns, contends that their employer was not justified to withhold compensation under the guise of “unpaid internships.” Defendants such as Hearst adamantly contend that the interns were not employees. Hearst further argues that the practical effect of the Plaintiffs’ claims would be the end of student internships in the private sector and the losers would be the many students who seek out unpaid internships for the benefits they provide.
Employers should keep a close eye on these cases as they develop – the landscape of intern compensation decisions is constantly shifting and providing confusing and contradictory directions to businesses who wish to continue to utilize valid, educational programs. Kelley Drye can help to guide you in what the DOL and judges look for in a lawful internship program.