Decision: In late November, the Second Circuit granted interlocutory review of two conflicting decisions issued by trial courts in the Southern District of New York. In Fox Searchlight Pictures, former interns alleged that they should have been paid as “employees” during the hours they worked on the set of the film “Black Swan.” U.S. District Judge William Pauley agreed that the interns were employees and that Fox Searchlight would be liable for violating minimum wage and overtime laws. The court also granted the interns’ motion for class certification. In an earlier decision in Wang et. al. v. Hearst Corp., Judge Harold Baer denied the interns’ motion seeking a summary adjudication that they were in fact employees and also denied the interns’ motion for class certification.

Impact: These cases are just two in a recent wave of wage and hour cases brought by interns. The Second Circuit’s impending ruling should provide employers with further clarity concerning the law surrounding internship programs. In the meantime, companies with such programs should confirm that they have properly classified their interns in compliance with the Fair Labor Standards Act and applicable state laws. The Department of Labor recommends that courts weigh multiple factors to determine whether an individual is properly classified as an unpaid intern, including:

  • whether the internship is similar to training which would be given in an educational environment;
  • whether the internship experience is for the benefit of the intern;
  • whether the intern displaces employees;
  • whether the employer that provides the training derives any immediate advantage from the activities of the intern;
  • whether the intern is entitled to a job at the conclusion of the internship; and
  • whether the employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.