Former unpaid interns at the Hearst Corp. may have their denial of class certification reviewed by the U.S. Court of Appeals for the Second Circuit. The District Court of the Southern District of New York (Judge Harold Baer, Jr.) granted the interns’ motion to certify the court’s opinion and order of May 8, 2013 denying class certification for intermediate appeal to the Second Circuit. Wang v. Hearst Corp., 2013 U.S. Dist. LEXIS 92091 (S.D.N.Y. June 21, 2013). In May, the district court denied plaintiffs’ motion to certify a class of unpaid interns alleging that the Hearst Corp. improperly classified them as exempt from federal and state wage and hour laws. Wang v. Hearst Corp., No. 12 CV 793 (HB) (S.D.N.Y. May 8, 2013).
The former unpaid interns at Hearst’s various magazines claim they qualified as ”employees” under the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL) and, as such, were entitled to minimum, overtime, and spread-of-hours wages. Plaintiffs had moved for partial summary judgment on whether they were, in fact, “employees,” and for class certification under Rule 23(a) and (b)(3). In the May ruling, Judge Baer denied the plaintiffs’ motion for summary judgment with respect to “employee” status under the FLSA and NYLL finding a genuine issue of material fact. The judge denied the motion under the totality of the circumstances test and based on the Department of Labor’s Fact Sheet #71 which provides the six-factors that should be applied when making a determination whether an internship program excludes interns from the ambit of federal wage and hour protections.
Judge Baer also denied the plaintiffs’ motion for class certification for failing to establish commonality under Rule 23(a)(2) and predominance under Rule 23(b)(3). ”[W]hile a close question,” the district court concluded that evidence of a corporate-wide internship policy alone is insufficient to establish commonality. “[T]hat policy alone cannot answer the liability question, which turns on what the interns did and what benefits they received during their internship.” Citing language from Wal-Mart Stores, Inc. v. Dukes, the court emphasized that the nature of the tasks performed varied broadly among the twenty magazines where the plaintiffs interned. The court also expressed concerns about the plaintiffs’ inability to fix damages, citing Comcast Corp. v. Behrend.
Notwithstanding the analysis in his May ruling, Judge Baer determined that the criteria for obtaining an order for intermediate appeal of his denial of class certification had been satisfied. For the judge, controlling questions of law with respect to commonality analysis under Dukes and predominance analysis under Behrend were present. The judge also determined that there was substantial ground for a difference of opinion as evidenced by the contrary ruling by the same court in June in Glatt v. Fox Searchlight Pictures, Inc., No. 11 Civ. 6784 (WHP) (S.D.N.Y. June 11, 2013) in which the district court granted partial summary judgment and certification of a class of unpaid interns who worked on the production of the film “Black Swan” in 2010. Judge Baer wrote “questions . . . in this case and in Glatt are difficult and one of first impression” and “clearly provide fodder for different opinions and have spawned them” acknowledging that the courts in Wang and Glatt applied the totality of circumstances test and the DOL’s six-factor internship criteria, but reached antithetical results.
We will continue to track the wave of intern wage and hour class action cases that have flooded the courts, especially in the district and state courts in New York. Employers, especially of for-profit businesses, should carefully evaluate whether internship programs comply with federal and state law standards.