A New York federal district judge recently ruled that Fox Searchlight Pictures Inc. (“Fox”) violated federal and state (New York) minimum wage laws by failing to pay two interns who worked on production of the film “Black Swan”. The case was the first in a series of recent lawsuits filed by unpaid interns to be decided by a court.
In the decision, the Court held that Fox should have paid the interns because they were regular employees entitled to be paid at least the minimum wage. In so ruling, the Court looked closely at the Department of Labor’s (“DOL”) Fact Sheet #71: “Internship Programs Under The Fair Labor Standards Act,” and rejected the argument that a “primary benefit test” should be used to determine whether an intern should be paid.
Following the criteria set forth by the DOL for unpaid internships, the Court found that: (1) the interns received no formal training or education during their internships; (2) although the interns received some benefit from their internships, those benefits were incidental to working in the office like any other employee and were not the result of internships intentionally structured to benefit the interns; (3) the interns performed routine tasks that would otherwise have been performed by regular employees; and, (4) Fox obtained an immediate advantage from the interns’ work.
Additionally, the Court concluded that although the interns understood that they would not be paid, employees are not allowed to waive their wages under the federal Fair Labor Standards Act (the “Act”). “The purpose of the Act requires that it be applied even to those who would decline its protections,” the Court opined.
The ruling affects employers who rely on the use of unpaid interns especially during the summer months. If your company uses unpaid interns, you should make sure that your internship program complies with the law.
The case is Glatt et al. v. Fox Searchlight Pictures, Inc., case number 1:11-cv-06784, in the U.S. District Court for the Southern District of New York.