In the spring of 2010, Nancy Leppink, then-acting administrator of the Department of Labor’s Wage and Hour Division sent shock waves throughout the employer community and inspired the plaintiff’s wage and hour bar when she told the New York Times “[i]f you’re a for-profit employer or you want to pursue an internship with a for-profit employer, there aren’t going to be many circumstances where you can have an internship and not be paid and still be in compliance with the law.” (emphasis added). You can imagine what soon followed. Within months of Leppink’s pronouncement, the floodgates opened and the first of many unpaid intern wage and hour class and collective actions were filed in the federal and state courts in Manhattan. This wave of litigation started with Glatt et. al. v. Fox Searchlight Pictures, Inc., a suit filed by unpaid interns asserting that they had been misclassified and should have been paid as “employees” during the nine months in 2010 they spent working in and around the set of the film “Black Swan.” In the two years following the filing in Glatt, approximately 12 more unpaid intern wage-hour actions were filed in either the federal District Court for the Southern District of New York or the New York State Supreme Court, New York County, with the greatest flurry of filing activity and litigation occurring throughout this summer.
The two most notable developments during the summer in this recent wave of litigation involved the first two cases filed in the District Court of the Southern District of New York: Wang et. al. v. Hearst Corp. and Glatt v. Fox Searchlight Pictures, Inc. As we previously discussed, in May, the SDNY (Judge Harold Baer, Jr.) denied the Wang plaintiffs’ partial motion for summary judgment on whether the interns qualified as “employees” entitled to federal and state wage-hour protections and also denied their motion for class certification under Rule 23 for the NYLL claims and collective action under FLSA § 216(b) for the federal wage claims. In June, Judge Baer granted the interns’ motion to certify the court’s May order denying class certification for immediate appeal to the Second Circuit. Judge Baer determined that there was substantial ground for a difference of opinion as evidenced by the contrary ruling in June by the same court (different judge) in Glatt v. Fox Searchlight Pictures, Inc. in which the SDNY district court (Judge William H. Pauley III) granted the unpaid interns’ motions for class certification and partial summary judgment.
Earlier this week, Judge Pauley, following in the footsteps of Judge Baer, granted Fox Searchlight’s motion to certify for immediate appeal to the Second Circuit its ruling that the film company’s unpaid interns qualified as statutory employees under the FLSA and NYLL. Judge Pauley acknowledged the intra-district conflict and the contrary ruling on the issue by Judge Baer in Wang. Judge Pauley, in support of his ruling, concluded that immediate appeal was appropriate because “[t]he standard for determining whether an unpaid intern is an ‘employee’ covered by the FLSA and the NYLL is a controlling question of law . . . The standard permeates the case, affecting liability as well as the propriety of certifying a class action and an FLSA collective action.” Judge Pauley also acknowledged the wave of unpaid intern wage-hour actions in the SDNY: “Several intern cases have been filed in the Southern District of New York since [the court's previous] order, and this issue affects all of them.” Finding a substantial basis for a difference of opinion as to the standard that should be applied based upon the intra-district split and by the disparate approaches taken by other jurisdictions, Judge Pauley concluded that immediate appeal to the Second Circuit was appropriate.
The Second Circuit has not yet ruled on whether to take the Wang appeal. With the certification of immediate appeal in Glatt, the Second Circuit is more likely now to grant review by consolidating the cases to resolve the intra-district conflict over the standard for courts to use in deciding whether an unpaid intern is a statutory “employee” under the FLSA and the NYLL. This was one of the hottest employment law issues of the summer and there does not appear to be an immediate end in sight, especially in the SDNY. As we’ve promised in the past, we will continue to track the wave of unpaid intern wage-hour class action cases and will report if and when the Second Circuit decides to grant review of the Wang and Glatt cases.