Human Resources News & Insights

High-profile lawsuits show unpaid internships are under attack

Interns for the movie Black Swan, magazine Harper’s Bazaar and the Charlie Rose show are suing. They claim they should’ve been paid for the work they performed. Can they win in court?

It sounds like they might have a case.

What they’re alleging:

  • The Black Swan lawsuit. A group of former interns is suing Fox Searchlight Pictures, the producer of Black Swan, claiming they were wrongfully classified as unpaid interns. They claim they worked as production assistants, bookkeepers, secretaries and janitors for the betterment of the company. They claim to have received no educational training or credits, or wages for their work.
  • The Harper’s Bazaar lawsuit. A former intern is suing Hearst Corporation, the magazine’s publisher, claiming she was also misclassified. She claims to have been the equivalent of an entry-level employee, coordinating deliveries, managing expense reports and assisting with photo shoots, while receiving no wages.
  • The Charlie Rose show lawsuit. A former intern is suing Mr. Rose and his production company, claiming the show has interns perform background research about guests, assemble press packets, escort guests through the studio, break down the set and clean up the green room — all without compensation.

If the interns’ claims are proven true, the companies have an uphill battle ahead of them. The DOL recently said that for an internship to be unpaid, it must satisfy all six of these criteria:

  1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment
  2. The internship experience is for the benefit of the intern
  3. The intern does not displace regular employees, but works under close supervision of existing staff
  4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
  5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
  6. The employer and the intern understand the intern is not entitled to wages for the time spent in the internship.

If the interns’ claims are proven, it seems hard to fathom the companies being sued could convince a court the internships pass this six-point test.

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  • Lucas

    Essentially the same story from two years ago http://www.hrmorning.com/dols-next-enforcement-target-unpaid-internships/

    I had paid internships when i was in college and I truely valued my experience. I feel that only some companies take advantage of unpaid interns.

    However, we would better student’s experience if more companies would offer more internships. Its a very competitive market to get one and sometimes even worse than trying to get a real job.

  • Joanna G.

    There are thousands of employers who classify entry level employees as interns, or entry “exempt” to avoid proper minimum wages and over time with it. Intern is not only free, he/she can work 10-12 hours days without overtime paid – these are huge savings for employers. Unfortunately it is real.

  • Interested

    It is also unfortunate that all those future Collage Students will not have an opportunity to experience the inter-workings of so many businesses. I think Lucas is correct in his/her last comment;

    “we would better student’s experience if more companies would offer more internships. Its a very competitive market to get one and sometimes even worse than trying to get a real job”.

    My guess is they will be even harder to get in the future.

  • Jon

    As an IT director I would be happy to take on unpaid interns as I feel very strongly that we satisfy all six of the criteria. Having been forced by our HR team to offer paid internships in 2010-2011, I have canceled them simply because of the drain that they create for my salaried staff. While it seems to me that these employers were taking advantage of interns and not meeting the criteria, I am concerned that if the DOL pushes this too hard it will have a chilling effect on internships, particularly in technical fields.

    Here is my analysis of the three interns (A, B, and C) who worked for us from June 2010 to July 2011 related to the six point test.

    1) Intern B feels very strongly that the experience he gained here was of greater value than a class. November to January I conducted a network training class with two salaried staff and interns B and C in which we spent a three 20-30 minute sessions a week studying networking fundamentals. Additionally, it would have been relatively simple to use existing Work Instructions as training materials. Where work-instructions are lacking, our internal knowledge base system could serve as a tutorial. Finally, one-on-one coaching is going to occur everyday because it would be an unreasonable expectation that an intern is going to know how to do these things out of the gate.
    2) It would be impossible to argue that B and C did not benefited from their training, perhaps you could say this for A, but that is a function of the brevity of time he worked for us (2 months) and the fact that he was not seeking work afterward. (He went on to Stanford.) We have been training B and C in myriad aspects of computer support every single day. C came to us completely green, every bit of knowledge he is using on his job (May 2011) he gained here, which I’m glad for. B received ten months of experience to add to his resume, which were vital to the job he started in July 2011.
    3) This is true.
    4) There was a good 4 to 8 week lag between the time A, B, and C started and the point at which they became valuable, so I can absolutely attest that we do not gain immediate advantage, to the contrary. Honestly, our even at the end of their internship salaried staff work gets impeded at regular intervals despite pay.
    5) This is true.
    6) This would be true.

    I would be happy to offer credit to their institutions, but I cannot afford to train and pay them. That’s the worst of both worlds for me and completely disincents me to offer internships at all.