Employment Attorneys Predict Growth in Unpaid Intern Lawsuits

interns-unpaidWith two former interns of the New Yorker and W Magazine suing their parent companies last week, many legal experts are predicting a growing trend in employment lawsuits against companies who do not pay (or who grossly underpay) interns for their work.
The lawsuit follows a recent ruling against Fox Searchlight Movies Studios for labor law violations, which the judge claims used unpaid interns for production tasks on “Black Swan,” the 2010 Academy Award winning film.
Employment lawyers predict that this decision, along with similar lawsuits they expect to come, may force employers to hesitate before using unpaid or underpaid interns. The practice is most common in the “glamour” industries like film and publishing; the second wave of intern cutbacks may occur in industries that have used unpaid workers to cut labor costs in a down economy.

“This trend is probably going to expand beyond media companies and beyond New York,” said Laura O’Donnell, a labor lawyer in San Antonio. “I think employers in all industries across the country need to take note.”

Lauren Ballinger served as an intern at W Magazine in 2009, where she earned  $12 a day to organize accessories, run personal errands for regular staff members and make deliveries to vendors.  The other plaintiff is Matthew Leib, who interned for the New Yorker from 2009 to 2010, and now claimed that the publisher violated federal labor laws. Leib received a flat rate of $300 for each internship period (each lasting about 3 months), where he reviewed submissions to the New Yorker’s “Shouts and Murmurs” section, responded to emails from readers, opened paper mail, and did various proofreading tasks.

The claim is a class action lawsuit on behalf of all interns for Conde Nast publications, and is based on requirement to pay an hourly minimum wage under the Fair Labor Standards Act.

The suit is being lead by Outten & Golden law firm, which is currently reviewing employment conditions for possible wage-and-hour violations, and identifying individuals who worked unpaid internships over the past six years

Wage-and-Hour Violations

Juno Turner, one of the attorneys leading the Outten & Golden lawsuit, explained that “These young people are conscious of economic and class issues. They see that people who are able to do these internships are people of means, whose families are able to support them while they work for little or no pay.”

The U.S. Labor Department determines whether interns should be paid based on a six-point test that comes out of a decades-old Supreme Court case over railroad company trainees. That litmus test factors in the educational value of the experience, and whether interns displace paid workers.

“The real key to the test is that the internship has to be for the benefit of the intern as opposed to the employer,” O’Donnell said.

It is currently estimated that half of all internships in the U.S. are unpaid. A study of students at over 300 universities determined that while paid internships enhanced an individual’s chance of getting a permanent job offer, unpaid interns fared only slightly above students who never completed an internship. The average starting pay for a graduate with paid internship experience is around $52,000, but that figure falls to $35,000 for those who had worked in an unpaid internship position.

Ross Eisenbrey of the Economic Policy Institute, stated that students should think twice about working without pay, even if the experience holds the possibility of getting their foot in the door. As Eisenbrey explains, “You signal to employers that you aren’t worth that much if you’re willing to work for nothing.”

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Emery Reddy