Revenge of the Black Swan – How to Work with Interns Without Getting Sued

Interns - Chris McGrath, Attorney At Law - McGrath, LLCCertain industries depend on volunteers to keep productivity high – not-for-profits and charities come to mind. But are unpaid interns the same as volunteers? Following a recent lawsuit against two major film production companies, it seems safer to treat unpaid interns like volunteers rather than treating them like unpaid employees.

The lawsuit involves a group of interns who filed suit against two production studios: Fox Searchlight Pictures, Inc. and Fox Entertainment Group. The interns claim that their work on Black Swan and another film violated both New York labor laws as well as the Federal Labor Standards Act (FSLA). In a ruling that has sent ripples of agitation throughout the entertainment industry and has gotten the attention of many business owners, the judge ruled favorably to the intern’s claims.  First, Federal Judge William Pauley granted the two Black Swan interns summary judgment—meaning, he made a determination based solely on the initial motion and response filed and without allowing more evidence. Next, he allowed the other portions of the suit to go forward as a class action, which spells more interns standing on the same side of the issues presented.

Aside from signaling a turning point in the way movies are made, what does this ruling mean to other industries and business owners?

In order to be a “bona fide internship training program” where an internship may be unpaid, an employer must answer the following six-part test:

  • Is the training similar to that given in an education environment?
  • Is the training program set up to benefit the intern?
  • Does the intern displace regular employees?  (Hint: this is a big no-no.)
  • Does the employer derive immediate advantage?
  • Is the intern entitled to a job after the internship is over?
  • Do the intern and employer both understand that there will be no wages earned during the internship?

Keep in mind the studios have stated their intent to file an appeal. This case is far from its conclusion. To stay safe, whatever the final outcome, employers would be wise to follow the Labor Department’s and FSLA guidelines. For more details on the case, including a link to the judge’s ruling, go to “Hollywood, Esq.”