Is It Illegal to Use Unpaid Interns?
A recent agreement to settle a New York lawsuit reminds us of the care that businesses must take when using unpaid interns. In the case, a group of individuals that had served as unpaid interns for Charlie Rose’s talk show sued Charlie Rose. The interns claimed that state law required Rose to pay them for the work that they performed. Rather than try the case, Rose paid $250,000 to settle the matter.
Other similar lawsuits are still pending. For example, the "Black Swan" case we previously reported on is proceeding in court. In that case, two men who worked as unpaid interns on the set of "Black Swan," a Fox Searchlight Pictures (“Searchlight”) film, filed suit against Searchlight. The interns claimed that Searchlight violated federal and state labor laws by failing to pay them. The court recently permitted the "Black Swan" interns to expand the scope of their lawsuit.
Searchlight is one of several film and television units that make up Fox Entertainment Group, Inc. (“Group”). The "Black Swan" interns discovered that the policies and procedures that govern unpaid internships at Searchlight are applied to all of the Group’s interns. For this reason, the "Black Swan" interns sought leave to expand the scope of their complaint to add claims for unpaid interns who worked in any of the Group’s units. The court granted the "Black Swan" interns’ request, exposing the Group to additional liability.
Businesses that use or intend to use unpaid interns must comply with legal standards governing the practice. Guidelines issued by the federal government are available online. The standards are rigorous, and they preclude the use of interns under circumstances that many businesses believe (wrongly) are just fine. Among the guidelines are that the internship be for the benefit of the intern and that it be similar to training which would be given in an educational environment.
If you have questions concerning the application of these guidelines to your particular circumstance, please contact us.