Unpaid Interns’ Win in “Black Swan” Lawsuit May Be Reversed on Appeal

Posted by Jeanine Gagliardi on Tue, 01/21/2014 - 05:00

The use of unpaid interns will remain at the forefront of disputes faced by businesses in the new year. The "Black Swan" case we previously reported on is now under review on appeal. And, it is going to be heard in tandem with another lawsuit for interns’ unpaid wages.

The “Black Swan” case was instituted against Fox in the U.S. District Court for the Southern District of New York by two unpaid interns who worked on the set of “Black Swan.” The District Court judge (1) permitted the suit to proceed as a class action including interns who worked in different film and television units and (2) summarily granted the interns’ claim that they were employees entitled to pay under federal law. In doing so, the judge deferred to guidelines issued by the Department of Labor. The judge recognized that different standards have been used in other cases. Fox appealed the court's decision to (1) certify the class of interns and to (2) summarily enter judgment in their favor.

The Second Circuit Court of Appeals will hear the “Black Swan” dispute in tandem with a similar case decided by a different judge in the same District. The second case was instituted against The Hearst Corporation (“Hearst”) by a woman who worked as an unpaid intern at a magazine published by Hearst. Like the “Black Swan” interns, the Hearst intern sued for unpaid wages and sought to have the case proceed as a class action including others who worked as unpaid interns at magazines published by Hearst. In his opinion, the judge in this case (1) declined to certify the class of interns and (2) denied the intern’s request for summary judgment. Rather than deferring to the Department of Labor’s guidelines, the Hearst judge analyzed all of the circumstances of the case before him.

Until the Supreme Court renders a decision in a case like these, the law concerning the use of unpaid interns will remain murky. Two things that businesses can be certain of, though, are that, under all of the standards used by courts so far, (1) the issue whether it is illegal to use an unpaid intern is a complex inquiry and (2) you must be exceedingly careful in hiring and retaining workers for no pay.

Call Today (301) 657-8184

 Google+  View Edward Sharkey's profile on LinkedIn