A federal
judge has held that unpaid interns for a movie production company were
employees under the federal Fair Labor Standards Act (FLSA). The plaintiffs were unpaid interns for a
movie production company in the filming and post-production of the movie Black
Swan. After the internships concluded, the interns
sued under the FLSA for its wage and hour protections (minimum wage, etc.).
Before ruling
for the interns (at the Summary Judgment stage) the Judge noted that because the
FLSA is a “remedial” statute an “expansive interpretation of its provisions” is
warranted so that the statute will have “the widest possible impact in
the national economy.” (emphasis added)
The Judge
first found that an employment relationship existed under both the Formal
Control Test and the Functional Control Test.
The Judge
then looked at whether the movie interns fell within the trainee exception to FLSA
coverage established by the U.S. Supreme Court in Walling vs Portland Terminal Co., 330 U.S. 148 (1947). The Judge also relied on a U.S. Department of
Labor Fact Sheet (FS71) based on Walling
that lists six criteria for determining whether a person is a trainee not
entitled to employee status. The movie
production company argued that the DOL criteria were not an accurate reflection
of the law and for a primary beneficiary test.
But the Judge disagreed, finding that the DOL criteria – which use a
sole beneficiary test - had “support in Walling” and are entitled to deference.
The Judge
then examined the criteria and found that the interns were not trainees and
were entitled to FLSA protections because i) the interns were not given training
like in an educational environment, ii) the interns were not the sole
beneficiary of the internships, iii) the interns’ work displaced paid employees,
and iv) the interns’ work was “essential” and provided immediate advantage to
the employer. The Judge noted that although
the interns knew going in that they would not be paid that did not matter because
employees are not permitted to decline the protections of the FLSA.
The decision
is Glatt v. Fox Searchlight Pictures Inc.,
11 Civ 6784 (WHP) United States District Court for the Southern District of New
York. Memorandum and Order issued June
11, 2013.
Coming soon:
The law on unpaid internships in Illinois
Submitted by Brian D. Moore, Class of ’92.
brian@moorelawpc.com
www.moorelawpc.com