Unpaid internships: ‘Late Show’ lawsuit dropped, others still pending

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A former “Late Show With David Letterman” intern dropped a class-action lawsuit against CBS Broadcasting Inc., CBS Corp. and Worldwide Pants Incorporated that she had filed in New York the week prior. Mallory Musallam sued for wages on behalf of herself and other “Late Show” interns but dropped the suit last Wednesday.

Musallam issued a public apology to David Letterman, citing pressure from attorneys and her own student debt as reasons for bringing the suit. Although this lawsuit will not be going forward, several similar lawsuits are pending as the validity of unpaid internships is called into question.

Unpaid internships under federal law

All employees must be paid at least $7.25 per hour, the federal minimum wage as determined by the Fair Labor Standards Act. So how can companies get away with not paying their interns?

Because the FLSA makes an exception for internship programs. For-profit private sector employers may hire unpaid interns as long as their job descriptions meet six criteria. The job must be educational, and it cannot displace regular-pay employees. More importantly, the job must be for the benefit of the intern, not the employer. The employer is not supposed to benefit immediately from the intern’s job, and in fact, may suffer as “operations may actually be impeded.”

A rare victory for unpaid interns on ‘Black Swan’

A judge determined that Eric Glatt and Alexander Footman, interns on the set of the 2010 movie “Black Swan,” did not have a true internship experience. Ruling in their favor in a 2011 lawsuit against Fox Searchlight Pictures, U.S. District Judge William H. Pauley III in Manhattan found that Glatt and Footman were not true interns but employees of Fox Searchlight, as their internship experience was not educational enough and their employer did receive immediate benefit from their labor. The plaintiffs sought regular wages plus overtime pay and won.

Fox Searchlight appealed the verdict, rendered in June 2013, and a ruling on the appeal is expected early next year. The original intern-friendly verdict was considered a game changer for internship lawsuits, and the result of the appeal will be crucial in helping determine the future of similar internships.

Labor Department gets involved

The initial success of the Fox Searchlight lawsuit may be partially responsible for the spate of internship lawsuits that followed. None have had such a promising verdict as the Fox Searchlight suit; many have been settled or dismissed, and many more are still in progress. Some of the dozens of cases that made headlines come from the entertainment and publishing industries, where internships are common.

A suit brought against PBS’s the he “Charlie Rose” show was settled in December 2012 with terms that provided compensation for nearly 200 interns who had worked on the talk show between 2006 and 2012.

Two former interns sued Condé Nast, publisher of GQ and Vogue, for low pay. The case was settled in April 2014. Condé Nast rival Hearst, publisher of Cosmopolitan and Esquire, was the defendant in a class-action lawsuit filed in 2012. The class-action status was denied in May 2013, and in April 2014, the Department of Labor filed an amicus brief supporting the interns, marking the first time the department got involved in the matter. Concerned that the bad economy is encouraging employers to seek free labor through internships, it advised the 2nd U.S. Circuit Court of Appeals to decide in favor of the interns.

Still undecided: two separate June 2013 suits against Warner Music Group Corp. and Atlantic Records Group brought by two former interns, and a July 2013 case against NBCUniversal brought by two interns who worked for MSNBC and NBC’s “Saturday Night Live.” Talent and literary agency ICM Partners is seeking to have a complaint dismissed.

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