A federal district court judge ruled yesterday that Fox Searchlight violated the minimum wage law when it failed to pay its interns for their work on the movie Black Swan. This is excellent news—unpaid internships hurt mobility, exploit young workers, and are frequently illegal.
The judge, following a ruling made 15 years ago by then district court judge Sonia Sotomayor1, upheld and applied the Department of Labor’s six-part test for determining whether an internship is employment covered by the Fair Labor Standards Act or is, instead, training or education that can illegally go unpaid.
Congratulations are due to Eric Glatt, the lead plaintiff, who has become a leading activist in the fight against the deregulation of wages and the spread of unpaid labor. And congratulations, too, to the law firm of Outten and Golden, which represents Eric Glatt and plaintiffs in several cases that challenge the new sense of entitlement employers have to ignore the law and treat employees like serfs. Increasingly, trial lawyers are on the front lines of the fight to protect the dignity of work and the rights of labor. As state and federal agency budgets are cut the role of trial lawyers is growing in importance.
Judge William H. Pauley III had little trouble cutting through the muck of the defendant’s argument that really, the arrangement was voluntary and for the benefit of the unpaid workers rather than the corporation. The fact that Fox Searchlight cut its paid staff as it ramped up its hiring of interns was, by itself, proof that the relationship was illegal. But Judge Pauley also easily disposed of the most frequently heard argument in favor of letting employers off the hook for wages—the claim that the arrangement was for the benefit of the “interns” because they got experience and references for their resumes:
“Undoubtedly, Glatt and Footman received some benefits from their internships, such as resume listings, job references and an understanding of how a production office works.But those benefits were incidental to working in the office like any other employee and were not the result of internships intentionally structured to benefit them. Resume listings and job references result from any work relationship, paid or unpaid, and are not the academic or vocational training benefits envisioned by this factor. On the other hand, Searchlight received the benefits of their unpaid work, which otherwise would have required paid employees. Even under Defendants’ preferred test, the Defendants were the “primary beneficiaries” of the relationship, not Glatt and Footman.”
This decision could be a turning point in the battle to prevent the erosion of labor standards in the United States. Truly, nothing is more fundamental than the requirement that employers pay a fair wage for an honest day of work, but this 75-year old law is being chipped away at by corporations, along with colleges and universities that benefit from up to a million unpaid internships a year.
These unpaid internships are a drag on the economy, as students already burdened with student loan debt are forced to cut back their consumption of goods and services. The rise of unpaid work is lowering expectations for young workers, and it has infected the adult, non-student labor market as well, as the Fox Searchlight case demonstrates. Eric Glatt is a forty-something, not a twenty-something.
1. Archie v. Grand Cent. P’ship, 997 F. Supp. 504, 532 (S.D.N.Y. 1998).