CUT! Be Careful Using Unpaid Interns

In some industries, unpaid internships are a rite of passage to break into the business. Hollywood film studios often use unpaid interns to do everything from assist on the sets of your favorite movies to make coffee first thing in the morning. Many of the interns are “happy” to work for free to get their foot in the door, but not all interns think this arrangement is acceptable. In 2015, former interns brought wage claims against a major studio. Glatt v. Fox Searchlight Pictures, Inc. (2d Cir. 2016).

Fox found itself in a legal battle that the Second Circuit Court of Appeals ultimately resolved. The East Coast court found that the Department of Labor’s tests were too inflexible and chose to consider the primary beneficiary of the relationship. If the intern were the primary beneficiary, then no wages were owed.

Metro Goldwyn Mayer studios in California was another wage-claim recipient in 2015. Among other things, the suit addressed the unpaid interns that MGM regularly used. MGM opted to avoid court and in January 2017 resolved the suit through settlement, to the tune of hundreds of thousands of dollars.

What does this show us?  One, MGM did not seem willing to fight this battle in court. The Ninth Circuit is generally very employee friendly and MGM may not have felt like the Second Circuit’s decision would be replicated there. The Department of Labor has strict guidelines surrounding the use of interns.

If you are planning on using interns please call your MSEC representative so we can help you evaluate the process.