BLW Unpaid Intern Fox
BLW Unpaid Intern Fox
Internships are becoming increasingly hard to secure with the increasing number of students in the market each year. Most prestigious companies offer unpaid positions that are mostly taken up by students from well-off backgrounds. Their counterparts from humbler backgrounds have to make do with the few paid positions that are often oversubscribed effectively offering higher competition. Most of these firms are small and cannot offer a lot by way of practical experience. To get the same opportunities as the rest, they have to contend with large student loans to supplement their upkeep and other incidentals. Many unpaid internship positions often violate the 1938 Fair Labor Standards Act (FLSA) and the Minimum Wage law. Internships provide students with the opportunity to integrate theory and practice which is instrumental in helping them secure good employment and better-starting salaries once they complete their studies. Some interns have also gotten job offers from their host companies after the end of their internship period or even before the time elapses due to exemplary and stellar performance. Interns get to carry out many functions and tasks during their program with most companies often overwhelming their interns with large workloads and tight deadlines. For the people who can manage their loads and effectively manage their time, the benefits are immense.
In October 2012, three former interns at Fox, Eric Glatt, Alexander Footman and Eden Antalik, filed a class action suit in New York’s Southern District (Edelman 591). The class action’s claim was for unpaid minimum wages and overtime compensations for themselves and other interns in the same situation. Glatt and Footman broke away from the class action and sought independent individual partial summary judgments. The two claimed they enjoyed employee status under FLSA and the New York Labor Law (NYLL). Glatt worked accounting and postproduction on the production of Black Swan while Footman worked in its production department. On the other hand, Antalik was busy getting interns certified as a State class in New York under NYLL with an option on a National class under FLSA. Antalik worked as a publicity intern at Fox headquarters. In June of the following year, Glatt and Footman were granted their motion for summary judgment while Antalik’s New York class was certified and her National class was certified with prejudice by the district court. These rulings were based on precedents established in 1947 in the Walling v. Portland Terminal Co. The case’s proceedings fact sheets were instrumental in providing distinctions between what constitutes an intern and what constitutes an employee.
In the case of Walling and Portland Terminal Co. decision, the Supreme Court held that there were some railroad trainees who did not enjoy the employee privileges under the FLSA employee classification. The Department of Labor’s (DOL) six criteria that distinguish interns from employees were instrumental in informing the judgments (Burke and Carton 99). First, although the internship experience involves the actual and practical operation of processes in the host company, it is the same as the instructional training they get from school. Second, the intern is the ultimately the higher beneficiary from the internship experience through the practical and hands-on experience and knowledge. Third, interns work under the guidance and supervision of host company employees rather than displace them and take up their position. Fourth, host companies seldom get any immediate benefits from the internship experience and in most cases they have their processes and facilities compromised due to interns’ activities and operations. Fifth, internship programs do not necessarily have to end in employment offers or considerations. Sixth, both parties to the internship experience enter into the agreement with the full understanding that there is no obligation for any compensation or reward other than the practical and experiential knowledge the interns get from the whole experience. Providing them with an opportunity to bridge their acquired theoretical knowledge and industry practice is the best reward for the interns.
The district court found that the initial four criteria applied to the interns while the last two applied to Fox in the individual cases involving Glatt and Footman. This balance tilted the scales for the two plaintiffs being classified more as employees than interns prompting the court to hold that they did in fact act in the capacity of employees. The court then found that Antalik’s New York class distinctions were consistent with Civil Procedure 23 of the Federal Rules that states that the class certification applicant should be able to prove that the facts or laws involved in the case bear more on the majority of the individuals in the class distinction than on the applicant. The plaintiff provided damning evidence against the defendant’s internship policies where they took on more interns when their workload increases which effectively translated to the company taking on interns in lieu of hiring more staff. The same consideration was also applied to the same situation also applied to the proposed class certifications under guidelines provided by the FLSA. In that case, the court found that Fox did indeed derive significant actual monetary and operational efficiencies from using the services of interns. This was also true for many other big firms.
The defendants appealed the decision in the second circuit courts where the decisions by the lower court were vacated. Both the summary judgments for Glatt and Footman were annulled, and Antalik’s classes were decertified. Judge Walker found FLSA definitions of both employee and employ as vague and ambiguous making them highly unhelpful in ensuring an unbiased decision. This is because they were very subjective and open to interpretation. The district court’s view of Portland’s decision as narrowing and the notion that the facts that were instrumental in the determination of that case crosscut through all firms were also rebutted. The beneficiary test also came under fire since it would create a bad precedent whenever there was a semblance of perceived immediate advantages. The court held that an internship effectively becomes an employment when benefits that a company provides to its interns are considerably lower than the benefits that they derive from the interns’ service. The court also prescribed a more holistic approach to the measurement of the economic realities between the two parties (Coker 35). They prescribed evaluating whether the program provides sufficient practical training to the benefit of the student. Antalik’s classes were vacated on the premise that the primary beneficiary test is an individualized metric effectively rendering it ineffective for class certifications.
Discussion and Implications. With the pressures of keeping overheads low and enhancing good governance, it is important to develop clear policies to enhance the quality of internship experiences for the students. This should be done collaboratively with the DOL and higher education institutions and oversight authorities to enhance adherence to ethics and regulations. This should however not be used as a reason not to provide students with a fulsome and wholesome, practical experience to ensure they have better prospects after their education.
Burke, Debra D, and Robert Carton. “The Pedagogical, Legal, and Ethical Implications of Unpaid Internships.” Journal of Legal Studies Education. 30.1 (2013): 99-130. Print.
Coker, L. “Legal Implications of Unpaid Internships.” Employee Relations Law Journal. 35.3 (2009): 35-39. Print.
Edelman, Zachary. “Glatt v. Fox Searchlight Pictures Inc.” NYL Sch. L. Rev.59 (2014): 591. Print.
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