Business
5:22 pm
Thu June 13, 2013

Unpaid No More: Interns Win Major Court Battle

Originally published on Thu June 13, 2013 6:36 pm

A federal court in New York has ruled that a group of interns at Fox Searchlight Pictures should have been paid for their work on the movie Black Swan. The decision may have broad implications for students looking for their first job.

Eric Glatt filed the federal lawsuit against Fox. He says everyone always told him taking an unpaid internship was the way to get his foot in the door in the film industry.

At Fox, he worked as an unpaid accounting clerk, he says — filing, getting signatures, running checks and handling petty cash — but he was working for nothing.

"All these employers who think if they slap the title intern on the job description, suddenly they don't have to pay for it," he says.

Glatt says this week's court ruling finally bursts what he calls the myth that employers are all offering interns great educational opportunities. "Businesses are not running free schools on their work sites," he says. "What they're doing is getting people to do work that their businesses need done."

Tightening Up Regulation

The Department of Labor has set rules for when internships can be unpaid. Other courts have interpreted them to mean that unpaid interns need to be getting more from the company than the company gets from them.

But this week's ruling goes even further, saying that unpaid internships must have an actual educational component independent of school credits or the job experience.

Juno Turner, Glatt's attorney, says the ruling leaves little wiggle room. "I think that many, many internships fall into the category of wage theft and I think that this decision is a blow to that practice."

Fearing A Negative Impact

Northeastern University law professor Roger Abrams calls the decision "extraordinary." It means the good news for young people is that if you are lucky enough to get an internship, now you are also likely to get paid.

But businesses might decide that interns are not worth the expense. "I think it may have a negative impact on this entranceway into a variety of professions and that's what I would be worried about," Abrams says.

It's a worry shared by 19-year-old Juliana Rordorf, a New York University sophomore interning at a small consulting startup this summer. She says it is exactly the type of workplace that might not bother to hire interns if it had to pay; she says the company doesn't need her as much as she needs them.

"I'm getting great connections, I'm able to actually take on real tasks," Rordorf says. "Even being somewhere on time and having a real responsibility ... and I would be concerned that this would take those opportunities away from other kids, or from me in the future."

Besides, Rordorf says, she's also had bad internships but it's easy to quit an unpaid job.

Promoting Equality In The Workplace

Boston University law professor Michael Harper says the idea is not only to stop the exploitation of young people but also to address the unfair advantage that goes to those who can't afford to work for nothing.

"If you were poor you wouldn't have had that opportunity, so another thing these laws do is provide more equality in the workplace," he says.

Fox declined to comment but released a written statement that says the company is disappointed and plans to appeal a court decision it calls "erroneous."

Mark Jaffe of the New York Chamber of Commerce says the decision is already starting to make waves in the business community. "We know there's a lot of businesses out there taking advantage of the internship situation — free labor — but the gig is up. You can't get away with it anymore; somebody's watching and you cannot abuse certain situations," he says.

For his part, former intern Glatt is hoping to move on to see what he'll get in back pay and damages. Glatt could use the money. He has given up on the movie industry and is now in law school.

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Transcript

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You're listening to ALL THINGS CONSIDERED from NPR News.

Now, a big legal victory for starving young interns. A federal court in New York has ruled that a group of interns at Fox Searchlight movie studios should have been paid for their work and that the studio violated federal and state minimum wage laws. As NPR's Tovia Smith reports, the decision may have broad implications for students looking for their first job.

TOVIA SMITH, BYLINE: Eric Glatt says everyone always told him it was the way to get his foot in the door in the film industry: take an unpaid internship. So Glatt did, at Fox, where he did filing, handled petty cash, got signatures and ran checks. Basically, he says, he was an accounting clerk but working for nothing.

ERIC GLATT: All these employers think that if they slap the title intern on the job description, suddenly they don't have to pay for it.

SMITH: Glatt says this week's court ruling finally bursts what he calls the myth that employers are all offering interns great educational opportunities.

GLATT: The businesses are not running free schools on their worksites. What they're doing is getting people to do work that their businesses need done.

SMITH: The Department of Labor has rules for when internships can be unpaid. Other courts have interpreted them to mean basically that unpaid interns need to be getting more from the company than the company from them. But this week's ruling goes further, saying that unpaid internships must have an actual educational component that doesn't just come from school credit or on-the-job experience. Glatt's attorney, Juno Turner, says it leaves little wiggle room.

JUNO TURNER: I think that many, many internships fall into the category of wage theft, and I think that this decision is a blow to that practice.

ROGER ABRAMS: It's an extraordinary decision.

SMITH: Northeastern University law professor Roger Abrams says the good news for young people is that if you're lucky enough to get an internship, now you will likely also get paid. But, he says, there may end up being fewer opportunities to get lucky with if businesses decide interns are not worth the expense.

ABRAMS: I think it may have a negative impact on this entranceway into a variety of professions, and that's what I would be worried about.

SMITH: It's a worry shared by 19-year-old Juliana Rordorf - a sophomore at NYU - who's interning this summer at a small consulting startup. It's exactly the type, she says, that might not bother if they had to pay her. They don't need her, Rordorf says, as much as she needs them.

JULIANA RORDORF: I'm getting great connections, I'm able to actually take on real tasks, even in the field of being somewhere on time and having a real responsibility. And I would be concerned that this would take those opportunities away from other kids or from me in the future.

SMITH: Rordorf says she's also had bad internships, but she says it's easy to quit an unpaid job. But Boston University law professor Michael Harper says the idea is not only to stop exploitation of young people, but also to address the unfair advantage that goes to those who can't afford to work for nothing.

MICHAEL HARPER: If you were poor, you wouldn't have had that opportunity. So another thing these laws do is provide more equality in the workplace.

SMITH: Fox declined to comment, beyond a written statement that says they're disappointed and planning to appeal a decision they call erroneous.

Meantime, Mark Jaffe of the New York Chamber of Commerce says businesses are already taking note.

MARK JAFFE: We know there's a lot of businesses out there taking advantage of the internship situation - free labor - but the gig is up. You can't get away with it anymore. Somebody's watching, and you cannot abuse certain situations.

SMITH: For his part, the former intern, Eric Glatt, who sued Fox, is hoping to move on and see what he'll get in back pay and damages. He could use the money. He's given up on the movie industry and is now in law school.

Tovia Smith, NPR News. Transcript provided by NPR, Copyright NPR.