NBC Universal, Condé Nast, the Hearst Corporation, FoxSearchlight, and even Charlie Rose have been or are defendants inclass action lawsuits brought against them by unpaid interns whoserved internships at these companies or for individuals. The suitsseek to have back wages paid to those who have served as interns.Traditionally, an unpaid internship was an opportunity for thosewho lack experience to break into a particular field and gaincontacts and experiences by working in that field. The arrangementwas viewed as a win-win opportunity. Young people had theopportunity to get a foot in the door for a job, make contacts forfuture employment, and gain experience. The companies who had theunpaid interns had the opportunity to see their work habits,abilities, and fit within the organization. The companies also heldtheir help—and all without paying wages. However, the U.S.Department of Labor has held that an internship can be unpaid onlyif the intern is part of an educational training program. If theemployer uses the intern in lieu of hiring additional employees orusing existing staff, then they are not interns and must be paidcompensation according to the terms of the FLSA. The U.S. SupremeCourt has ruled on this standard in Walling v. Portland TerminalCo., 330 U.S. 148 (1947). Examples of students involved in theintern litigation include the following: • Matthew Lieb served asan intern at the New Yorker (owned by Condé Nast) in 2009 and 2010.During his time there, he proofed and edited articles, did researchfor articles, and maintained an online cartoon database. He workedthree days per week from 10:00 a.m. until 5:30 p.m. and was paidless than $1 per hour. • Lauren Ballinger served as an intern at Wmagazine in 2009 and was paid $12 per day to run errands foreditors and deliver items to vendors. A court has already foundthat Fox Searchlight Pictures violated the FLSA when it used unpaidinterns in its making of the film Black Swan. The film grossed $300million, and the class group that brought the suit had worked forvery little or nothing on the film. [Glaat, et al. v. FoxSearchlight Pictures, Inc., 2 F.R.D. 516 (S.D.N.Y. 2013)] However,other cases have held that the Department of Labor test for payinginterns is too rigid. [Solis v. Laurelbrook Sanitarium and School,Inc., 642 F.3d 518 (6th Cir. 2011)] But see Winfield v. BabylonBeauty School of Smithtown Inc., 89 F. Supp. 3d 556 (E.D.N.Y.2015). Charlie Rose faced a lawsuit from 190 unpaid interns whoworked for him from 2006 through 2012 and settled the case for$110,000. The interns will receive $110 for each week that theyworked, for a maximum of 10 weeks. The litigation is likely tocontinue because a 2013 survey by the National Association ofColleges and Employers (NACE) found that one-half of collegestudents report that their internships were unpaid. The survey wasconducted in 2013 and involved 30,000 students. The survey alsofound that students who held paid internships were more likely toobtain a job with that employer and that their salaries werehigher: 60% of students with paid internships got jobs with theiremployers at a $51,930 starting salary, whereas 37% of studentswith unpaid internships got jobs with their employers at a startingsalary of $35,721.
Please review the For the Manager's Desk section andaddress the following elements:
Discuss the ethical issues in long-hour internships.
What about internships for no pay?
Are there benefits?
Do both sides benefit from the internship programs?
