Last week the Second Circuit reversed and remanded a decision by the District Court where the lower court had found that former unpaid interns for Fox Searchlight (“Fox”) were actually employees while they worked on the film Black Swan.
The interns were responsible for duties including copying documents, maintaining takeout menus, assembling furniture, taking out trash and, in one case, procuring a nonallergenic pillow for Darren Aronofsky, the film’s director. It is likely that the interns will prevail when the case is sent back to the District Court, given that the tasks performed were seemingly more beneficial to the production and post-production of the film than they were to the interns’ training and educational experience.
The court established that for an employer to lawfully treat interns as nonemployees the “primary beneficiary” of the internship must be the intern. In addition to meeting that condition, before the Second Circuit ruling, there were six points of consideration under the Department of Labor’s Fair Labor Standards Act (“FLSA”) that had to be met to determine that an internship did not constitute an employment relationship. Those criteria included the following:
In ruling in favor of Fox, the Second Circuit stated that an “intern’s employment status is a highly individualized inquiry” and that in certain circumstances an intern may be an employee. Thus, a new set of factors were proposed to substitute and further clarify the highly criticized Department of Labor’s above six-point criteria. The proposed non-exhaustive set of considerations consists of:
Ultimately, the Second Circuit decision raises the bar for future interns seeking to bring claims against current or former employers. The new guidelines may lead to many companies having to re-evaluate their unpaid internship policies and duties.
For more information on the requirements and limitations of internships and how this ruling could affect your business, please contact Philip S. Mortensen.