Just as universities are letting out for summer and many students are planning to take on paid or unpaid internship roles in the business world, the U.S. District Court for the Southern District of New York determined some Fox Searchlight Inc.'s unpaid internships were illegal.
The lawsuit was filed by Eric Glatt and three other plaintiffs who worked on the production sets of various films. Glatt and another intern, Alex Footman, worked on the production of the Academy-Award winning film "Black Swan."
As one part of the lawsuit, Glatt and Footman argued they were employees of Searchlight and thereby entitled to payment under the Fair Labor and Standards Act. Searchlight argued the plaintiffs were not employees.
Citing numerous precedents and employment guidelines of both the New York labor laws and FLSA, the court concluded Searchlight was indeed the employer of the plaintiffs, pointing especially to the production company's "functional control" over the two young men. "And, in the end, it is all about control," according to the court's ruling.
Despite the victory for Glatt and Footman, the case's ruling doesn't mean all unpaid internships are illegal, but that they were during the movie's production.
However, the case could carry serious implications for all unpaid internships.
Maurice Pianko, director and lead attorney at Intern Justice, called the Glatt ruling "a complete game changer" and believes unpaid internships will "go away fairly quickly" because they've become a high-liability for employers.
Pianko explained employers are now starting to look at this way: Either pay interns at least minimum wage, or spend a lot more over a lawsuit.
Any employers that intend to use unpaid interns should consult the Department of Labor's test for unpaid internships, which can be found on the department's website.