Labor & Employment

2nd Circuit says 2 judges used wrong test in deciding high-profile cases over unpaid internships

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Do unpaid internships primarily benefit the employer? Or the interns?

That is the question two federal judges should have asked, but didn’t, in ruling on lawsuits claiming that internships at two major media and entertainment companies violated the Fair Labor Standards Act, a federal appeals court said Thursday.

In a detailed decision (PDF) in the case against Fox Searchlight Pictures Inc. and Fox Entertainment Group Inc., the New York-based 2nd U.S. Circuit Court of Appeals called a multifactor test developed by the U.S. Department of Labor “too rigid.”

The appeals court sent the case back to the trial court, which had ruled in favor of plaintiff interns who worked on Fox’s Black Swan movie.

A 2nd Circuit summary order (PDF) in another internship lawsuit involving Hearst Corp. sends it back to the trial court as well, for “for further proceedings consistent with our opinion” in the Fox Entertainment case.

The Los Angeles Times (sub. req.) and Reuters have stories.

Related coverage: “In Latest Misclassification Suit, Interns on Hit Movie Black Swan Seek Pay for the Work of 100s” “Winning, so far, in trial court, Hearst wants 2nd Circuit to clarify intern issue after new ruling”

ABA Journal (2013): “More unpaid interns say they want to be compensated”

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