As we reported earlier this year, an unpaid intern had sued the Hearst Corporation asserting that she was improperly classified as an intern and should have been considered to be an entry-level employee entitled to employee pay and benefits. Her case is proceeding in court in New York and the judge recently issued an Opinion and Order permitting her to proceed with her case as a type of class action.
Prospective litigants in a case brought under the FLSA (Fair Labor Standards Act) must take action to demonstrate a willingness to participate in that matter. Unlike the typical class action, where class members are presumed to be included unless they affirmatively “opt-out” of the litigation, prospective plaintiffs in an FLSA “collective action,” such as the interns here, must affirmatively “opt in” to be part of this law suit. At this early stage in the litigation, the plaintiff only needs to make a modest showing to the Court that there were other individuals who were similarly situated to her who were also likely victims of the employer’s allegedly improper classification, in order for the Court to allow the case to proceed as a collective action. Whether she will actually win her case in the end still remains to be seen.
In these summer months, this is a good reminder that employers should take care when hiring unpaid interns to provide services for their companies. In order for those individuals to be truly unpaid, they need to satisfy all of the requirements set forth in the Department of Labor Regulations. These requirements are also discussed in our prior blog. As the Hearst Corporation is learning, there are risks to misclassifying interns incorrectly when they should be treated as employees. Make sure that your company is doing it right.