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As we previously mentioned in our post on the Black Swan intern lawsuit, employers who utilize unpaid interns need to be sure that their internship programs comport with DOL regulations. Unpaid internships abound in certain industries and often serve as a foot in the door. However, the fact that something has “always been done that way” will not save an unwary employer from a DOL investigation or a wage and hour lawsuit, if its internship program does not contain the required educational components, or otherwise fails to comply with the DOL regulations.

The intern who is suing Hearst worked for the fashion magazine Harper’s Bazaar.  She claims to have “worked” between 40 and 55 hours per week over a 4 month period without being paid, and is being represented by the same law firm representing the plaintiffs in the Black Swan lawsuit. Once again, they are attempting to pursue a class action suit.

Interestingly, at the time of the publication of this blog post, Hearst’s internship website expressly indicates that internships are for current students and requires that applicants demonstrate the ability to receive academic credit. Compliance with such a rule could potentially shield an employer from this sort of litigation, but (presuming this requirement was in place previously) it does not seem to have deterred the claimant here.

The take-away? Employers should review their internship programs against the DOL regulations to ensure compliance, lest they be the next litigation target.

Although provided with an opportunity to get first-hand insight into the making of a movie, the “Black Swan” interns were also required to perform tasks such as preparing coffee, cleaning up and fetching food. 

The Department of Labor regulations make clear that employers do not have to pay their interns so long as ALL of the following criteria for the intern work are met:
 

1. The training, even though it includes actual operation of the employer’s facilities, is similar to that which would be given in a vocational school;
2. The training is for the benefit of the trainees or students, not the company;
3. The trainees or students do not displace regular employees, but work under close supervision;
4. The employer that provides the training receives no immediate advantage from the activities of the trainees or students and, on occasion, his or her operations may even be impeded;
5. The trainees or students are not necessarily entitled to a job at the conclusion of the training period; and
6. The employer and the trainees or students understand that the trainees or students are not entitled to wages for the time spent in training.

While the tasks required of the Black Swan interns may be commonplace in the entertainment industry, they also allowed the employer to derive a direct benefit from the interns’ activities. As the interns allege, that may have violated criteria 2 and 4 above.
 

While intern labor cases have thus far been rare, the growing number of unpaid internships coupled with the high visibility of this case should put employers on warning. Simply acting as others in your industry will not necessarily keep your company safe from potential litigation if those industry standards are not in line with the Department of Labor’s rules on unpaid internships. To avoid any potential ramifications, employers would be prudent to make sure their internship programs comply with the applicable regulations and/or consider either paying interns or partnering with educational institutions so that internships may be structured for academic credit.