Fox Searchlight Pictures, Inc. and Fox Entertainment Group, Inc filed a motion for a partial reconsideration of the class action ruling against it. They also requested that it be stricken from the Fed. R. Civ. P. 23 New York Labor Law class action and Fair Labor Standards Act (“FLSA”) collective action definitions.
The move was a defense against last month's surprising ruling Judge William Paley III that two Fox Searchlight interns were treated as employees and therefore should be paid for the work they did on the film "Black Swan," which was released in 2010. The film Black Swan grossed over $329 million worldwide and had a budget of just $13 million, according to Box Office Mojo. The interns answered phones, removed trash and got coffee for co-workers during their time on the production.These kinds of productions often require long hours where crews might work 14-hour days. Normally some form of payroll timesheets or time and attendance would be critical to tracking their time, but in this case their time was not tracked because they were not to be paid.
Judge Paley said the work performed by the interns would otherwise have been performed for pay by employees. There are existing laws that already outline these rules. The Fair Labor Standards Act (FSLA) says companies can lawfully hire interns, but not if they are mere substitutes for paid employees. In this way, the FLSA considers using interns in this manner as more than exploitation, but an actual displacement of paid work. In addition, the judge also emphasized already existing criteria for internships that are often ignored by companies, particularly in the entertainment industry. If the internship does not exhibit the structure of a true internship, meaning they are not educational in nature, it is more about free labor. The judge ruled the two interns should have been paid at least minimum wage for the hours they worked.
The ruling is far-reaching, not just for Fox Searchlight. It suggests that internships at many organizations might have to evolve to be all paid situations in the future, or that organizations accustom to this free labor would have to invest new resources into creating more formalized internship programs with educational milestones, performance measurements, intern testing, and feedback mechanisms. Opponents of the ruling suggest that something will be lost if unpaid internships dry up. It is well-understood, particularly in a high-unemployment economy, that such a change might make an already bad situation for experience-starved new college graduates, even more dire. Less internships will mean fewer opportunities for young adults to get work experience. Currently, there are almost twice as many unpaid internships as paid.
On the other hand, opponents of unstructured free-labor internships say it's straight-up taking undue advantage of workers who need experience and training in a new field. For the young and naive they remain desperate to build their resumes no matter how much it costs them in wages not earned.
Curiously, some of the fields that most use unpaid internships, have historically been lucrative yet volatile businesses. "The companies being sued operate in a wide range of intern-heavy industries. Global brands, famous television and fashion personalities, multinational subsidiaries flush with profits — these are some of the employers that have refused to pay young workers at least $7.25 an hour." (Source: New York Times) For the film industry, the timing could not be worse. Recent results from Summer "blockbuster" film attendance has been lackluster. Recent statements by industry statesmen Stephen Spielberg and George Lucas say that the film businesses operating model of depending upon major releases for most of their revenue and profits might very well "melt down" soon.
As for inexperienced young workers, or older workers trying to gain experience to change fields, there is that old catch-22. Without experience, no employers will hire you. If you have no ways to get experience you won't get serious consideration. Of course, many young adults may simply choose to try to start their own businesses as sole proprietors or become "permalancers," that is, permanent freelancers. There are always volunteer opportunties at charitable organizations where no pay for work is acceptable.
Judge Paley's comments hint at a sea change in the way internships are handled, not merely an isolated incident. In fact, a number of similar cases involving unpaid interns are being tracked by ProPublica. Fox Searchlight's first defense is that the wrong corporate entity was sued, indicating, among all legal options, perhaps there only defense, for now, is on technicalities. If that's the best defense they can muster, this likely will mean the end unpaid unstructure non-educational internships where interns are used for free labor.
Image Credit: Brocken Inaglory, Wiki Commons
