The latest wave of unpaid-internship lawsuits arrived last week, when former interns for Saturday Night Live and MSNBC filed a $5 million class-action suit against parent company NBCUniversal (CMCSA). The media giant joins a glamorous cast of defendants, including the filmmakers of the Oscar-winning movie, Black Swan, and glossy-magazine companies Condé Nast and Hearst.
Bloomberg Businessweek spoke to Ross Eisenbrey, a vice president of the Economic Policy Institute who specializes in labor and employment law, to learn why the interns—and one law firm—seem to be targeting workplaces that you’ve heard of.
What do these defendants have in common?
They’re all in New York, including Fox Searchlight (NWS), which was filming in New York. And [the lawsuits] have almost all been brought by the law firm Outten & Golden. Part of it is coincidence that the plaintiffs are all New York-area plaintiffs. And part of it is that New York law has a longer statute of limitations, so it makes it more worthwhile to bring cases.
Under the Federal Fair Labor Standards Act and probably in most states, you have a short statute of limitations. You only get damages going back for two years. So if you’re filing a class action, your class is going to be limited in size to people who were interns in those two years. But under New York law, it’s six years. So you have an internship program that’s been running for a long time, you can get two or three times as many people in your lawsuit and your damages are two or three times bigger. It just makes it more worthwhile for a law firm to bring the case in New York.
Is it significant that they are media and entertainment brands?
They rely on a lot of interns. There’s no question. A lot of these businesses have replaced entry-level workers with unpaid interns. I think there is a big pool of potential plaintiffs. And for the lead plaintiffs in each of them, I think they had expectations that weren’t met. They expected that it would turn into a good job and it didn’t. Or they expected to learn something on the job. It’s true that in these cases, they were not learning much. They were just being used. If you’re an accountant like Eric Glatt [who sued Fox Searchlight, producers of Black Swan], and they make you an accounting intern and have you do routine accounting work that you already know how to do, you’re not learning anything; you’re just working for free. That would piss you off.
But why haven’t we seen lawsuits emerge against, say, accounting firms?
It has to be big enough to have an intern program big enough to make it worthwhile for a law firm to bring the suit. These are minimum-wage cases. That’s all you can sue for. It’s not that much money and it’s not worth the lawyer’s time. That’s why we have widespread wage theft all across America, and lawyers are doing nothing about it, and it isn’t in their interest to bring the cases.
But even in New York, it’s still minimum wage we’re talking about. Why this law firm?
I think they’re sort of public-spirited, public-interest lawyers who believe that the law should be enforced. They are hoping that some of these suits will pay off, but I think that they’re willing to take a chance and prosecute some of these without a big payoff at the end. The way to stop this practice is to bring big suits and win. But it’s also, in the short term, a way to bring more attention to the firm and bring in more clients. Because it’s also a very high-profile advertisement.
So if the rules regarding unpaid internships start being policed more, what businesses that rely heavily on unpaid interns—outside of entertainment and media—can expect to be affected?
The PR industry actually put out special bulletin referencing their code of ethical conduct. They said, “It’s unethical to pay for interns and bill for their services.” And recommended strongly against having any at all. I do know that they’re still using unpaid interns in PR because I go on Craigslist and I see positions advertised. And the architecture industry, too: Architecture firms would use a lot of unpaid graduates of architecture school and they put an end to it. Students revolted. Universities, too. Xavier University, two years ago, announced that they would no long place people in unpaid internships. I think there’s a movement growing.
Honestly, who is supposed to police unpaid internships among companies?
You have two choices. Either the government enforces it, but there are hardly any government inspectors anywhere. The federal government, I think, has one for every 141,000 employees—1,100 for the whole country. They have to enforce the Davis-Bacon Act, the Family and Medical Leave Act, and the Polygraph Law, and 30 or statutes. They just aren’t doing this as part of their work.
That leaves private law enforcement, and there’s not really any financial incentive. Plus, if you’re an intern and you’ve taken this job and you’ve got it on your résumé and you’ve been exploited, it’s still not the best career move to sue that employer. If you’re working for Saturday Night Live and you sue them, how do you expect to get hired by The Daily Show or someplace else?