The 'Black Swan' Intern Ruling Could Change Unpaid Internships Forever

Just a month after one judge dismissed the class-action suit filed by free New York City media interns, another has now granted the Hollywood coffee-fetchers who worked on the Oscar-winning film a precedent-setting win, ruling that the two production interns "worked as paid employees." It's a pivotal decision, says the attorney for the two young plaintiffs.

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The case of the unpaid American intern just got upended — again, and maybe for good: Just a month after one judge dismissed the class-action suit filed by free New York City media interns at Hearst Magazines, another has now granted the Hollywood coffee-fetchers who worked on Black Swan a potentially precedent-setting win, ruling that the two production interns* "worked as paid employees" and that Fox Searchlight should have to pay them as such. It's a pivotal decision, says the attorney for the two young men who worked on the Oscar-winning film: "This is the first time a judge has held that interns as we know them today are employees entitled to wages and protections," the lawyer, Juno Turner, told The Atlantic Wire in a phone interview Wednesday.

Indeed, it's the first time a major U.S. court has ruled that zero dollars for legitimate work does not a legal unpaid internship make. "Considering the totality of the circumstances," reads the ruling from federal judge William Pauley, the plaintiffs, Eric Glatt and Alexander Footman, "were classified improperly as unpaid interns and are 'employees' covered by" the the Fair Labor Standards Act (FLSA) as well as New York's labor laws. (Update: Glatt and Footman tell The Atlantic Wire how the lawsuit has shaped their careers.) The judge added: "They worked as paid employees work, providing an immediate advantage to their employer and performing low-level tasks not requiring specialized training."

At a minimum, 20th Century Fox, which is seeking to reverse the decision, will have to pay out the minimum wages earned in that period by the duo. The judge also added "class certification" to a group of Fox interns, and Turner, their attorney, told the Wire that the totality of the judgment "will have a much broader impact in terms of making corporations reexamine their internship programs."

The new precedent clarifies how employers can meet six criteria that the FLSA says make it okay to use young people as workers without pay. "If you're going to not pay your interns, it's a pretty high bar," Turner said. The law states that unpaid internships must benefit the worker, not the employer, and should be a part of a formal training program, without replacing a paid employee's job. The Black Swan "internship" — much like a lot of unpaid intern situations — violated all of those tenets, ruled Judge Pauley. Here's how, in the words of his ruling (in gray block quotes):

Fox's program benefited the company more than the kids:

On the other hand, Searchlight received the benefits of their unpaid work, which otherwise would have required paid employees. Even under Defendants' preferred test, the Defendants were the "primary beneficiaries" of the relationship, not Glatt and Footman.

There was no formal training program involved:

Undoubtedly, Glatt and Footman received some benefits from their internships, such as resume listings, job references, and an understanding ofhow a production office works.68 But those benefits were incidental to working in the office like any other employee and were not the result ofinternships intentionally structured to benefit them. Resume listings and job references result from any work relationship, paid or unpaid, and are not the academic or vocational training benefits envisioned by this factor.

The Black Swan interns displaced regular workers who otherwise would have gotten salaries:

Glatt and Footman performed routine tasks that would otherwise have been performed by regular employees. In his first internship, Glatt obtained documents for personnel files, picked up paychecks for coworkers, tracked and reconciled purchase orders and invoices, and traveled to the set to get managers' signatures. His supervisor stated that "[i]fMr. Glatt had not performed this work, another member ofmy staffwould have been required to work longer hours to perform it, or we would have needed a paid production assistant or another intern to do it.

For anyone who has ever had an unpaid internship, the Black Swan situation sounds familiar, which makes this ruling even more encouraging. Indeed, many internships appear to be within the grounds of the very internship that a U.S. federal judge just found illegal, both setting a precedent for future disgruntled worker bees and also scaring potential intern abusers into paying their summer or short-term staffers some actual money.

Perhaps even more encouraging for shirked interns is the class-action status the judge bestowed on any unpaid interns who worked for Fox subsidiaries. When a judge denied Hearst a class, many declared the heroic case against unpaid errand-running all but over. "If it can't be done by a class action, then very few will sue, and very few lawyers will take the cases," a lawyer told ABC News at the time. This latest Hollywood development proves otherwise, argues Turner: "What this really does mean is interns can pursue these claims on the class basis," she said.

This article is from the archive of our partner The Wire.