Tag: internships

VIACOM AGREES TO SETTLE FOR $7.2 MILLION IN INTERNSHIP LAWSUIT

Last week, media giant Viacom, Inc., agreed to pay about $7.2 million to end the class-action lawsuit filed by a former MTV intern, who alleged that the Company failed to pay minimum wage. The deal encompasses interns who worked at the Company’s New York and California offices at certain time periods. The average settlement payment to each claimant will be approximately $505 for each academic semester in which they were an intern at Viacom, with a cap at $1,010.

Although the Company agreed to pay $7.2 million, it still must be approved by the court. As such, U.S. Magistrate Gabriel W. Gorenstein asked for more financial details of the proposed settlement before he could approve. If approved, this will be the highest settlement amount awarded to interns to resolve labor claims.

This Firm will continue to monitor the developments in this case.

EX-INTERNS SUE GIORGIO ARMANI FOR WAGES

Ex-interns who worked at Giorgio Armani filed a class-action lawsuit in New York last week against their former employer.  The suit alleges that over 100 interns were misclassified as unpaid interns when they should have been paid minimum wage.  Lead plaintiff, Stephanie Figuccio, claims to have worked 16 to 20 hours per week ironing and folding clothing, setting up the floor and arranging lighting at Armani’s corporate headquarters in New York City, but was not paid at all.

Similarly, last year, Valentino Smith, an intern who worked at Donna Karan, sued the company on behalf of at least 100 other interns who claimed that they should have been paid minimum wage.  That case is still pending.

Companies in the fashion, entertainment and publishing industries are known for offering unpaid internships to college students and college graduates on the premise that the internship program will provide a valuable educational experience for students.  In some situations, however, the work experience of unpaid interns does not include vocational or academic training as promised, and instead, companies take advantage of the situation by illegally using internships as a guise for free labor like at Giorgio Armani.

  As this Firm previously posted, according to the Fair Labor Standards Act, an internship must meet certain criteria to be unpaid.  For example, the internship must be for the benefit of the intern and be similar to the training given in an educational environment and the intern cannot be hired to do the work of a regular employee.  For more information about these factors, click here.

UNPAID INTERNSHIPS UNDER THE FAIR LABOR STANDARDS ACT: IS YOUR INTERNSHIP PROGRAM LEGAL?

Unpaid internships are common in many businesses throughout the country. Some interns enthusiastically accept unpaid opportunities to get exposure while others take unpaid internships because of a shortage of regular paid jobs. With the number of unpaid internship programs on the rise, interns need to know if they are entitled to be paid. This issue was given particular attention when unpaid interns working on the set of the film “Black Swan” filed a lawsuit for unpaid wages against Fox Searchlight Pictures. See Glatt v. Fox Searchlight Pictures, Inc.

In that decision, the court ruled that unpaid interns were “employees” covered by the federal FLSA and New York Labor Law, and therefore, should have been paid. The court stated that in order for a company to have an intern work without pay, the company must establish the following:

1. The internship needs to be similar to training that would be given in an educational environment;

2. The internship experience is for the benefit of the intern;

3. The intern is not there to do the work of a regular employee, but works under close supervision of existing staff;

4. The employer that provides the training gets no immediate advantage from having the intern and on occasion its operations may actually be impeded;

5. The intern is not necessarily entitled to a job at the conclusion of the internship; and

6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship. See U.S. Department of Labor, Fact Sheet #71: Internship Programs under the Fair Labor Standards Act (April 2010).

Unless the above factors are met, the court will likely rule that an intern should be paid.

The Glatt case is under appeal with the federal Second Circuit of Appeals in New York.

We will continue to monitor the developments in this area of the law.