Daily Management Review

U.S. Court Pass A Reversal Judgement On The Issue Of ‘Unpaid Internship’


Fox Searchlight Pictures Inc. was able to turn a verdict to its favour, which stated that “unpaid internships” will be legal, if they focussed on education.

United States of America – 03 July 2015 – Daniel Wiessner reports to Reuters about the new verdict passed by the U.S. court on the subject of conducting internship on a ‘without-payment’ basis. It has been informed that the U.S government has termed that unpaid internship can be carried out, and the court will accept it as legal provided it helps the interns in their education.
The said verdict was passed by an appeal court, in Manhattan, U.S. on Thursday. The verdict thus issued reversed the decision which held the Fox Searchlight Pictures Inc. guilty of not abiding by the law and awarding internships without any payment. Daniel Wiessner informs that:
“The lower courts erred in finding the interns should have been treated as employees because Fox derived some benefit from their work, the 2nd U.S. Circuit Court of Appeals said.”
However, the appeal court at Manhattan, over ruled the previous judgement by announcing that internships are meant to educate youngsters, therefore as long as the young generation learns from the experience of an internship given “a particular field”, the payment doesn’t come into the picture.
In John Walker, the Circuit Judge’s words:
"The purpose of a bonafide internship is to integrate classroom learning with practical skill development in a real-world setting".
Nevertheless, on another instance, whereby a decision made by a judge was held for scrutiny by the court wherein the former passed supporting judgements on the issue of “The Hearst Corp” interns, working for the company’s “popular magazines”, were not paid. Consequently, both these cases were sent to the court in Manhattan so the judges could scrutinise if the said internships were sole education oriented.
Commenting on the decision, a spokesman from the Hearst Coro said that it:
"...preserves opportunities for a broad range of students to be educated in work environments to which they might not otherwise have access."
Whereas, the “unit of 21st Century Fox Inc, namely Fox Searchlight, was not open to any comments. However, Rachel Bien, as a lawyer, has represented the ex-interns in both instances and she admitted that she was “pleased” to get a “clear” verdict from the court. She stated:
"Many of the most abusive internships involving low-level tasks and grunt-type work are plainly illegal under this standard".
The interns working with Fox were part of the “Black Swan” team, which was released in the year of 2010. They worked on the project from the New York based “corporate offices” that belonged to the company. The interns involved in filling the said case claims that
“...they worked up to 50 hours a week performing various job duties.”
The case verdict, passed by the lower court, in the year of 2013, stirred many more “similar lawsuits”, whereby in the month of June the company of Warner Music Group Corp, reached an agreement of paying a sum of over “$4.2 million” to its “hundreds of interns. In fact, there were other companies like Viacom Inc, Comcast Corp's NBCUniversal and Condé Nast who had to pay an even larger sum to arrive at a settlement.
Nevertheless, the Supreme Court of U.S. never addressed the said issue; although in 1947 it announced that trainees of brakemen working at the railroad didn’t come under the payment scheme as “they did not take on the duties of regular workers”.