Feds Exempt from Unpaid Intern Lawsuits Spurred by DOL Regulations

In 2010, the Department of Labor (DOL) put forth new regulations to specify how a private sector business could determine if it was mandated to pay an intern a salary. Under the Fair Labor Standards Acts (FLSA), the term “employ” is broadly defined and includes such phrases as “suffer or permit to work.” 

According to DOL:

Covered and non-exempt individuals who are “suffered or permitted” to work must be compensated under the law for the services they perform for an employer. Internships in the “for-profit” private sector will most often be viewed as employment, unless the test described below relating to trainees is met. Interns in the “for-profit” private sector who qualify as employees rather than trainees typically must be paid at least the minimum wage and overtime compensation for hours worked over forty in a workweek.”

In order for a for-profit private-sector business to qualify to have unpaid interns working in their companies, they must answer “yes” to DOL’s following questions:

• Is the experience primarily for the benefit of the intern and not the employer?
• Is the internship comparable to training offered by an educational environment?
• Is there no displacement of a regular employee by the intern, and does s/he work under close supervision of existing staff?
• Is the intern not necessarily entitled to a job at the conclusion of the internship?
• Does the employer derive no immediate advantage from the activities of the intern?
• Does the employer make clear to the intern, from the outset, that the internship is unpaid?

Since DOL made these policy changes regarding private sector internships in 2010, Forbes reported last week that unpaid intern lawsuits are on the uptick.

Your for-profit business hires an unpaid intern in a seemingly win-win situation: the intern gets “real-life” experience while learning the ropes, with a chance to impress for regular employment, and the business gets support from an enthusiastic, but so-far unskilled, helper. But a trend is increasing in wage and hour litigation: unpaid “interns” suing for pay under the federal Fair Labor Standards Act (“FLSA”). Recently, unpaid interns have filed suits against Hearst Corp., Fox Searchlight Inc., and the “Charlie Rose” show. In addition, an intern paid a stipend filed a class action suit against his employer. It alleged that his stipend, compared with the hours he worked, fell short of minimum wage standards under the FLSA and New York state law.

In December, PBS’s The Charlie Rose show said it would pay 189 interns in back wages. The settlement, according to the New York Times, stipulated that a number of interns would receive approximately $1,100 each per week for a maximum of ten weeks–the period of a school semester.

The main plaintiff, Lucy Bickerton, said she was not paid when she worked 25 hours a week for the “Charlie Rose” show from June through August 2007. Ms. Bickerton said her responsibilities at the show, which appears on PBS stations, included providing background research for Mr. Rose about interview guests, putting together press packets, escorting guests through the studio and cleaning up the green room.

Ms. Bickerton said in an interview that the settlement was “a really important moment for this movement against unpaid internships.”The settlement deal says that Rose and his production company “do not admit any liability or wrongdoing” and that they agreed “solely for the purpose of avoiding the costs and disruption of ongoing litigation and to settle all claims.”

A spokesman issued a statement to the Times on behalf of Rose and his show’s production company, saying, “our interns are not employees; they did not perform ‘work’ for the program and none of them ever expected to be paid for their internship.”

Ms. Bickerton’s lawsuit was brought under New York State law, which allows plaintiffs to seek back wages going back six years, and not under federal law, which sets a three-year limit.

The lawsuit noted that unpaid internships have proliferated among many white-collar professions, including film, journalism, fashion and book publishing. As more interns have complained and the Labor Department has threatened taking action, some companies have changed their compensation policy. Fox Entertainment started paying its interns in July 2010 — most were unpaid before that — and Condé Nast adopted a policy of giving its interns a $550 stipend per semester.

Although more private sector businesses are now paying their interns, the federal government continues to offer unpaid internships. The White House internship program is an unpaid internship. Each semester, 100 interns are selected from 6,000 applicants to work at the White House. Politics Daily reported in 2010 about a happy White House intern who worked for First Lady Michelle Obama:

For the 100 interns selected every term out of a pool of 6,000, menial work like being “the bag girl” is accompanied by unique opportunities and an experience of a lifetime.

Dorsainvil, a 2009 women’s studies graduate of Emory University, was placed in the Office of the First Lady last fall. Her primary task was to read, sort, process and respond to constituent letters — hundreds of them every week. She also worked with the office’s deputy director to coordinate volunteer work and assisted with the First Lady Social Office on such events as the RFK Human Rights Awards and the state dinner for India’s prime minister.

All of these events helped Dorsainvil understand the qualities of effective leadership and gain an appreciation for the work of members of each department of the White House. “My time interning at the White House was exhilarating and enlightening,” she said. “Walking through the White House and attending meetings with top East Wing staff members was eye opening.” On top of the leadership-building activities, she also had the opportunity to be in the Glamour Magazine Woman of the Year photo shoot with the first lady and six other East Wing interns (Monique is pictured second from left). 

Impressing a college-age student interested in politics with White House bells and whistles is not necessarily difficult, given the almost infinite access to world dignitaries and events these interns can be exposed to for a semester. One can only imagine the concept:  “No pay? Okay, but I can go to high-end DC galas, be in a Glamour Magazine, and listen to world leaders.”

Three years after her White House internship, Dorsainvil was hired to work at the White House full time, as the deputy director of advance and special events for the White House Office of Public Engagement and the Office of Intergovernmental Affairs.

Private sector businesses will have an awfully tough time competing with the White House’s internship program, if that is the work satisfaction standard DOL expects from businesses that want to recruit unpaid interns.

The White House is not the only place that has unpaid interns. While some federal departments offer paid internships, some of the same ones also offer unpaid internships. These include: the Department of Justice’s Civil Division, Department of Education, and Department of Agriculture. It should be noted, however, according to the Department of Education’s website, students should not get their hopes up for a paid position:

The attached material provides all prospective student volunteers/interns with the necessary information to apply for such a position. None of these positions are paid. If you are interested in a paid position, you must go through the agency’s personnel office, but there are very few if any of these jobs.

The Justice Department’s summer law program hires 100 to 120 paid legal interns compared to the 1,000 unpaid internships during the season. 

In the meantime, the lawsuits from former unpaid interns against private businesses are unlikely to stop. The lawyers behind the website, unpaidinternlawsuit.com, have discovered a potential legal goldmine to grab.