Is It Finally a Good Time to Be an Intern? Rulings Shake Up Legal Landscape

Illegal unpaid internships have been operating under a “don’t ask, don’t tell” policy for too long in the United States, with more and more businesses continuing to misclassify workers as “unpaid interns” to avoid paying them wages. Many interns are now accepting positions that require them to carry out employee-level tasks without pay – so much that this has become the norm for recent grads and those looking to get their foot in the door. After all, bosses could fall back on the laziest of defenses and point out, whenever challenged by their “interns,” that this is simply the way things work. Welcome to the world of business – good luck getting paid.

Casey Ojeda claimed the Fair Labor Standards Act (FLSA) protected workers from being underpaid.

Then came a landmark ruling by a judge in 2013. A former intern at MTV was seeking approval of a nationwide class of former interns (legal permission to file a suit on behalf of others who suffered in the same way). Casey Ojeda claimed the Fair Labor Standards Act (FLSA) protected workers from being underpaid, and that while the Department of Labor allowed unpaid internship positions, it also has strict requirements for companies that choose to fill these positions. MTV, he claimed, was hiring unpaid interns, but expecting them to carry out roles and tasks that would normally be performed by employees. This misclassification – calling someone an intern rather than an employee – meant that MTV wasn’t paying the minimum wage, or complying with other FLSA requirements. Ojeda sued the company for the money he claimed he was owed and, for the first time, the judge agreed that the case could continue. Unpaid interns began to think they might have other options. More lawsuits followed, and – almost imperceptively – the landscape of the working world shifted in employees’ favor.

Two recent decisions are adding to the raft of good news for unpaid interns across the country. A class action lawsuit against Conde Nest alleging wage-and-hour violations may be settling soon, while Viacom Inc. / MTV interns have finally been granted class action status in New York.

A filing in New York federal court last week suggests that Conde Nest Publications has been “in the process of drafting a settlement agreement,” while the CEO of Advance Magazine Publishers Inc. (Conde Nest’s parent company) published a memo that described settling as the best business decision. If this is the case, then it’s a step in the right direction.

Plaintiff Lauren Ballinger sued the company in 2013 over the company’s policy of paying $12 a day regardless of how long she worked – a flagrant violation of FLSA requirements. Ballinger, as a named plaintiff in the suit, also claims that she carried out employee-level tasks that benefitted the company without receiving any training or benefits. The suit also alleges violations of New York state labor laws.

The MTV interns lawsuit, meanwhile, took a leap forward last week after U.S. District Judge Jesse Furman granted collective action certification – something plaintiffs, led by Ojeda, have sought since the lawsuit was first filed. In his ruling, Furman agreed that the plaintiffs had managed to prove they had suffered because of a common policy to hire unpaid interns instead of paid employees. Although the judge reserved judgment on the nature of the notice that would be sent to opt-in plaintiffs, he did agree – crucially – that the certified class should cover unpaid interns working for Viacom Inc., MTV Networks Music Production Inc., and MTV Networks Enterprises Inc. for the past three years. He also found that claims could also be brought under California law. The only downside to the ruling was Judge Furman’s denial of plaintiff’s attempts to amend the case to demand a jury trial.

So, generally good news for unpaid interns – which might mean bad news for the companies that hired them, but it’s hard to shed a tear over that. If they didn’t want to face these lawsuits, they should have paid their workers to begin with (or offered legitimate unpaid internship positions). There’s more than a hint of irony in the fact that businesses’ attempts to save money by underpaying workers may end up costing them far more.