WASHINGTON Employers have considerable leeway to use unpaid interns legally when the work serves an educational purpose, a federal appeals court ruled on Thursday, setting aside a lower court decision that the movie studio Fox Searchlight Pictures had improperly classified former workers as unpaid interns rather than employees.
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Two of the plaintiffs, Eric Glatt and Alexander Footman, had done work as unpaid interns connected to the movie Black Swan between 2009 and 2010, where their duties included copying documents, maintaining takeout menus, assembling furniture, taking out trash and, in one case, procuring a nonallergenic pillow for the movies director, Darren Aronofsky.
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In 2013, Judge William H. Pauley III of Federal District Court ruled that Mr. Glatt and Mr. Footman should have been classified as employees, citing a set of six criteria put forth by the Labor Department in 2010.
The departments criteria indicate that, in order to qualify as an unpaid internship, the work must, among other things, be similar to training offered in a school setting, be performed for the benefit of the intern rather than the employer and not nudge aside that of existing employees.
Writing for a three-judge panel of the United States Court of Appeals for the Second Circuit, Judge John M. Walker Jr. held that the Labor Departments criteria were both out of date and not binding on federal courts.
He argued that the proper way to determine workers status was to apply a primary beneficiary test a concept proposed by Fox in which the worker can be considered an employee only if the employer benefits more from the relationship than the intern.
Judge Walker wrote that he and his fellow judges on the panel agree with defendants that the proper question is whether the intern or the employer is the primary beneficiary of the relationship.
He further argued that the test should hinge largely on the internships educational benefits: for example, whether the internship was tied to the interns formal schooling and whether it occurred in an educational setting.
We are very pleased with the courts ruling, but the real winners are students, said a Fox spokesman in a statement. Fox has always been very proud of its internship programs and continues to believe they offer tremendous benefits to those who participate in them.
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As a practical matter, Mr. Glatt and Mr. Footman are still likely to prevail in their case since neither was enrolled in an educational institution at the time of their internship. But the opinion raises the bar much higher for future interns who may seek to bring claims against their employers.
Instead of using the clear standards of the Department of Labor, it leaves it on a case-by-case basis, said Mr. Glatt, who has just completed law school. Every intern who thinks something is questionable has to litigate it. Its a terrible, terrible burden. Why burden the most vulnerable possible employee with all the heavy work?
