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Second Circuit to Hear Unpaid Interns' Wage and Hour Class Action

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The Second Circuit is set to decide later this month whether unpaid interns are are employees under wage and labor laws.

The interns filed suit in the Southern District of New York against Fox Searchlight Pictures and the magazine publisher, The Hearst Corporation, for failure to pay wages for hours worked.

The interns also charged the employers with record-keeping violations and failure to pay overtime wages under federal and state law.

The Hearst Corporation is a leading media and information company with successful divisions including broadcasting, magazine, and entertainment. A few U.S. titles published by the Hearst magazine division include Esquire, Good Housekeeping, and The Oprah Magazine “O.”

Fox Searchlight Pictures established in 1994, is a subsidiary of Twentieth Century Fox Film Corporation. Fox Searchlight focuses on the United States distribution of independent and British films. Titles distributed by the company are award-nominated films Black Swan, Slumdog Millionaire, and The Grand Budapest Hotel.

Former Head of Accessories Intern, Xuedan Wang, originally filed suit against Hearst in February 2012. Wang was employed with the publisher from August through December 2011. Wang’s suit followed the similar action filed in September 2011 by Eric Glatt and Alexander Footman, interns employed by Fox Searchlight Pictures.

All Work, No Wages

According to Glatt and Footman’s original class action complaint, Fox is a successful player in the independent film industry because of its tight control over budgets on its small-scale productions.

Eric Glatt was hired for the filming and post-production of Black Swan from December 2009 through August 2010 in the accounting department.

Glatt worked 40 to 50 hours a week without receiving wages. During his nine-month internship, he received one paycheck for twelve hours of work January 2010. He received no payment for the remainder of his internship.

Alexander Footman, co-plaintiff in the suit against Fox, was employed from October 2009 through February 2010.  Supervised by the Production Office, Footman worked alongside Glatt and other Fox interns.

The Fox interns responsibilities included reviewing personnel files for staff and crew-members, reconciling purchase orders, running miscellaneous errands and distributing lunch orders.

The complaint also states interns were responsible for purchasing laptop computers and mobile devices to perform work for the company. These purchases were not reimbursed.

Harper’s Bazaar staff and editors supervised Wang as the Head Accessories Intern, within the Hearst magazine division.

During her four month employment, Wang's responsibilities included managing corporate expense reports and coordinating pickups and deliveries.

Wage and Labor Laws

FLSA establishes minimum wages, overtime pay, and recordkeeping standards for employees in the private sector, federal, state, and local government. For the Fair Labor Standards Act to apply there must be an employee-employer relationship.

Both complaints allege unpaid interns are the modern day equivalent to entry-level employees.

An unpaid internship is lawful only if the intern is employed as part of an educational training program, and the benefits are primarily for the participant’s educational opportunity.

The original complaints in both cases state if the work an intern performs eliminates the need to hire more employees or use existing staff, then it is less likely the employer is not receiving a benefit.

Each employer is required to keep a record of hours worked for each employee, basic contact information, and rate wages paid each pay period. Employers are required to retain the information for three years.

Evading obligations

Justin Swartz, with Outten & Golden LLP, the firm representing the plaintiffs stated, "Employers have been increasingly trying to evade their obligations under the Fair Labor Standards."

Although each state may have separate minimum wage laws, each must comply with the federal standard.

The expectation for the intern litigation is interns and employers will receive a clearer picture of employers' wage-and-hour obligations.

The cases will be heard on January30, 2015.

The cases are Eric Glatt, et. al v. Fox Searchlight Pictures, Inc. Case No. 11-CV-06784 and Xuedan Wang, et. al. v. The Hearst Corporation Case, No. 12-CV-0793, both in the U.S. District Court of the Southern District of New York.

Representatives for the plaintiffs’ are Adam Klein, Rachel M. Bein, and Justin Swartz of Outten & Golden LLP, New York.

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