published by Indigo Productions

 

Attorney Peter Mavrick Explains Film and Video Industry Internships and the Law

Peter Mavrick, attorney for management and employers, was recently asked to render advice to a client in the film and video industry regarding its unpaid internships. A film and video business can teach valuable career lessons to novice career entrants. However, the structure of the unpaid internship opportunity matters from a legal perspective. As explained in further detail below, the most conservative approach is to link the internship to a bona fide school program for credit. Even in the absence of a school program, wages do not necessarily need to be paid to the intern. The main problem with internships, however, is that they expose the business to potential meritless claims where current or former interns contend they were exploited and deserve wages. In addition, the structure of the unpaid internship can fall within a gray area where the facts can lend themselves to different interpretations, with one possible interpretation supporting a valid claim for unpaid wages. In this article, attorney Peter Mavrick discusses, from a management attorney’s perspective, the law surrounding unpaid internships and federal wage law requirements.

The Fair Labor Standards Act (FLSA) requires that “employees” be paid a minimum wage and overtime wage for hours worked in excess of 40 hours per week. The FLSA’s definition of “employee” is quite broad and could include workers whom the employer classified as “volunteers” or “unpaid interns.” Whether an individual in an “employee” under the FLSA does not depend on labels, titles, or agreements between the employer and the individual. Consequently, employers sometimes are surprised to learn that an individual who agreed to work as an unpaid intern might have a viable claim for unpaid wages under the FLSA. Generally, courts will find that an unpaid intern is not an “employee” if the following six factors are satisfied: (1) the internship is similar to that which would be given in a vocational school; (2) the internship experience is for the benefit of the intern; (3) the intern does not displace regular employees, but works under close supervision; (4) the employer providing the training derives no immediate advantage from the intern’s activities and on occasion the employer’s operations may be impeded; (5) the intern is not necessarily entitled to a job at the conclusion of the internship; and (6) the employer and the intern understand that the intern is not entitled to wages for the time spent in the internship. No one factor is dispositive, nor are the factors applied mechanically. Instead, courts generally use those six factors to guide their analysis. Recently, a federal court in Florida applied the above six factors and held that certain student interns were not “employees” under the FLSA. In Schumann v. Collier Anesthesia, P.A., 2014 U.S. Dist. LEXIS 71152 (M.D. Fla. May 23, 2014), student registered nurse anesthetists (“student interns”) participated in an internship program supervised by an employer. The internship was a requirement for graduation, and the student interns understood they would not be paid. Nonetheless, 25 student interns sued the employer for unpaid wages for work performed during the internship.

Applying the six factors above, the court found that the first, second, fifth, and sixth factors suggested the student interns were not “employees.” The first factor favored the employer because the internship was similar to one that would be given in school and was related to the student interns’ course of study. The second factor—i.e., that the internship be for the benefit of the intern—also favored the employer because the student interns received academic credit for their work and the internship satisfied a precondition for graduation. Additionally, the student interns were not necessarily entitled to a job at the completion of the internship and knew they would not be paid. The fifth and sixth factors therefore favored the employer. Regarding the third factor—whether the intern displaced regular employees and worked under close supervision—the court found that the evidence did not favor either party. The student interns argued that the employer would have to hire additional employees if there were no student interns. However, the number of regular employees the employer hired remained constant throughout the years despite the fluctuating number of student interns. The evidence also suggested the student interns were supervised. However, the student interns performed some tasks without direct supervision, i.e., stocked carts and bins and completed pre-operative forms and evaluations.

Finally, the fourth factor—whether the employer derived immediate advantage from the interns’ activities and whether the employer is impeded by the internship—also favored neither party. The evidence suggested that the student interns provided some benefit to the employer. However, supervising the student interns took time away from regular employees’ work. With four factors favoring the employer and two factors favoring neither party, the court concluded that the student interns were not “employees” under the FLSA. Consequently, the student interns were not entitled to compensation for the work performed during the internship. As Schumann demonstrates, court do not apply the FLSA mechanically. Instead, courts look at the economic realities of the relationship to determine whether an intern is an “employee” under the FLSA.

The Schumann case also demonstrates that unpaid internships could result in litigation even when the interns are students who agree to participate in an unpaid internship and receive academic credit for such participation. Under the FLSA, employers generally are not entitled to reimbursement of attorney’s fees incurred in successfully defending a claim for unpaid wages. Therefore, as an attorney who advises employers how to avoid unnecessary litigation, Mr. Mavrick generally advises that employers pay their interns.

Peter T. Mavrick has successfully represented many employers in labor and employment matters. This article is not a substitute for legal advice tailored to a particular situation. Peter T. Mavrick can be reached at: 954-564-2246; Address: 1620 West Oakland Park Boulevard, Suite 300, Fort Lauderdale, Florida 33311; Email: peter@mavricklaw.com.

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