work in progress.bmpCo-authored by Rob Whitman and Adam Smiley

In February, this Blog reported on a pair of recent Southern District of New York lawsuits by former unpaid interns for The Hearst Corporation and Fox Searchlight Pictures claiming that they should have been paid for work performed for about 20 magazines and on production of the 2010 film “Black Swan,” respectively.  The plaintiffs in both cases have made strides over the past few months toward certification of their claims.  

In the Fox Searchlight case, the plaintiffs requested the names and contact information of all prospective class members during discovery.  Fox delivered the goods — but redacted the former interns’ last names, e-mail addresses, and phone numbers, and also refused to turn over budgeting information for the production. On June 11, Southern District of New York Judge William H. Pauley, III ordered Fox to provide the unredacted information and the production budgets, concluding that the plaintiffs’ need for the information outweighed the interns’ privacy interests. He also ruled that the budget information could reasonably lead to the discovery of admissible evidence, particularly evidence that financial concerns could have led the company to use unpaid interns in violation of FLSA and state wage laws.    

Back in April, Hearst filed a motion to strike the class allegations made in the plaintiffs’ complaint, arguing that it would be impossible for the court to compare the educational benefit each intern derived to the benefit obtained by the company — particularly since experiences varied widely among the different magazines that Hearst publishes.  The plaintiff responded that all interns are similarly situated, and on June 7 formally requested that the court conditionally certify a class and order Hearst to produce the names and contact information of all prospective class members.  

On July 12, 2012, Judge Harold Baer, Jr. granted conditional certification under the FLSA for the Hearst plaintiff. Judge Baer based his ruling on evidence that Hearst “made a uniform determination that interns were not employees…required all interns to submit college credit letters…and used interns to perform entry-level work with little supervision.” Judge Baer also denied Hearst’s motion to strike the class allegations under the New York Labor Law, concluding that since minimal discovery has occurred, Hearst’s argument is premature.

These cases demonstrate that plaintiffs in unpaid-intern cases – a relatively new breed of wage-hour litigation – are seeking conditional/class certification like plaintiffs in other wage-hour cases.  And because the interns were unpaid, the measure of potential damages (minimum wage, overtime payments, statutory penalties, etc.) could be enormous.  Employers that use interns or volunteers should proactively examine their internship programs to help avoid not just a single-plaintiff lawsuit down the road, but likely a large class-action suit filed on behalf of every intern over a span of years. (See our previous post for a discussion of the test used to determine whether the practice of using unpaid interns is permissible.)