Authored by Adam J. Smiley

Nothing beats the drama of Game 7.  The New York Rangers provided plenty of it last night in downing the Pittsburgh Penguins to advance to the conference finals.  Off the ice, a group of interns for Madison Square Garden — home of the Rangers — who sued MSG for FLSA and NYLL violations have learned that, like the Penguins, they won’t be advancing.

Back in March, the interns asked the Southern District of New York to conditionally certify a collective action made up of unpaid interns.  Last week, Judge Furman denied this request because the interns were not the victim of a common unlawful policy.  His order highlights the problematic aspects of unpaid intern programs, and offers a glimpse into the standard that should ultimately govern such programs.

Whether MSG was legally obligated to pay interns turned on “whether the interns were properly considered ‘employees’ under the FLSA or whether they fall under the ‘trainee’ exception.”  Realizing that the Second Circuit Court of Appeals would soon weigh in on the proper standard to evaluate this issue, Judge Furman concluded that the Department of Labor’s six criteria regarding internships “are at least relevant to, and perhaps dispositive of, the inquiry.”

The plaintiffs did not meet their low burden because they worked in 150 different departments and “their experiences appear to vary greatly from one department to the next.”  For example, the Court compared the named plaintiff, a New York Rangers intern who prepared uniforms, tracked inventory, and set up the locker room (without supervision from his supervisor), to an architectural intern in the Future Venue department.  Similar differences existed among all MSG interns in terms of their activities, levels of supervision, burdens imposed on MSG, and the manner in which they were selected for their internships.  These factors prevented the finding of a common and unlawful internship policy.

On the other end of the rink, a group of Time Warner interns were granted conditional certification just yesterday, also in the Southern District of New York.  In that case, Judge Gardephe applied the DOL factors and found that the interns performed the same type of work as paid employees, and that their program was part of a common, nationwide policy because the interns all applied via a standardized application which flowed through a common website, and because identical intern job descriptions existed, regardless of location.  On these facts, the Court distinguished the Time Warner interns from the MSG interns.

As the summer internship season approaches, employers can take several steps to avoid running afoul of the law:

  • Make sure that your program is an educational experience that benefits the intern;
  • Make sure that interns are not simply replacing employees;
  • Make sure to properly train and educate those supervisors who oversee interns.

Also – stay tuned to our blog as the Second Circuit will hear arguments on unpaid internship standards this summer, which should clarify that exact requirements of a proper program for employers within the Second Circuit and beyond.