In a ruling that is likely to be well read throughout Hollywood and maybe corporate America at large, a federal judge on Tuesday has handed a couple of the interns suing Fox Searchlight a victory on summary judgment and also certified a class action over the internship programs of Fox Entertainment Group.
The lawsuit was first brought in late 2011 by two interns -- Alex Footman and Eric Glatt -- who both worked on Fox Searchlight's Black Swan and claimed that the company's unpaid internship program violated minimum wage and overtime laws.
The lawsuit then got bigger with amended claims brought by added named plainitffs such as Kanene Gratts, who worked on Searchlight's 500 Days of Summer as well as Eden Antalik, who participated in the FEG internship program. To prevail, they would need to jump several hurdles, including showing that the training programs set up weren't for the advantage of the trainees.
On Tuesday, federal judge William Pauley issued a ruling that is very favorable to the suing interns.
Regarding Footman and Glatt, the judge grants summary judgment to them that Searchlight was their "employer," as that term is defined in the Fair Standards Labor Act and New York Labor Laws.
Fox attempted to convince Judge Pauley that the production companies -- like Lake of Tiers Inc. instead of Searchlight -- were responsible for hiring and controlling the interns, but the judge didn't buy it. Judge Pauley writes that "Searchlight's power to fire Black Swan production staff was unbridled," that "Searchlight closely supervised work on Black Swan," that "the crew of Black Swan was tied to Searchlight, not Lake of Tears," and so forth.
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After going through the experiences of Footman and Glatt on Black Swan, here's what Judge Pauley concludes:
"Considering the totality of the circumstances, Glatt and Footman were classified improperly as unpaid interns and are 'employees' covered by the FLSA and NYLL. They worked as paid employees work, providing an immediate advantage to their employer and perfomed low-level tasks not requiring specialized training. The benefits they may have received -- such as the knowledge of how a production or accounting office functions or references for future jobs -- are the results of simply having worked as any other employee works, not of internships designed to be uniquely educational to the interns and of little utility to the employer. They received nothing approximating the education they would receive in an academic setting or vocational school. This is a far cry from [the Supreme Court's decision in] Walling, where trainees impeded the regular business of the employer, worked only in their own interest and provided no advantage to the employer. Glatt and Footman do not fall within the narrow 'trainee' exception to the FLSA's broad coverage."
Gratts, who completed a similar internship on 500 Days of Summer, was not as lucky. The judge grants the defendant's motion that her claims are time-barred.
But Judge Pauley's decision doesn't end there.
The federal judge in New York has certified a class action that will explore internships throughout the corporate departments at Fox Entertainment Group. Unlike a fellow judge who recently refused to certify a class action for some 3,000 fashion magazine interns working at Hearst, this judge sees commonality and the other factors that are required to move forward such a class action.
Specifically, the judge rules "Antalik has identified several common questions relevant to determining NYLL violations, including: (1) whether Defendants derived an immediate advantage from interns' work, (2) whether interns displaced regular employees, and (3) whether FEG's internship program was for the benefit of interns."
The judge adds, "Here, the relatively small recoveries available to individual plaintiffs make a class action a more efficient mechanism."
The interns were represented by the law firm of Outten & Golden, who have now been appointed as class counsel.
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