A federal appeals court, in a case that many in Hollywood were tracking, overturned a lower court’s decision on Thursday, making it a lot harder for interns to sue for unpaid or underpaid wages.
If interns get more out of the temporary job than their employer does, the employers do not have to pay them, Manhattan’s 2nd Circuit Court of Appeals ruled.
The case involved two former interns who worked on Fox Searchlight’s movie “Black Swan,” starring Natalie Portman and Mila Kunis, in 2010.
The interns worked 10-hour days in the studio’s offices and claimed they were treated as employees and should have been paid as such.
A lower court agreed — prompting interns to sue NBCUniversal, Viacom, Lionsgate and others for unpaid wages. The interns cited US Labor Department criteria for determining employee status.
Most studios settled; Fox didn’t. In the end, Fox carried the day.
“In sum, we agree with [Fox] that the proper question is whether the intern or the employer is the primary beneficiary of the relationship,” Judge John Walker Jr. wrote in the appellate court decision.
In its ruling, the court tossed the Labor Department’s six-point employee criteria.
Interns Eric Glatt and Alexander Footman worked on “Black Swan” and in Fox’s New York office up to 50 hours a week.
They sued the studio in 2011 and were later joined in the claim by another former Fox intern, Eden Antalik.
The interns performed grunt duties, such as copying and scanning documents, answering phones, taking out garbage, assembling briefs and making travel arrangements.
In a separate settlement, the court also accepted a judge’s ruling that Hearst Corp. was not required to pay its magazine interns.
The appeals court returned both cases to the trial court, along with a list of seven criteria that classify an internship as educational.
Fox hailed the decision on Thursday.
“We are very pleased with the court’s ruling, but the real winners are students,” a company representative said, adding that Fox has always been proud of its internship program.
The US Supreme Court has not distinguished between unpaid interns and paid employees under the Labor Department rules, but the court established in 1947 that railroad-brakemen trainees did not have to be paid, the appeals court noted.