• Glatt v. Fox Searchlight Pictures, Inc.
  • August 29, 2013
  • Law Firm: Troutman Sanders LLP - Atlanta Office
  • In the last edition of Overtime Update (available here: http://www.troutmansanders.com/overtime-update-what-the-supreme-courts-genesis-healthcare-ruling-means-for-you-and-assessing-whether-an-unpaid-summer-internship-is-legal-06-10-2013/), we reported that several employers have recently been sued for wages owed by their former unpaid interns. In June 2013, a federal judge handed down a noteworthy ruling in the case of production interns Eric Glatt and Alexander Footman, who sued Fox Searchlight Pictures, Inc., a division of Twentieth Century Fox, for alleged unpaid wages owed to them and others for production work performed on the set of the film "Black Swan." In case you missed it, here’s the back story:

    Glatt and Footman sued Fox Searchlight, in September 2011 in a federal court in New York alleging that they did basic tasks (e.g., preparing coffee and expense reports) and that, through the use of a tightly-controlled budget, the film was produced for approximately $13 million and grossed more than $300 million. The lawsuit alleged that Fox Searchlight violated the minimum wage and overtime provisions of the FLSA and state law. On June 11, 2013, Judge William H. Pauley III ruled that the plaintiffs were "employees," not "trainees" or "interns," and should have been paid. Judge Pauley discussed the six factors cited by the U.S. Department of Labor for evaluating whether an employee is properly classified as an unpaid intern (see our last edition of Overtime Update, linked above). In discussing one of those factors (whether the internship was for the benefit of the interns), the court reached this important conclusion:

    Undoubtedly, Glatt and Footman received some benefits from their internships, such as resume listings, job references, and an understanding of how a production office works. But those benefits were incidental to working in the office like any other employee and were not the result of internships intentionally structured to benefit them. Resume listings and job references result from any work relationship, paid or unpaid, and are not the academic or vocational training benefits envisioned by this factor.

    The court also noted that other factors favored the finding of an employment relationship, including that Fox Searchlight did not contest having derived an immediate advantage from Glatt and Footman’s work. While an appellate court may view the case differently, the case is nonetheless a reminder that unpaid internships, particularly with for-profit employers, present legal risks.