Approximately five years after interns filed a lawsuit against Hearst Corporation, the Second Circuit Court of Appeals has ruled that the company did not systematically exploit interns by having them perform entry-level work without pay. The interns claimed that Hearst Corp. violated federal and state law when it declined to pay thousands of interns.
Internship vs Entry-Level
The lead plaintiff, Xuedan Wang, alleged that 3,000 interns at Hearst’s numerous publications, including Elle, Marie Claire, Cosmopolitan, and Seventeen magazines, were exploited in violation of the Fair Labor Standards Act (FLSA) and New York state laws. The FLSA and state laws set forth specific requirements for internships, which distinguish them from entry-level jobs. To be exempt from the minimum wage requirements, employers must ensure that internships benefit the interns, among other things.
According to Second Circuit Judge Dennis Jacobs, the question before the Court was whether Hearst Corp. offers bona fide for-credit internships, or whether it relied on student labor to avoid compensating entry-level employees. The key case that speaks to the legal standard is Glatt v. Fox Searchlight Pictures Inc. In this case, the Court considered whether the intern or their employer was the primary beneficiary of the relationship. If the employer is the primary beneficiary, it cannot be deemed an internship, and is subject to the minimum wage requirements set forth under the Fair Labor Standards Act.
In the Hearst Corp. case, Judge Jacobs found that Hearst made it clear to the interns that they would not be paid, and that the internships provided training similar to those provided in an educational environment. The students were also told that the internships were tied to a formal education program.
Distinguishing the Difference
The plaintiffs argued that internships should not include menial and repetitive tasks, with little supervision or guidance. These, according to the plaintiffs, were tasks more likened to employment than an educational internship. However, the Judge found that many useful internships are designed to correct the impression that work is just as rewarding and fulfilling as school. Repeating administrative and organizational tasks, she ruled, can provide useful skills such as how to be more organized and focused in a professional setting. Plaintiffs can still appeal this ongoing ruling to the United States Supreme Court.
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