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NBCUniversal OKs $6.4M Settlement With Unpaid Interns

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By Daniel Taylor, Esq. on October 23, 2014 4:15 PM

NBCUniversal has agreed to settle claims brought by former interns who claimed they were required to work without pay on shows such as "Saturday Night Live" in violation of labor laws.

If approved, the $6.4 million settlement will pay the lead plaintiff, former "Saturday Night Live" intern Monet Eliastam, $10,000, according to The Hollywood Reporter. Thousands of other former NBC interns covered by the settlement will be paid an estimated $505 if they decide to opt for the settlement instead of pursuing their own claims against the company.

What led up to the settlement?

Class Action Lawsuit

A group of former interns, including Eliastam and interns from NBC's cable news channel MSNBC, filed a class action lawsuit in 2013 alleging that unpaid interns were being used in placed of normal workers, a violation of both state and federal labor laws. The suit also claimed that NBC failed to provide any sort of academic or vocational training to interns, one of the requirements for unpaid internships under federal labor law.

The filing followed a ruling by a federal court judge that Fox Searchlight pictures violated labor laws by not paying interns who had worked on the film "Black Swan." Online publisher Gawker Media was also hit with labor law claims by three interns who claimed they worked at least 15 hours a week moderating forums for the company without being paid for their work.

Unpaid Intern Laws

As shown in these cases, treating unpaid interns like a source of free labor may end up costing employers in court. Under the federal Fair Labor Standards Act, an unpaid internship must meet certain criteria, including that:

  • It must be similar to training which would be given in an educational environment,
  • It must be for the benefit of the intern,
  • The intern must not displace regular employees, and
  • The employer should derive no immediate advantage from the intern's activities.

If those requirements are not met, the FLSA's provisions regarding minimum wage and overtime may apply to the intern. According to The Hollywood Reporter, similar unpaid internship cases are currently pending against companies such as Fox, Sony, Warner, and Viacom.

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