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NY Media Intern Battle Headed for Interlocutory Appeal to 2nd Cir

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By William Peacock, Esq. on June 19, 2013 1:11 PM

Is this the most interesting employment law battle happening in the country today?

We certainly think so.

There are the unpaid Black Swan movie production interns suing Fox Searchlight. There are magazine interns suing over unpaid internships at Hearst and underpaid internships at Conde Nast. There is even a lawsuit against Atlantic Records and Warner Music, filed this week, according to Reuters.

With an economy stuffed with unemployed, desperate recent graduates, and companies reluctant to hire paid labor, we can only imagine that there will be even more to come.

Unfortunately, the law regarding unpaid internships is murky at best. There is a Department of Labor six-factor, none dispositive test, which we've reviewed ad nauseum. Tack on the confusion regarding class-action certification (thanks SCOTUS!) and it's no surprise that two courts in the Southern District of New York have come to conflicting rulings.

Earlier this month, Judge William Pauley ruled in summary judgment that the Black Swan interns were employees and declined to apply an arguably subjective "primary beneficiary" test, which asks who benefits from the arrangement more - worker or employer.

Judge Harold Bauer, meanwhile, applied a "totality of the circumstances" analysis, which included the primary beneficiary test, and ruled that the employee/intern line was too vague for summary judgment in the Hearst case. He also nixed class certification, shrinking the importance of this individual suit in the process.

Now, the plaintiff-interns in the Hearst case have asked Judge Bauer to certify the case for an interlocutory appeal to the Second Circuit. Interlocutory appeals, as well all know, are a bit unusual.

You know what else is unusual? The victorious defendant, which now faces individual claims rather than a massive class-action, agreeing with the request.

"Hearst submits that an in-district split with respect to the legal standard in two cases proceeding concurrently justifies immediate review by the Second Circuit," the company wrote in a motion obtained by Reuters.

It's an interesting move, considering that Hearst could probably dismiss the remaining claims with quick settlements or a small trial. Instead, they're agreeing to extend litigation because they want clarity on the law of unpaid internships.

Good. We couldn't agree more.

If the Second Circuit does grant the appeal, and clarifies things a bit, it should also help to expedite the resolution of the Conde Nast and Atlantic Records lawsuits as well. If entry-level workers are truly lucky, it might even reduce the temptation to exploit unpaid interns and provide guidance to employers about what types of arrangements are actually legal.

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