The Future of Unpaid Internships in the Entertainment Industry
“Dentyne…not Dentyne Ice,” one of the assistants says to me as I stroll in with bags full of Dentyne Ice gum. “I’m so sorry,” I apologize, out of breath. “Will Dentyne Ice not work?” Dentyne Ice was not going to work and I spent my Friday afternoon, in Los Angeles traffic, searching for regular Dentyne Gum. Stores apparently prefer to stock Dentyne Ice instead of the older and more generic Dentyne. My unpaid internship experience was not an anomaly in Hollywood. In fact, most young people on the entertainment industry career path can relate.
Unpaid internships in the entertainment industry, like mine described above, are considered an essential rite of passage in the industry. The internships offer interns invaluable networking opportunities and exposure to an industry they might otherwise not have access to. However, some of these interns have recently asserted loss of wage claims, after interning with entertainment companies that require interns to work like an employee, instead of like an intern. These suits demonstrate how the tides are changing, and how the classic entertainment internship might one day be found unlawful.
“Under the Fair Labor Standards Act (“FLSA”), non-exempt employees are required to be paid minimum wage for all hours worked and overtime.” Therefore, an entertainment company’s liability to interns under the FLSA will depend on whether the unpaid interns fall within the definition of “employees” prescribed by the FLSA and California’s labor requirements. The Department of Labor (“DOL”) has developed a test for assessing what makes an “intern” an “employee.” Under this test, interns of for-profit employers are entitled to pay unless each of the following six criteria are met:
- The internship, even though it includes actual operation of the employer’s facilities, is similar to the training, which would be given in a vocational school.
- The internship experience is for the benefit of the intern;
- The intern does not displace regular employees, but works under their close observation;
- The employer derives no immediate advantage from the activities of the intern, and, on occasion, the employer’s operations may actually be impeded;
- The intern is not necessarily entitled a job at the conclusion of the internship; and
- The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
However, two recent cases, Glatt v. Fox Searchlight Pictures and Wang v. Hearst Corp., appear to apply different analyses to the DOL test. The Glatt court applied the test, ensuring every criteria was met,while the Wang court applied a more totality of the circumstances analysis, where a strength in one element made up for a lack in another.
Glatt v. Fox Searchlight Pictures
In Glatt v. Fox Searchlight Pictures, the court decided that each factor of the DOL test had to be met in order for the unpaid interns to recover lost wages. There, the plaintiffs worked as production interns on the set of the Fox Searchlight 2010 blockbuster Black Swan. The interns brought suit for their lost wages, claiming that because they had performed tasks for the companies typically done by employees, they were entitled to wages. The plaintiffs alleged that they had performed a variety of tasks for the company such as assembling office furniture, arranging travel plans, taking out trash, taking lunch orders, answering phones, watermarking scripts, and making deliveries. The plaintiffs claimed that by not giving the interns wages, Fox Entertainment Group was in violation of the FLSA and the related New York Labor Law that mandated employees to at least be paid the federal minimum wage. In order to determine the validity of the plaintiff’s claim, the court had to decide whether the plaintiff’s were improperly classified as interns. The court used the United States Department of Labor (“DOL”) six-factor test.
The court ultimately decided that because of the tasks the plaintiffs had performed, they had been improperly classified as interns and were entitled to wages. In Glatt the interns were entitled to wages because:
- The workers did not receive any formal training or education during the internship;
- There was no internship experience structured to benefit them. Although the two production workers received some benefits, such as resume listings, job references, and an understanding of how a production company works, these benefits were the same as any other employee would obtain and were not the result of an internship intentionally structured for their benefit.
- The workers performed “basic” routine tasks that would have performed by regular employees, such as filing, taking lunch orders, removing garbage and running errands;
- Searchlight received an immediate advantage from the intern’s work: Menial as it was, their work was essential,” and Searchlight would have had to pay others to do it;
- The interns did not appear to be entitled to a job at the end of the internship;
- Although the interns understood they would not be paid, the court noted that this factor was basically irrelevant since employees are not allowed to waive their entitlement to wages under the law.
In using the DOL test, the court rejected the Defendant’s argument for application of the “primary beneficiary test” where an intern does not need to be paid if the “internship benefits to the intern outweigh the benefits to the engaging entity.” The court decided that the “primary beneficiary test” was “subjective and too unpredictable.”
Wang v. Hearst Corp.
However, in Wang v. Hearst Corp., a May 2013 case,a New York court used the DOL test in a totality of the circumstances analysis. There, a former intern for the fashion magazine Harper’s Bazaar claimed that the publisher failed to pay minimum and overtime to interns working up to 55 hours per week. Some of the internship duties included doing online research, cataloguing samples, maintaining the accessories closet, and doing story- boards. The plaintiffs first asked that the court adopt an “immediate advantage” standard to determine whether the interns were in fact employees, or in the alternative that the defendants meet all six criteria of the “DOL” test. Because there was a dispute as to the level of education, benefits, and supervision received by the interns, as well as the existence of any impediment to the defendant’s regular operations, the court denied the plaintiff’s motion for partial summary judgment on the plaintiff’s status as employees. Relying on Tony & Susan Alamo Found. v. Sec’y of Labor, 471 U.S. 290, 295 (1985), the court decided that there was no “one-dimensional test” but a totality of the circumstances test. The totality of the circumstances assessment seems to give entertainment companies a lot of leeway in creating unpaid internships.
Whether the test is subject to a meet-all-factors analysis or a totality of the circumstances analysis will affect how “educational” and “immersive” the internship needs to be in order for it to be unpaid. The Second Circuit has accepted appeals of both the Fox and Hearst cases. These decisions will likely provide some guidance as to the future application of the DOL test.
What Rights Do Interns Have?
Unpaid internship lawsuits are on the rise, and many are class action suits against large production companies. “No one is complaining about doing the work-they think it is going to catapult their career,” Jeffrey Brown, the lawyer representing an intern in a suit against Sean “Diddy” Combs’ record label,recites. Brown states, “You have the right to make a claim for unpaid wages even if you agreed to be classified as an unpaid intern or trainee.” Student interns receiving credit often inadvertently lose out on wages because of the “widely held belief that interns who receive college or school credit cannot or need not be paid.” Apparently this is not the case under federal law or California law. Students may have a right to be compensated for their internships even though they may already be receiving academic credit.
Under the U.S. Department of Labor Wage and Hour Division, unpaid internship are only acceptable if the internship is an extremely educational and immersive experience. But is that standard even workable? The reality is that, given the fast paced nature of the industry, most entertainment executives do not have time to train young people. So, will these recent decisions dis-incentivize employers and translate into less internship opportunities?
One possibility is that if companies are required to pay interns at least minimum wage, attaining an internship in the entertainment industry will become more competitive. Additionally, a change might allow for more talented hiring.
It is clear that internships are not educational and immersive experiences when the intern is running errands or delivering mail. Therefore, companies will have to work harder to come up with immersive work for the intern. For example, “a digital marketing intern at a film company should be provided with projects like researching and creating social content, recording and monitoring digital performance via online tools, tracking marketing trends, evaluating audience feedback and working alongside their internship manager to implement advertising and marketing strategies.”
Moreover, it is already hard enough to get your foot in the door. When production companies or talent agencies only provide unpaid internships, the companies narrow the door to the industry even more drastically. It has been assessed that 65% of students rely on financial assistance from their parents during these internships. This means that students who went to college solely on loans or whose parents cannot help them, are almost without a chance in the entertainment industry.
Until the Fox and Hearst appeals are decided, judges are free to choose how strictly to apply the DOL test. Until then, entertainment companies might begin paying at least minimum wage more often, in order to avoid lawsuits. Unless the company can truly spend time educating interns, justice probably requires interns be paid at least minimum wage.
Glatt v. Fox Searchlight Pictures Inc., 293 F.R.D. 516, 532 (S.D.N.Y. 2013).
 Glatt v. Fox Searchlight Pictures Inc., 293 F.R.D. 516, 522 (S.D.N.Y. 2013).
 Glatt v. Fox Searchlight Pictures Inc., 293 F.R.D. 516, 532 (S.D.N.Y. 2013).
 Glatt v. Fox Searchlight Pictures Inc., 293 F.R.D. 516, 532 (S.D.N.Y. 2013).
 Id. at 533.
 Glatt v. Fox Searchlight Pictures Inc., 293 F.R.D. 516, 532-534 (S.D.N.Y. 2013).
 Glatt v. Fox Searchlight Pictures Inc., 293 F.R.D. 516, 531-532 (S.D.N.Y. 2013).
 Wang v. Hearst Corp., No. 12 Civ. 793, 2013 WL 1903787 (S.D.N.Y., May 8, 2013).
 See Glatt v. Fox Searchlight Pictures, No. 11 Civ. 6784 (WHP), 2013 WL 2495140 (S.D.N.Y. June 11, 2013). See Wang v. Hearst Corp., No. 12 Civ. 793, 2013 WL 105784 (S.D.N.Y. Jan. 9, 2013).
 Daniel Beekman, “Disgruntled intern sues Sean (Diddy) Comb’s Bad Boy company for back pay, claiming she was overworked.” Daily News.
John R. Carrigan, Jr. “Overworked, Underpaid, Illegal? Hollywood Interns Fight Back. The Hollywood Reporter, Esq.
 Ashley Mosley, “Why the Entertainment Industry Should Pay Its Interns.” Huffington Post.