Los Angeles partner Mark Terman was quoted in a Daily Journal article titled, “Appellate opinion on Fox interns’ suit could prohibit future similar class actions.”
The article discussed the 2nd U.S. Circuit Court of Appeals’ reversal of a 2013 ruling that granted partial summary judgment to plaintiffs Eric Glatt and Alexander Footman, who were hired by Fox as unpaid production interns and argued they should have been paid at least minimum wage because they were essentially regular employees. The decision cast aside – at least in the 2nd Circuit - rigid tests used by the U.S. Department of Labor (and may state as well) for classifying workers as interns (who can be unpaid) or employees (who must be paid) in favor of a weighing and balancing of many factors to determine whether the substantial benefit of the relationship is education to the worker or labor to the employer. The court also set aside class certification in the case.
Mark commented on the shrinkage of opportunities for young people in the production industry. “So many companies, including entertainment companies, have drastically scaled back or even eliminated their internship programs for fear that they’ll be tied up in litigation for years,” he said.
Mark also said that companies are going to be cautious in the wake of the decision. “The practical answer is to wait and see what the outcome of this and other cases are before ramping up internship programs again,” he said.