How to Avoid a Future Unpaid Interns Lawsuit

By: TFL

Screen-shot-2013-11-12-at-9.35.40-PM-560x295Given the increasing number of unpaid internship lawsuits over the past several months, the latest being the one filed this past week against Burberry, here is an article we posted last year.  Social change is generally brought about through the courts: Brown v. Board of EducationRoe v. Wade andUnited States v. Windsor spring immediately to mind. Plaintiffs’ attorneys are primarily the engineers of that change. Most unpaid intern lawyers want to induce social change by ending illegal unpaid internships, but not all unpaid internships. We are against worker exploitation but we are not against career advancement. Right now, it looks as if the only way to end illegal unpaid internships may be to end unpaid internships altogether. But if it is possible to throw out the bathwater instead of the baby and the bathwater, such an option is definitely worth pursuing.

The year the dot-com bubble burst is the year that unpaid internships changed. There is no shortage of intern success stories on the Web and elsewhere: inspiring tales of “pulling yourself up by your bootstraps” and “paying your dues.” There is little doubt that these anecdotes are true, although the stories have probably been remembered with advantages. Most of these stories have one thing in common: the events transpired before 2000.

Before 2000, companies could afford to bring on an intern who did little actual work. But then the dot-com bust, and 9/11 shortly thereafter, plunged the economy into recession. The economy soon recovered, thanks in large part to the burgeoning housing bubble and war-driven government spending, but economic infrastructure did not change. Companies figured out that they could trim labor costs by calling a cat a dog – classifying an “entry-level employee” as an “intern” – and then pocketing the workers’ paychecks.

So, that is the system that is currently in place. What was once a foot-in-the-door is now a kick in the you-know-what.

A legal internship: There should be a place for young workers and career-changers to develop new job skills, and the Department of Labor sets out rules for just such an arrangement. For those companies that want to keep their interns but avoid lawsuits, stick to the rules:

  • Educational environment: Make sure the interns learn something about the fashion industry. Have weekly meetings with interns, and give them a chance to ask questions about that week’s work. The meetings need not be long or formal: a quarter-hour in the break room would probably suffice.
  • Benefit of the intern: Leave a paper-trail of memos or emails asking the interns how the program can be better suited to fit their needs. You do not have to implement all suggestions, or even most of them, but you do need to make some effort to put the intern before the bottom line.
  • Displacement and supervision: The intern cannot displace regular employees and must be closely supervised by a regular employee. Ensure that the intern is not doing the exact same work that paid employees are performing, and that the intern has an assigned and engaged mentor.
  • The employer derives no immediate benefit: By definition, the intern is on premises to learn and not to work; the rule goes on to say that the employer’s operations may actually be impeded by an unpaid intern.
  • Understanding of wages and future employment: The exact rules are “The intern is not necessarily entitled to 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.” Use this exact language, put these provisions in boldface and have the intern initial them.

Maurice Pianko, Esq. is the founder of Intern Justice, a website that provides information and legal advice about unpaid internships. Maurice is a New York attorney, who has successfully settled 3 unpaid intern cases, and is currently co-lead counsel on 6 pending unpaid intern/worker class action lawsuits against defendants that include:  Atlantic Records and Nerve.com. Maurice is a legal scholar in the area of unpaid internships, and the author of the law review article: Dealing with the Problem of Unpaid Interns and Nonprofit/Profit-Neutral Newsmagazines: A Legal Argument that Balances the Rights of America’s Hardworking Interns with the Needs of America’s Hardworking News Gatherers.

Note: The information contained in this blog is provided for informational purposes only, and should not be construed as legal advice or legal opinion.

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