Class Action Lawsuit may Impact Internship Programs

Small business owners who use interns should carefully watch the outcome of a high-profile class action lawsuit filed against the magazine giant Condé Nast.

Class Action Lawsuit may Impact Internship ProgramsThe Litigation

In June, two interns, Lauren Ballinger, a former intern at W Magazine, and Matthew Lieb, a former intern at the New Yorker filed suit against the magazine media conglomerate Condé Nast. The former interns complaint alleged that were paid well below minimum wage rates, with Lieb alleging that he was paid a total of $300 for a complete summer of work, while Ballinger was paid $12 per day for 12-hour shifts. In their complaint filed in the Federal District Court in Manhattan, the former interns claim that this payment, or lack thereof, ultimately violated federal and state labor laws.

The Law

Under the Federal Fair Labor Standards Act, interns are not required to be paid for their services. However, the company sponsoring the internship must provide students with a valuable learning experience that is the equivalent to the experience to be gained in a classroom setting.

One of the issues in the case against Conde Naste is whether “interns” are actually misclassified employees. This was found to be the case when former Fox Entertainment interns sued the company for lack of sufficient pay while working on the set of the movie Black Swan. A federal judge found in favor of the plaintiffs, finding that the work the interns conducted easily put them in the realm of “employees.” This entitled them to at least the minimum wage. The Federal Department of Labor has been relatively clear on what constitutes and “intern” even go so far as providing a 6 point test for determining whether one is working as an employee, or intern.

 So what does it all mean for local Illinois businesses? The recent increase of litigation regarding the status and wages of interns/employees could have an impact on future federal employment law, because most of the recent intern cases have been brought in federal courts. The issue is that many interns, especially in high demand industries, are quickly becoming quasi-employees, who do the work of full time employees. The bottom line: if you use interns/conduct an internship program at your small business, call the attorneys at Gierach Law Firm in Illinois. We can help you understand the federal labor and employment laws that affect and impact you and your business. Our team works with businesses in Chicago, Naperville, Wheaton, St. Charles, and many other communities.