Lawsuits Could Impact Unpaid Internships in Corporate America

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As you begin building your career path, the unpaid internship is a traditional starting point — but beware of its hidden dangers.

Yes, your internship can build experience and connections, but what if the duties assigned to you are the same as those of paid, full-time employees who also enjoy the benefits of employment —unlike you?

Former Harper’s Bazaar unpaid intern Xuedan Wang claimed the legendary high-end fashion magazine worked her more hours than full-time employees without any wages or other benefits awarded to the company’s employees. She and other unpaid interns filed a class action lawsuit in 2012 against Hearst Corp., the magazine’s publisher.

Although a New York District Court judge in May denied the class action lawsuit, saying it failed to meet the class requirement, it doesn’t diminish the underlying issue: What protections are in place for unpaid interns?

Guidelines for Legal Unpaid Internships

In April 2010, the U.S. Department of Labor issued guidelines as part of the Fair Labor Standards Act to prevent illegal unpaid internships from occurring, stating that internships should be comparable to school training.

The federal government published a set of standards after the Walling vs. Portland Terminal Co. case, which examined the rights of trainee railroad workers. Businesses now must meet these requirements by offering workshops, software training or lectures, and having supervisors work alongside interns.

The following six criteria for an unpaid internship define the legal requirements:

  1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment.
  2. The internship experience is for the benefit of the intern.
  3. The intern does not displace regular employees, but works under close supervision of existing staff.
  4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded.
  5. The intern is not necessarily entitled to a job at the conclusion of the internship.
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

As you consider whether or not to take an unpaid internship, find out if the company you’re interested in meets these requirements.

Ask potential employers about the expected day-to-day duties. Internships are still extremely common in fields like publishing, fashion, film and nonprofits. They may be the only way to make networking connections and learn basic trade skills.

Students Fight Back Against Unpaid Internships

NYU student Christina Isnardi is at the forefront of this controversy.

After undergoing two unpaid internships — one where she claimed she was given more work than an unpaid intern should expect and another where she was only given menial tasks — Isnardi decided to fight back.

She started a petition in April to prevent postings of illegal unpaid internships in her college career center. That petition now counts with more than 1,000 student signatures. She is encouraging students to take legal action.

“Students can fight illegal unpaid internships by simply not taking them,” Isnardi told USA Today. “We must become aware of our rights as interns and recognize that we are perpetuating our own exploitation, more pressure needs to be put on local, state, and federal governments to enforce the labor laws that they wrote into law.”

Alex Footman and Eric Glatt claimed their unpaid internships during the production of the hit movie, “Black Swan,” failed to provide an educational experience, according to the lawsuit filed against the movie’s distributor, Fox Searchlight Pictures. In 2012, the case became a class action lawsuit. It entered into oral arguments on May 3.

Former intern Dajia Davenport filed a $50 million lawsuit in February against Elite Model Management, alleging the company had unpaid interns work over 40 hours a week. The case is not settled.

The outcome of these lawsuits could impact the future of unpaid internships and perhaps encourage more students to speak out against unfair labor practices.

How successful is an unpaid internship?

One of the benefits of a paid internship is the money. It can help you start paying down on your student loans. If you don’t have a job, an unpaid internship could put you deeper in debt.

A 2012 study by the National Association of Colleges and Employers shows paid interns fared much better than their unpaid counterparts in the job market.

While 60 percent of 2012 college graduates in paid internships received at least one job offer, only 37 percent of those in unpaid internships received offers, the study shows.

Another sad statistic: Paid interns spend 42 percent of their time on professional duties, while their unpaid colleagues spend 30 percent of their internships on the same career-building tasks.

The alternative to an unpaid internship is always a part-time job. That way you’ll split your time between studying and earning money to avoid trouble paying your student loans.

Most college students and recent grads are already busy paying back their student debt without having to worry about businesses exploiting their talents.



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