Fox Misclassified Interns to Avoid Paying Them

MANHATTAN (CN) - Two unpaid interns on the film "Black Swan" were actually Fox Searchlight employees, and a third intern can represent a class, a federal judge ruled.

Eric Glatt and Alexander Footman sued Searchlight and its parent company, Fox Entertainment Group, in October 2011 under the Fair Labor Standards Act and New York Labor Law.

Both men worked on production of "Black Swan" in New York without pay or college credit. Two other unpaid Fox interns who did not work on that film later joined the suit. Kanene Gratts, an unpaid intern in California on the film "500 Days of Summer, alleged a separate claim for violations of California Unfair Competition Law.

The fourth unpaid intern, Eden Antalik, worked at Searchlight's corporate offices in New York.

Antalik will get to represent a class alleging violation of New York Labor Law, U.S. District Judge William Pauley III ruled Tuesday.

The judge also conditionally certified a collective action on Antalik's claims under the federal labor law. Outten & Golden will serve as class counsel.

Glatt and Footman meanwhile won summary judgment, with Pauley finding that they are "employees" covered by federal and New York labor laws.

Searchlight is their joint employer, according to the ruling, because it worked on "Black Swan" with the production company Lake of Tears. Pauley found that "Searchlight also exercised significant functional control. And in the end, it is all about control."

Though Searchlight argued for the trainee exception to federal and New York labor law, Pauley found it inapplicable.

"Undoubtedly, Glatt and Footman received some benefits from their internships such as resume listings, job references and an understanding of how a production office works," the 36-page decision states. "But those benefits were incidental to working in the office like any other employee and were not the result of internships intentionally structured to benefit them. Resume listings and job references result from any work relationship, paid or unpaid, and are not the academic or vocational training benefits envisioned by this factor.

"On the other hand, Searchlight received the benefits of their unpaid work, which otherwise would have required paid employees," Pauley continued. "Even under Defendants' preferred test, the defendants were the 'primary beneficiaries' of the relationship, not Glatt and Footman."

The court also cited evidence that Glatt and Footman performed tasks "that otherwise would have been done by a paid employee."

"Glatt and Footman understood they would not be paid," Pauley wrote. "But this factor adds little, because the FLSA does not allow employees to waive their entitlement to wages."

"Considering the totality of the circumstances, Glatt and Footman were classified improperly as unpaid interns and are 'employees' covered by the FLSA and NYLL," Pauley wrote. "They worked as paid employees work, providing an immediate advantage to their employer and performing low-level tasks not requiring specialized training. The benefits they may have received-such as knowledge of how a production or accounting office functions or references for future jobs-are the results of simply having worked as any other employee works, not of internships designed to be uniquely educational to the interns and of little utility to the employer. They received nothing approximating the education they would receive in an academic setting or vocational school."

The four-year statute of limitations has run, however, on the California claim advanced by Gratts, according to the ruling. Evidence showed that filming of "500 Days of Summer" ended before the cutoff date she needed - Aug. 2, 2008, the court found.

Pauley concluded the ruling with a denial of Gratts' motion for summary judgment.

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