A federal judge has held the producers of the 2010 movie Black Swan violated the Fair Labor Standards Act by failing to pay interns who worked on the movie. Although the case initially caught our eye because Captain America is being filmed in downtown Cleveland (and because Black Swan is a great movie), it does have potentially far-reaching implications.
Believe it or not, when it comes to “unpaid” interns, the FLSA generally requires for-profit private employers to comply with its minimum wage and overtime requirements. The U.S. Department of Labor, which has responsibility for implementing the FLSA, has set out a six-factor test for determining when an exception to that general rule applies. Essentially, the internship must be akin to an educational or training opportunity for the benefit of the intern, rather than simply free labor for the employer. The exception is intended to be a narrow one, and unless the employer meets all six factors, it must pay interns at least minimum wage, and must pay overtime where applicable.
This is not the first unpaid wage case under the Fair Labor Standards Act involving interns. However, the case still may come as a shock to many private employers (and a pleasant surprise to many interns) who assumed that interns did not have to be paid. In businesses that use lots of unpaid interns, the interns could join together to form a group lawsuit, known as a “collective action.” Collective actions under the FLSA can be very, very costly for employers and result in big verdicts and settlements for individuals, as we’ve previously discussed on this blog.
The FLSA’s rule on unpaid interns does not apply only to movie studios, but instead to most all private, for-profit employers. Still, maybe the producers of Captain America should take a short break from blocking Cleveland’s streets to read the decision in the Black Swan case.
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