Will Unpaid Internships Soon Be a Thing of the Past? Federal Appeals Court to Make Big Decisions

On Friday, Jan. 30, the Second Circuit Court of Appeals in Manhattan, New York heard arguments addressing the legality of unpaid internship programs. The city expects to hear the court’s decision later this year. It seems inevitable that the pending decision will set a precedent for future internship organization that could reverberate across the state and possible the nation.

The suit has to do with two prior cases brought against companies by former interns. One case involved allegations against Fox Searchlight Pictures; the other involved allegations against the publishing behemoth Hearst Corporation, owner of magazines like Cosmopolitan and Marie Claire. The Fox interns won their case; the Hearst interns lost theirs.

Both cases concern a critical 1947 Supreme Court ruling that once dictated criteria for unpaid railroad training. The judge in the Fox case used the criteria as a strict standard, while the judge in the Hearst case saw the criteria as a broad set of best-practice guidelines. The appeals court will determine which ruling is lawful.

These spotlight cases have encouraged other interns to bring similar lawsuits against diverse companies. Allegedly, many of these companies have required interns to maintain duties similar to employees without the benefit of fair compensation. Companies around the country have been reevaluating their internship programs — or removing them altogether — as a response to this intense legal action.

Internships can serve a purpose in terms of offering young people and newcomers to a field an opportunity to engage in apprenticeship. A Fortune.com article on the controversy argues for a “balance between both sides,” so youth can gain experience without worrying about being exploited. Many students and young graduates, for instance, are not in a position to take unpaid internships while struggling to pay bills.

If you feel like you’ve been doing the work of an employee without receiving fair compensation, you are not alone. At best, current laws regarding unpaid internships currently constitute a gray area. The federal appeals court decision will clarify how companies need to compensate their interns. Contact a New York discrimination attorney to learn more about the ongoing court battles and how they might affect you.

If you need assistance with a harassment, discrimination or wage and hour case, call Joseph & Kirschenbaum LLP today at 1 (212) 688-5640, or email us at info@jhllp.com.