Unpaid interns fight for a paycheck

intern lawsuit
The law isn't clear as to when employers are required to pay interns.

Some unpaid interns who've been fighting for a paycheck will have to keep fighting.

Back in 2013, a district court ruled in favor of three interns suing Fox Searchlight for back pay. But on Thursday, a federal appeals court sent that suit back to the lower court, ordering it to reconsider -- bad news for the interns.

The former interns, who worked on the set of the movie Black Swan and in the company's corporate office, allege Fox violated federal and state labor laws by hiring them as unpaid interns and giving them the duties of full-time employees.

They worked ten-hour days setting up office furniture, taking out the trash and running errands. One intern had to buy "a non-allergenic pillow for Director Darren Aronofsky," according to court documents.

None of the three plaintiffs, who were college students or recent graduates, received course credit for their work.

Appeals court judge Catherine O'Hagan Wolfe said that this case -- and others like it -- boils down to one question: Who got more out of the relationship, the employer or the intern?

If an intern derives the most benefit, then employers don't have to pay them. But if the arrangement is to the employer's advantage, then the interns must be paid.

"Unpaid internship programs can greatly benefit interns. For this reason, internships are widely supported by educators and by employers looking to hire well-trained recent graduates," Wolfe wrote in the appellate court's decision.

But, she added, interns can also be exploited as free labor and can be left without an "appreciable benefit."

See the 10 best companies for interns

In her ruling, Wolfe said each internship should be evaluated individually.

Wolfe issued another ruling Thursday in a different internship suit that cited these same guidelines.

That case was filed against the Hearst Corporation -- the parent company to magazines such as Cosmopolitan and Harper's Bizarre -- by eight unpaid interns in 2012.

Wolfe and another appeals court judge overturned a lower court's decision to dismiss the Hearst suit, and ordered the district court to reconsider the case using the criteria outlined in her Fox Searchlight decision.

Both cases could have a big impact on how internships are managed in the future. And they may affect ongoing legal battles, including suits brought against the talent agency ICM and talk show host Charlie Rose.

So far, interns have prevailed in at least two cases.

Conde Nast agreed to pay $5.8 million in a class action lawsuit involving thousands of the company's former interns in November 2013 -- but the company later ended its internship program altogether.

And interns for "Saturday Night Live" won a $6.4 million settlement from NBCUniversal in a similar suit in October of last year.

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