Unpaid interns file lawsuits

A look at Marketplace's internship area. Marketplace interns are paid, but the unpaid internship is a common work experience for many college and graduate students. Now some are saying that businesses need to pay up.

Kai Ryssdal: Back in the day, back in the old economy, you did one, maybe two unpaid internships during or right after college. Then you went out and got yourself a full-time job.

That's just not the way it is anymore. Now it's multiple internships -- most of them unpaid. And the interns in question -- not all of them young and fresh-faced, by the way -- have had enough. Marketplace's Nancy Marshall Genzer reports.

Nancy Marshall-Genzer: Eric Glatt always wanted to work in movies. At age 40, he decided to start a second career in film. He was elated when he got an unpaid internship with Fox Searchlight in 2009 working on the set of the movie, "Black Swan." His background was in finance. So, he went to work in the accounting department. His job included...

Eric Glatt: Taking petty cash to set, collecting receipts.

Glatt says that's what a studio accounting clerk does. And that was his job title. He wasn't in college anymore. So he didn't get any college credit. Glatt says most of the other unpaid interns on the set were also doing entry-level jobs. Glatt got to thinking...

Glatt: You know, we were in the middle of a jobs crisis and here was a big corporation basically getting away with soliciting free labor.

Glatt decided to sue Fox Searchlight. Last September his attorney, Elizabeth Wagoner, filed a class-action lawsuit charging that Fox violated federal and state labor laws. Wagoner has filed two other suits against other companies.

Elizabeth Wagoner: We have entry-level jobs that are being called internships so that employers have an excuse to pay no wages. We're just saying that an entry-level job deserves to be paid at least the minimum wage.

Harry Katz is a labor economist at Cornell. He says this is happening because employers have a lot of power in this tight job market.

Harry Katz: And so they have the leverage to offer these terms and have lots of people lined up to take them. That only happens in a context of high unemployment and excess supply of labor.

But Eric Glatt, doesn't think workers will put up with unpaid internships much longer.

Glatt: The tipping point has arrived. And I think this practice is coming to a swift end.

Fox Searchlight has issued a statement in response to the lawsuit. It says Fox internships comply "with all federal and state laws and regulations... while also providing... valuable 'real world' business experience."

In Washington, I'm Nancy Marshall-Genzer for Marketplace.

About the author

Nancy Marshall-Genzer is a senior reporter for Marketplace based in Washington, D.C. covering daily news.
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The unpaid internship phenomenon has taken on a whole new form since interns have decided to file lawsuits against their employers. An internship is supposed to be learning experience in the real world of whatever field you are interested in. An intern goes into the situation knowing they won’t get compensated financially, but they will learn and gain valuable knowledge. But exploitation isn’t supposed to be part of the equation. Since the recession, more interns are finding themselves doing work they otherwise wouldn’t-work that would have earned a salary pre-recession. Across the country, interns are reporting the same thing, and some have decided to take action. It will be a tough task going against a big corporation, but like most things in life, the toughest tasks are usually the ones worth fighting. The only way to cure exploitation is through litigation.

Answer is clear, liberalize the labor market. If you have people showing up with little to no skills to offer, but want to learn, then employers should be able to legally pay them whatever both parties agree without any extra requirements or paperwork, perhaps $1 per hour the first week, going up a $1 per hour per week as the person becomes more valuable. Often times it's more trouble setting up the payroll accounting than the person is intially worth to the business. We shouldn't have to play games with calling people interns to avoid the regulations.

I disagree completely. This will set up the same inequity and exploitation that "internships" do. In professions that dangle the promise of advancement to a paying job, people will line up to work for $1/hour; this in turn will provide an incentive to the employer to simply cycle through different $1/hour-employees because of the amazing savings. I do acknowledge that setting up payroll and meeting the requirements to hire employees is WAY too complicated. I faced this when trying to hire in-home care for my autistic son. Really ridiculous amount of complicated paperwork in the state of California.

Thanks, Karen, for the supporting comment. And thanks to Nancy Marshall-Genzer and Marketplace for giving our lawsuits such thoughtful consideration and coverage. I honestly believe it's only a short matter of time before people wake up to the disastrous way this practice has gotten completely out of control. Anyone interested in following or getting involved in this topic, please feel free to reach out to me.

I have a FB page, Interns≠Labor: https://www.facebook.com/pages/InternsLabor/258846337493668
and a FB group, Internships for Education (Not Labor): https://www.facebook.com/groups/Intern.X/
and can be reached via email: intern.x@gmail.com

And I'd love to see this OWS Arts & Labor flyer—"Interns! Know Your Rights"—get shared far & wide: http://artsandlabor.org/interns-know-your-rights

Eric Glatt

I'm thrilled to hear about the lawsuit against Fox Searchlight. It's astounding to me how many film companies (and other glamour industries) get away with exploiting workers in the name of "internships." But equally astounding is Harry Katz's claim that this "only happens in a context of high unemployment and excess labor" and that people won't stand for it. He obviously has not been around Hollywood. In the '80s, I had an unpaid job in the film business for a director (who himself was getting paid for his work), and in the '90s again as a graduate student I worked for someone who was happy to put me behind a desk and have me do unpaid clerical work in Hollywood. I still get steamed when I think about how I had to pay for my own gas and parking to perform a job for free that down the street commanded a real salary. (I quit after one week.) Ask anyone who makes a movie, and you'll hear of droves of unpaid laborers, hopefully showing up for work and believing this is the way to get a real job in the film business one day. Why is it that there are clear labor laws designed to protect people from being exploited by an industry that makes billions of dollars, and yet it has been happening for decades? Will the laws only be enforced through lawsuits? It's true that nobody is forced to be an intern; but that is no justification for using people who are actually adding value to your company in exchange for nothing but an empty dream.

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