As we have discussed in previous posts, two of the biggest trends in employment law these days are FLSA lawsuits for minimum wage and overtime filed by cheerleaders and interns. These two groups of people have a lot in common: they’re often young, working extremely hard for little or no pay, hoping that their experience will translate into connections for future paying work and passionate about their industries. Another element they share is the widespread assumption until one or two years ago that, for many of these reasons, they did not deserve to be paid minimum wage or overtime. There are of course many legitimate, educational and well-paying jobs in both fields, but there is also a huge opportunity for companies to take advantage of these young, inexperienced workers desperate to get out into the real world.
Cheerleaders have filed suit against some of the best known sports teams in the country, including the Oakland Raiders, the Tampa Bay Buccaneers, the Buffalo Bills, the Cincinnati Bengals and the New York Jets. Some of these cases have already settled: the Bengals settled for over $250,000.00, the Buccaneers for over $800,000.00 and the Raiders for $1.25 million. The Bills have disbanded their cheerleading program altogether. The information about working conditions revealed as a result of these actions prompted the state of California to pass a law requiring cheerleaders to be paid like any other hourly employees. Similar legislation is pending in New York. A side effect of these lawsuits is the public exposure of team handbooks containing the voluminous and often ridiculous rules that control every possible detail of cheerleaders’ appearance.
Meanwhile, interns have banded together in almost every industry imaginable to fight for their rights to fair pay, from media and publishing to modeling and fashion. Internship wages is especially complicated because until this wave of lawsuits, there was almost no caselaw on the issue. The case most commonly cited in discussions of internship wages was a 1947 Supreme Court case about training apprenticeships for railroad workers. In the past year, district courts have begun ruling on whether particular groups of interns are entitled to FLSA protection. The results, of course, were mixed. One court found that interns who worked for Fox Searchlight Pictures on movies such as “Black Swan” and “500 Days of Summer” should have been paid minimum wage and overtime because they essentially performed the work of regular employees and received little education, special skills or benefits that they could not have obtained in any office job. Another court came to the opposite conclusion about interns employed by the Hearst magazine conglomerate. The Second Circuit Court of Appeals took up the question and ruled that the lower courts had not decided the cases on the right grounds and that the fundamental question should be whether the intern or the employer is the “primary beneficiary” of the internship. Since that time, the interns have requested a re-hearing before a full panel of all the judges on the Second Circuit.
Although the relevant caselaw may not be not completely clear at this time, already plaintiffs have started realizing major gains. Actions are settling for millions of dollars. For example:
- NBC settled with interns who worked on Saturday Night Live and other television shows for $6.4 million. Like many interns, the plaintiffs performed tasks such as filling out paperwork for show guests, filing papers, processing cash envelopes, running errands, assisting at shoots, researching ticket prices and communicating with tour agencies.
- Magazine publisher Condé Nast settled with interns on W Magazine, the New Yorker and other magazines for $5.8 million. These interns had similar duties, including packing and unpacking accessories, running errands, responding to e-mails, proofreading and line-editing and filling out paperwork—and were paid an average of $1 per hour or less.
- Television giant Viacom recently settled a lawsuit with interns who worked at TV channels including MTV, BET, Comedy Central and Nickelodeon. Depending on the participation by eligible interns, the settlement could be worth up to $7.2 million.
These lawsuits are not unlike the swell of exotic dancer cases that have been filed over the past several years. Like interns and cheerleaders, there had been a longstanding assumption that exotic dancers did not need to be paid regular wages. The argument of strip clubs was that these dancers were “independent contractors” and that therefore the clubs could force them to work for tips only. However, clubs typically subject exotic dancers to extensive control, from the precise types of outfits they can wear and the ways they must interact with patrons to the lengths of their shifts and the number of days they are required. Dancers have very little investment in the clubs and have no input over their operations. Almost every court to examine the issue has decided that exotic dancers are regular employees who are entitled to minimum wage and overtime, not independent contractors.
At Pelton & Associates, we hear often from our clients that employers justify failing to pay correctly because “That’s how it’s always been done” and “Employees are lucky to have a job.” Frequently our clients do not even know that there are federal and state laws that guaranteeing that many types of workers must be paid minimum wage and overtime or that they are among the types of workers protected. The fact that an illegal policy has always been in place does not make it right or legal.