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Unpaid interns cash in

November 18, 2014

The owners of magazine conglomerate Condé Nast Traveler may have to scale back their travel for next year after reportedly reaching a $5.8 million settlement with a group of former summer interns.

The approximately 7,500 former interns, all of whom were paid either nothing or sub-minimum wage rates for their summers spent working at Condé Nast properties such as W Magazine and the New Yorker, filed the class action suit last year, claiming that the magazine’s internship program violated the minimum wage provisions of the Fair Labor Standards Act.

The settlement comes in the wake of a number of similar, high-profile cases involving internship programs at popular media outlets such as NBCUniversal, Fox Searchlight Pictures, and The Charlie Rose Show. NBCUniversal’s case, which included interns working on “Saturday Night Live,” settled in late October for $6.4 million. Fox Searchlight is currently appealing a New York court’s decision that two of the unpaid interns on the set of its movie “Black Swan” are entitled to back pay, and faces a separate class action suit from a different group of interns which is currently pending.

As we have previously warned in this blog, unpaid internship programs are a very risky business. The Department of Labor’s guidance is clear that any internship in the private sector in which the intern either provides the employer with an “immediate advantage” from his/her activities, or where the intern performs tasks that would otherwise be performed by a regular employee, must pay at least the minimum wage for all hours worked. The fact that an intern may receive school credit for the internship does not in and of itself relieve an employer of its obligation to pay its interns.

If you currently maintain an unpaid internship program, or are thinking about doing so in the future, we strongly suggest consulting with a member of our Labor, Employment & Immigration Practice Group.

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