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Hearst to 2nd Circuit: Clarify intern issue

Jun 18, 2013 / Media Coverage

thomsonreuters.com—Carlyn Kolker

The law governing unpaid interns has become so murky that even a victorious party in a current case is hoping an appeals court will weigh in to clarify it.

In the past two months, two judges in the Southern District of New York have issued opposing rulings on the topic of unpaid interns. On June 11, U.S. District Judge William Pauley ruled in a summary judgment motion that interns suing film company Fox Searchlight were employees.

A month earlier, U.S. District Judge Harold Baer declined to make a similar determination, ruling that the issue of whether interns suing publishing giant Hearst Corp were employees was appropriate for a trial. Baer also declined to certify as a class action the case against Hearst.

At issue in both cases is the central question of what constitutes an employee.

In the Fox case, the defense argued that the so-called "primary beneficiary" test - a test of whether the worker or the company is the primary beneficiary of the labor the intern provides - should be invoked to make the determination. Pauley rejected the defense's argument, calling the test "subjective and unpredictable."

In the Hearst case, Baer disagreed with the interns suing the publishing house, who said that a Labor Department checklist should be followed to determine if an intern is an employee. Instead, he looked to the "totality of circumstances" and let the issue proceed to trial. He noted the benefits test should be a part of this consideration.

The plaintiffs in the Hearst case have asked Baer to certify the case for an interlocutory appeal to the 2nd Circuit. Interlocutory appeals are unusual, as appeals courts rarely grant appeals midway through a case's proceedings in the district court.

And even though Hearst was essentially the victor in Baer's ruling, it has said it won't oppose the plaintiffs' request for interlocutory appeal, because it wants clarity on the law of interns.

Lawyers Seek Clarification

"Hearst submits that an in-district split with respect to the legal standard in two cases proceeding concurrently justifies immediate review by the Second Circuit," Hearst wrote in a Friday motion, in which it also referred to the plaintiffs' criticism of Baer's ruling as "baseless" and having "utter lack of foundation.

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The issue of the legal standards governing interns is likely to arise in the courts again soon. On June 13 two former interns at the New Yorker and W Magazine sued Conde Nast Publications, alleging the publishing giant violated federal labor laws by paying interns a nominal wage.

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The case against Hearst is Xuedan Wang v. The Hearst Corporation, U.S. District Court for the Southern District of New York, No. 12cv00793.

For plaintiffs Xuedan Wang et al: Adam Klein, Rachel Bien, Deirdre Aaron, Juno Turner, Justin Swartz, Michael Scimone, Molly Brooks, Paul Mollica and Sally Abrahamson of Outten & Golden.

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