Beginning in 2011, the fashion industry was hit with a tidal wave of lawsuits from interns. Diana Wang – a former “head accessories intern” at Harper’s Bazaar, who allegedly worked five days a week, sometimes from 9 am to 8 pm, in the accessories department of Harper’s Bazaar Magazine from August until December 2011 – got the ball rolling when she slapped Hearst Corporation, Harper’s Bazaar’s parent organization, with a class action lawsuit.
Accusing Hearst of violating federal and state labor laws by allegedly categorizing entry-level employees as interns to avoid having to pay them even a minimum wage, Wang’s lawsuit swiftly prompted other similarly situated unpaid (and underpaid) interns to file lawsuits in U.S. courts against The Row, Lacoste, Zac Posen, Burberry, Gucci, Calvin Klein, Marc Jacobs, Oscar de la Renta, Coach, Tommy Hilfiger, Fendi, Ralph Lauren and Donna Karan, among others.
Since the big rush of litigation, most of these suits have settled, with the exception of Wang’s, for instance, which as recently as this year was still making its way through the courts; the Second Circuit Court of Appeals sided with Hearst in January, holding that even if the plaintiff interns did not like some of the more menial tasks they were expected to do, they were still interns, according to the law, and not entry-level employees. Thus, they were not entitled to minimum wage.
Worth Your While?
Of the cases that have settled, the results for the individual interns have not been terribly rewarding. Late last week Nadine Craparotta, the lead plaintiff in the case against Ralph Lauren, was handed $7,500 from a $323,000 settlement. Her fellow plaintiffs were awarded less – $305 each, nowhere near the $114 and $210 per week they would have earned had they been paid minimum wage.
By far the largest reported settlement in fashion came in the case that Lauren Ballinger and Matthew Leib – unpaid interns for W magazine and The New Yorker – filed against Condé Nast in June 2013. When that case settled out of court, the publishing giant agreed to pay the class of 7,500 former interns a total of $5.85 million.
Regardless of whether the settlement amount is $5.85 million or $140,000 (the amount Mary-Kate and Ashley Olsen’s brand The Row agreed to pay last year to settle the lawsuit it was facing), the plaintiffs usually walk away with only a small fraction. This is due, in part, to the fact that the monetary damages sum must be split amongst all of the individual interns that choose to join the lawsuit. More significantly, however – and something that arguably very few of the interns are fully aware of when they agree to file or join such suits – is that the law firms that are responsible for filing these suits take usually take home more than 30 percent of that the monetary settlement.
In the case of The Row, that meant that Virginia & Ambinder LLP and Leeds Brown Law PC – the two law firms in the case – likely earned upwards of $45,000 (based on a contingency fee arrangement, in which the lawyers do not take money up front but instead, take a fixed percentage of the settlement). The individual interns, on the other hand, each walked away with less than $500.
This disparity is, as Tom Stebbins, the executive director of the non-profit Lawsuit Reform Alliance, told the New York Post, perfectly embodied in the more recent Ralph Lauren case. The settlement demonstrated, he says, “how broken the class-action system is because you have people who actually were not paid money getting pennies on the dollar while lawyers are walking away with over $100,000.”
The real benefit of the often-meager monetary damages amount that any of the plaintiffs stand to gain in such a lawsuit becomes questionable when that pay day is considered against the potential of backlash if the terms of a settlement (and thus, the names of plaintiffs involved) are not confidential.
Most of the lawsuits were, after all, met with no shortage of industry scorn, with many industry veterans categorizing the legal claims as “episodes in Millennial self-absorption and entitlement,” and many former intern-accepting brands and publications stopped welcoming students altogether for fear of being on the receiving end of a lawsuit.
As one former WWD intern, who was able to opt into the Condé Nast settlement (because WWD was then under the Condé umbrella) told Racked back in May 2015, she worried about opting in and taking the money since she was working as a freelance writer and feared that being tied to the lawsuit might “sully her reputation.”
“What if I can’t submit to a Condé publication [as a result]?,” she asked hypothetically in connection with the potential of joining the settlement.
Former Details intern Roderick David, who was also able to join the settlement, put it this way, “The Blacklist might be a wonderful TV program, but actually being on one? Maybe I won’t take accept the $1250 after all.” This notion of a blacklist is anything but a secret. As Forbes stated in connection with its coverage of unpaid internship-gate: “Students are so desperate for ‘work experience’ that they are willing to participate in unpaid internships without whistleblowing-and most interns are so acutely aware of the intern blacklist that they wouldn’t dream of suing anyway.”
The notion of there being strength in numbers is likely what drives most individuals to join in the settlement in a confidential or relatively under-the-radar capacity; being one of 7,500 former Condé Nast interns is very different than being Lauren Ballinger and Matthew Leib, the two named plaintiffs that first brought the case.
Either way, the outcomes of these lawsuits do tend to raise the question of whether these are terribly beneficial to former interns in the first place or whether they could more accurately be described as a way for class action lawyers – no shortage of whom, including the ones in these cases, have been known to allegedly “coerce” former interns into filing suits – to make a living.