Case(s): Glatt v. Fox Searchlight Pictures, Inc., 811 F.3d 528 (2d Cir. 2016)

Facts: Former unpaid interns Eric Glatt and Alexander Footman, who worked on Fox Searchlight’s production of “Black Swan” in New York City, filed  suit in the Southern District of New York in the Fall of 2011, claiming that the company had violated the Fair Labor Standards Act and New York labor law by misclassifying them as unpaid interns and not entry-level employees. The two named plaintiffs alleged that they performed routine tasks such as making deliveries, organizing file cabinets, making photocopies and taking lunch orders, they said. The former-interns claim that the company’s unpaid internship program violated minimum wage and overtime laws.

Timeline of litigation: 

October 11, 2012: Despite Fox’s attempts, U.S. District Judge William H. Pauley has ruled that the lawsuit is open to a larger pool of plaintiffs. The original suit was filed against Fox Searchlight but is now open to all Fox Entertainment Group interns, including the internship programs in Fox’s various divisions, as well as corporate interns.

June 2013: U.S. District for the Southern District of New York Judge William H. Pauley III has ruled in the interns’ favor, holding that Fox did, in fact, misclassify them as interns, as opposed to entry-level employees. Pauley held that the interns, who were responsible for running errands, and making photocopies and coffee, provided free labor to Fox, while they received little educational training in return. As such, they should be labeled and compensated as entry-level employees.

In addition, Pauley certified a class action over the internship programs of Fox Entertainment Group.

July 25, 2013: Fox filed to appeal the ruling that the former interns were actually entry-level employees. Fox is seeking permission to appeal the June ruling (that granted a bid for collective and class action certification from an intern at Searchlight’s corporate offices), arguing that the Second Circuit should identify the standard for determining whether unpaid interns are workers entitled to wages.

August 28, 2013: Fox has a small victory to speak of: a New York federal judge narrowed the scope of collective action claims brought against Fox Entertainment Group Inc. on behalf of unpaid interns allegedly owed wages, but he refused to strike two Fox entities from the definitions of previously certified class and collective groups.

September 18, 2013: Fox Searchlight Pictures Inc. can immediately appeal findings that some unpaid interns should have been classified as employees and paid, a federal judge said. U.S. District Judge William H. Pauley in Manhattan filed an order today allowing the action. Pauley’s said his ruling in June that internships must meet a strict test to be exempt from minimum-wage laws conflicted with one by U.S. District Judge Harold Baer Jr. in a similar case against publisher Hearst Corp. and the differences should be addressed by a higher court.

November 2013: The Second Circuit Court of Appeals agreed to hear Fox’s appeal. The Second Circuit granted Fox’s petition for leave to pursue an interlocutory appeal of U.S. District Judge William Pauley’s decision granting class action certification to the former interns, holding that they were, in fact, employees and not interns.

April 1, 2014: Ex-Fox unpaid interns fired opening salvos Friday in their Second Circuit case hinging on whether interns qualify as “employees” under wage-and-hour law. Fox is fighting U.S. District Judge William Pauley’s June decision, which granted class and collective action certification to former interns pursuing wage-and-hour claims.  Fox wants the Second Circuit to weigh in on the standards the lower court applied when it granted class and collective action certification, and nix both the class and collective group.

July 14, 2014: Interns should not be covered by federal wage requirements unless the employer primarily benefits from the relationship, Fox Entertainment Group Inc. told the Second Circuit on Friday. Fox argued in a reply brief that a group of unpaid interns should not have been allowed to bring their suit, which alleges violations of the Fair Labor Standards Act’s wage requirements, collectively. Fox added that the Second Circuit should adopt a “primary beneficiary” test for determining whether interns qualify as employees under the FLSA.

Friday’s reply briefs come a few days after several amicus filings in the Fox case, including one submitted by the U.S. Department of Labor, which supported the interns. In a July 7 amicus brief — one of several that have been filed in the two Second Circuit appeals — the DOL explained that there is an exception to the FLSA’s wage requirements for “trainees” whose work is intended for their own benefit.

January 30, 2015: The Second Circuit Court of Appeals heard oral arguments from attorneys representing Fox and the plaintiff interns.

July 2, 2015: The Second Circuit issued its decision, holding that the “primary beneficiary” test should be used to decide whether unpaid interns should be deemed employees or trainees. The court also held that this test requires highly individualized inquiries—a conclusion that may deal a blow to plaintiffs’ abilities to obtain class or collective certification in these cases.

July 14, 2016: 21st Century Fox Inc. has settled class-action litigation by former interns, who sued, alleging that the film company violated the Fair Labor Standards Act and New York labor law by misclassifying them as unpaid interns and not entry-level employees. According to papers filed on Tuesday in Manhattan federal court, Fox Searchlight Pictures and Fox Entertainment Group will pay $495 to each claimant who interned without pay for at least two weeks at various times between 2005 and 2010. Several dozen people are eligible for payments under the settlement, which requires approval by U.S. District Judge William Pauley in Manhattan.