Proponents of unpaid internships in the music industry are on their heels but still holding ground as a recent spate of class-action lawsuits has called the basic legality of such programs into question.
In June, Atlantic Records, along with parent company Warner Music Group, became the target of a pair of lawsuits alleging that scores of former unpaid interns at the company had been entitled to wages under state and federal labor laws. Similar suits followed earlier this month against Columbia Records/Sony Music Entertainment, and, just this week, Sean “Diddy” Combs’ Bad Boy Entertainment and its distribution partner Universal Music Group.
But rather than rush to reinvent an entrenched system, representatives of a number of major and independent labels say they’re taking a wait-and-see approach as the cases work their way through the courts.
“These lawyers sense an opportunity and are fishing for disgruntled interns to file a wide variety of lawsuits,” a senior executive at one of the major labels being sued tells Billboard, speaking on the condition of anonymity due to the ongoing litigation. “We feel confident in our ability to see them off.”
The ethics of unpaid internships, in which young, wet-behind-the-ears workers often put in long hours performing menial tasks in the hopes of improving future employment prospects, had long been the subject of hushed, break room and after-hours discourse. But the ethical gray area turned into a legal minefield two months ago, when a federal judge issued a precedent-setting ruling in favor of two former Fox Searchlight interns who made photocopies and took lunch orders on the set of the 2010 film “Black Swan.” Since then, a wave of internship suits has struck a range of entertainment and media companies, including the aforementioned major labels, NBCUniversal and Condé Nast.
“A lot of these internships are being used to exploit those who are new to the work force, and interns have had enough of it,” says Maurice Pianko, lead counsel representing the plaintiffs in the Atlantic/Warner case and founder of legal action group Intern Justice. “There was a time when interns were actually being trained for a job within a company. But now many of them are not getting training and they’re not getting jobs.”
As upheld in the “Black Swan” ruling, legal unpaid internships in entertainment and other industries must adhere to a stringent “six-factor test” laid out in the federal Fair Labor Standards Act. The test requires, among other things, that the internships be primarily educational, not replace the work of a traditional employee and work toward the benefit of the intern with no immediate advantage derived by the employer. Additionally, the ruling indicated that providing college credit for unpaid internships, long viewed as a protective measure for the employer, doesn’t exempt employers from any of the six requirements.
“These suits are distracting and time-consuming, so you can never rule out a settlement, but we feel we have a good case,” says the executive at one of the major labels facing a suit.
Should the plaintiffs in the cases against the majors succeed or settle, many, if not most, labels will face the proposition of either paying their interns or retooling their programs to avoid legal and financial repercussions. In the Atlantic and Columbia suits, classes numbering in the thousands stand to win liquidated damages in addition to back pay of minimum wage for the total number of hours worked. Pianko estimates that a victory in favor of the plaintiffs in his case would cost Warner millions of dollars in damages.
Additional reporting by Ed Christman.