Unpaid Interns: Real World Work Or Just Free Labor?

Alex Footman worked as an unpaid intern for the award-winning film Black Swan. He and another former unpaid intern for the movie are suing the film's production company for back pay.

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MELISSA BLOCK, HOST: It's estimated that a million Americans work each year as interns, about half won't get paid. And the small class of unpaid interns is questioning that practice. They're suing a major Hollywood studio, Fox Searchlight, claiming they should have been compensated for their work on a recent film.

NPR's Beenish Ahmed tells us more.

BEENISH AHMED, BYLINE: "Black Swan" is a film about a young ballerina struggling to succeed in the unforgiving world of professional dancers.

(SOUNDBITE OF MOVIE, "BLACK SWAN")

VINCENT CASSEL: We're opening our season with my new version of "Swan Lake." Taking the role of our new Swan Queen, the exquisite Nina Sayers.

AHMED: "Black Swan" won numerous awards. It grossed over $300 million. But some of those who contributed to the production didn't get a dime for their work. Enter the unpaid interns.

ALEX FOOTMAN: This was six months of my life, which left me with nowhere further along in my career than before.

AHMED: That's Alex Footman. He was hoping an internship with "Black Swan" would open doors in Hollywood. Instead, it's made him rethink his career plans. Footman is part an open class-action lawsuit against the film's producer, Fox Searchlight Pictures. He and another unpaid intern, Eric Glatt, are suing to win back-pay for the hours they worked. They're also filing for an injunction that would keep the company from hiring unpaid interns in the future.

FOOTMAN: It was not a learning experience and that was what I had expected. This really just seems like I was just working and wasn't getting paid for it.

AHMED: Footman says he filed papers and ran errands alongside paid employees. Glatt worked as an accountant who kept financial records for the production. This is the sort of work the Department of Labor says may be illegal for unpaid interns to do. The Supreme Court ruled over 50 years ago that only work done for training purposes could go unpaid, but the department says companies began skirting the rule.

Last year, it issued a six point test that for-profit internships must pass to comply with labor laws. Ross Eisenbrey pushed for that test. He's the vice president of the Economic Policy Institute, a think tank that looks at life for working class Americans.

ROSS EISENBREY: Really, the essential ingredient is that it has to be for the benefit of the intern, not for the benefit of the employer.

AHMED: Representatives from Fox Searchlight declined to speak with NPR for this story. They did issue a statement about the case. It reads, in part: Fox Searchlight internships comply with all federal and state laws and regulations. The statement also says that the company provides interns with a valuable real world business experience. It's this real world experience that Bob Yari thinks is necessary to make inroads in Hollywood.

BOB YARI: The film industry is an industry that's very difficult to break into.

AHMED: Yari heads Yari Film Group, which made "Crash" and "Dave Chappelle's Block Party."

YARI: Internships are a way to allow outsiders to come in and start the process of getting a foothold in the industry. I don't think they're done because they don't want to pay someone to get coffee.

AHMED: Internships are now an almost essential first step on the career ladder, says Phil Gardner. He directs the Collegiate Employment Research Institute at Michigan State University. He says companies don't pay interns because they can get away with it.

PHIL GARDNER: Nobody's been called on this and in economic times when you're cutting the bottom line, you're meeting your third quarter, I think the rationale is, why pay anything for them?

AHMED: Gardner says interns don't know what to expect from employers or what laws they might be breaking. Since interns hope to land a paid position, they aren't likely to file complaints, but some big companies are just as hard pressed as job seekers in the current economy.

Helana Natt is the executive director of the Greater New York Chamber of Commerce. She says companies just can't afford to pay interns the minimum wage.

HELANA NATT: I'm sure, if they can, they would. People don't understand, when you're hiring people, it takes a lot of time away.

AHMED: Natt says companies have scaled back human resource budgets and use internships as a low cost screening process. But Ross Eisenbrey thinks unpaid internships cut costs beyond hiring expenses. He says companies have saved big time by turning the entry level jobs of yesterday into the unpaid internships of today.

EISENBREY: The middle class is being undermined and the way it's being undermined is by having salaries, wages and benefits undermined. Nothing does that more directly than allowing employers to employ people without paying them.

AHMED: Eisenbrey is closely watching the "Black Swan" case. He says a win for the plaintiffs could mean serious changes for this booming class of workers.

Beenish Ahmed, NPR News, Washington.

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