Unpaid Intern Lawsuits: What Every Studio Owner Should Know

June 20, 2013 by  

By now, many studio owners have probably heard about the rise of class action lawsuits against businesses that rely on illegal unpaid internships.

In late 2012, Charlie Rose’s for-profit production company was the first to settle such a claim, paying out $250,000 in back minimum wages that it had failed to pay its entry-level workers. Just last week, Fox Searchlight Pictures suffered a resounding loss in the first of these new lawsuits to make it all the way to trial.

This Monday, a former Atlantic Records intern brought suit against the Warner Music Group, making them the first major music company on the chopping block. Their name has been added to a growing list of defendants that includes prestigious publishers like Condé Nast and Harpers.

These cases are not unique to big businesses. I’ve even heard from a former intern who took a small recording studio to the labor board in California and won the case soundly. That decision is currently in appeals, but it doesn’t look good for the studio owner.

If you haven’t looked into the practices at your studio, it’s time to do so now. This week, we’ll look at what separates a legal internship from an illegal one, and how to make sure your studio stays out of the crosshairs.

A Brief History

To those who have grown accustomed to the presence of unpaid internships, these may seem like new developments. But in reality, laws prohibiting the non-payment of workers have been on the books since the passing of the Fair Labor Standards Act way back in 1938.

Credit: Mikey Burton

Credit: Mikey Burton

It’s only been in the past decade-and-a-half that both prosecutors (and workers) have turned something of a blind eye to the practice.

If you ask the old-timers of the studio world, just like I did, many of them will tell you that back in their day, all the legit studios paid minimum wage to their gophers, general assistants and receptionists. No one had quite the imagination to think they could do otherwise.

It’s true that new workers often lack the skills to be nearly as productive as experienced hires. But for countless generations, training new workers was just considered part of the cost of doing business.

Some time between the late 1990s and early 2000s, all that began to change – not just in the studio world, but throughout the entire creative sector.

Between 1992 and 2008, the number of students entering internships in the U.S. tripled, according to the National Association of Colleges and Employers. It’s unclear how many of these internships are unpaid, but estimates range from about one-third to one-half.

Regardless of where you stand on the issue, it’s difficult to deny that this dramatic increase in unpaid internships has gone hand in hand with a sharp decline in the availability of paying entry level jobs, a record spike in youth unemployment, and what economists have taken to calling the “jobless recovery” from the Great Recession.

How To Stay On the Right Side of the Law

Not all unpaid internships are illegal, but there’s no question that according to existing labor laws, many are.

As Ross Perlin, author of Intern Nation writes, in 1947, a Supreme Court decision “established a narrow, common-sense exemption for those enrolled in a genuine training program,” but “few internships these days are serious about training, and…most don’t even pretend.”

There are a few ways to make sure your internship program stays on the right side of the law and avoids litigation. Internships that pays minimum wage are no problem at all, so that’s always a safe bet. And at non-profit firms, productive unpaid “interns” can simply be classified as “volunteers,” so there’s often no issue there either.

At for-profit companies however, the bar for an unpaid internship is set very high. In order to remain legal, any unpaid internship must be done for the express benefit of the intern, and the employer must receive no immediate benefit from the intern’s labor.

What exactly is an “immediate benefit”? Simply put, anything that resembles “work.” This includes answering phones, filing papers, entering data, distributing checks, picking up dry cleaning, going on mandatory coffee runs, mopping floors, cleaning toilets, washing dishes, and so on.

Our existing labor laws are not interested in the title we give to our new recruits – only their function. If it looks like a job, sounds like a job and smells like a job, it probably is a job. The law still holds that jobs have to pay, and the starting rate is minimum wage.

To qualify as a legal unpaid internship, the employer must be running something that resembles the kind of hands-on, structured vocational training that one would expect at a school. They must also not profit directly from the work of the intern in any way.

To help clarify the law, the Department of Labor offers a clear six-point guideline for keeping unpaid internships on the up-and-up. Of those six points, Maurice Pianko, an attorney with Intern Justice writes that the following points are the most commonly flaunted:

“The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;

The internship experience is for the benefit of the intern; The intern does not displace regular employees, but works under close supervision of existing staff;

The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded.”

That’s a pretty tall order to live up to, and it’s doubtful that many unpaid internships at recording studios live up to these standards at all times. In the case of Fox Searchlight, the judge found that each of these guidelines had been violated:

“[Fox] Searchlight received the benefits of their unpaid work, which otherwise would have required paid employees. Even under Defendants’ preferred test, the Defendants were the “primary beneficiaries” of the relationship…

“Undoubtedly, [the interns] received some benefits from their internships, such as resume listings, job references, and an understanding of how a production office works. But those benefits were incidental to working in the office like any other employee and were not the result of internships intentionally structured to benefit them. Resume listings and job references result from any work relationship, paid or unpaid, and are not the academic or vocational training benefits envisioned by this factor.

[The interns] performed routine tasks that would otherwise have been performed by regular employees. In his first internship, Glatt obtained documents for personnel files, picked up paychecks for coworkers, tracked and reconciled purchase orders and invoices, and traveled to the set to get managers’ signatures. His supervisor stated that “[if the intern] had not performed this work, another member of my staff would have been required to work longer hours to perform it, or we would have needed a paid production assistant or another intern to do it.”

If that sounds something like the internship program at your studio, you may be in trouble too.

The bottom line is that if you own a for-profit business and want to run an unpaid internship program, then it has got to be built around a rigorous training program. And if you want to benefit from the intern’s labor, you’ve got to pay them.

Keeping that in mind, there may be suitable compromises that could allow cash-strapped studios the option to give young hopefuls ample real world experience while benefiting from their valuable labor as well.

For instance, you might pay an intern for help to set up and break down at the beginning and end of a session. You could then invite them to stay and observe during the session (so long as they’re off the clock and not expected to be working) or to stick around to ask questions after you’ve wrapped up for the day. At minimum wage, this might cost a studio as little as $20 to $40 per session – A real bargain for an extra set of hands, and a potential win-win for everyone involved.

Similarly, you might actively train an intern in a new task off the clock (such as soldering cables, invoicing clients or printing stem mixes)  and then pay them to complete the actual job as contract work.

This may be something of a legal gray area, and you’d be wise to discuss it with your own attorney. But at the very least, it’s a clear step in the right direction compared to the ways in which many studios run their internship programs. If you ever did face a lawsuit, you’d actually have a real case to make in court, unlike Fox Searchlight. But perhaps just as importantly, you might be far less likely to attract one to begin with.

If you’re a young worker and are having trouble finding legal, non-exploitative internships, consider launching your own portfolio-building projects instead. Volunteering at a non-profit is also a great resume padder, and can be a fantastic way to earn real hands-on experience. In many cases, they even offer more intensive hands-on experience than for-profit firms because they need the help that much more. Both of these options can add tremendous value to your skill-set without devaluing the positions you hope to land in the future.

For And Against

We could debate the pros and cons of unpaid internships all day long in the comments section, but that’s not going to change the law.

By now, most of us have heard the stock arguments from both sides anyway. Defenders of unpaid internships say that they can be “A great way to gain experience.” But this only begs the question, “Would it be any less of a great experience if the intern was paid minimum wage?”

The common response here is “Yes, because the position wouldn’t have existed otherwise.” To which the obvious reply is “How do you know? That’s a pretty huge assumption to make.”

Jobs Board at AES last year

Jobs board at the 2012 AES Convention

Some of these lines of reasoning are difficult to resolve in a vacuum. Better perhaps, to look at the hard numbers and see what they say. At this point, those numbers seem to suggest that unpaid internships aren’t actually much of an “opportunity” at all.

Results of NACE’s 2013 Student Survey show that in a study of recent job hunts, 63% of graduating students who had paid internship experience received at least one job offer.

However, the same could only be said for 37% of unpaid interns. This gives unpaid interns a measly 1% advantage over students who took no internship at all.

Graduates with paid internship experience also earned far higher starting salaries than other applicants – By nearly 50%. The median starting salary for new graduates with paid internship experience is now nearly $52,000. This is far higher than their counterparts who had unpaid internships. They were able to secure average salaries just over $35,000. Ironically, even graduates with no internship experience whatsoever did better than the unpaid interns, averaging $37,000 to start!

Critics of illegal unpaid internships say that they destroy entry-level jobs, economic mobility and equality of opportunity. There may be yet another cost as well: A good case can be made that unpaid internships are just plain bad for business, too.

Regardless of whether you think unpaid internships are exploitation or opportunity, one thing is clear: Change is coming. Don’t let it get the better of you.

Justin Colletti is a Brooklyn-based audio engineer, college professor, and journalist. He records and mixes all over NYC, masters at JLM, teaches at CUNY, is a regular contributor to SonicScoop, and edits the music blog Trust Me, I’m A Scientist.

Joe Lambert Mastering Works with Reptar, Black Dice, Fanfarlo, Young Man

May 10, 2012 by  

Based in DUMBO, Joe Lambert Mastering has reported a recent run of top indie projects.

"Body Faucet"

Album highlights making their way through Lambert’s KEF 207.2 reference monitors start with Reptar’s Body Faucet (Vagrant).

Also in the queue were:

Black DiceMr. Impossible (Ribbon); Engineered/Mixed by Matt Boynton at Vacation Island Recording in Williamsburg.

FanfarloRooms Filled with Light (Atlantic); Produced by Ben Allen, Engineered by David Wrench at Bryn Derwen Recording Studio in North Wales.

Young ManVol. 1 (French Kiss)

Event Alert: Music Unites, Rolling Stone, Garnier Fructis Cover Reveal Party on Wed. Aug. 3

July 30, 2011 by  

Music Unites, the NYC-based non-profit organization dedicated to funding sustainable music education programs, is partnering with Rolling Stone and Garnier Fructis to celebrate the first ever unsigned artist cover.

Rolling Stone and Garnier Fructis are partnered with NYC's Music Unites for the Big Cover Reveal.

On August 3, one of the two “Do You Wanna Be a Rock & Roll Star?” finalists, either Lelia Broussard (see the SonicScoop feature on Brooklyn producer Dan Romer’s work with Leila here)or The Sheepdogs - together with music industry luminaries, VIPs and media, will gather at the Empire Hotel Rooftop in New York to celebrate the unveiling of the cover and raise funds for Music Unites. 100% proceeds from this event will benefit Music Unites.

As Music Unites explains it:

Rolling Stone’s “Do You Wanna Be a Rock & Roll Star?” contest began with 16 unsigned acts competing for the most coveted prize in music – the cover of Rolling Stone.  After four rounds of public voting, the two finalists battled it out on stage last month at the Bonnaroo Music Festival in Manchester, TN. The ultimate winner, in addition to being the first unsigned act to ever appear on the cover, will also receive a recording contract with Atlantic Records.

The winner will be announced on a billboard in Times Square on August 1 and they will also perform on “Late Night With Jimmy Fallon” the following day. On August 3, the winner will be joined by the Editors of Rolling Stone and Music Unites founder Michelle Edgar at the cover reveal party. Music will be provided by DJ Paul Sevigny.

Limited tickets to the invitation-only party are available for purchase for $50 at musicunites.org/events. Also, through Facebook, people can help support Music Unites simply by clicking “LIKE” on the Music Unites Facebook page and becoming a fan of the cause. Each new “LIKE” through August 1 is automatically entered in to a draw to win a pair of tickets to the exclusive cover reveal party.  All proceeds will go towards launching the Music Unites Youth Choir campaign to create after school programs across New York City’s five boroughs.

Proceeds generously donated to Music Unites by tickets sales for the Rolling Stone cover reveal event will enable the organization to build on the foundation it has created in its first two years inspiring and supporting the next generation of musicians and music professionals.

Music Unites programs and initiatives benefiting under-served communities in New York City, Chicago and Los Angeles, include the Music Unites Youth Choir, Empowering Women through Music, and Adopt-A-School. Music Unites has also hosted multiple workshops and discussion panels, some geared toward music education and mentoring for students, and others geared toward networking, for the music industry community at large.

Music Unites has fostered many exciting partnerships over the past two years, having presented several successful, inspirational and informative outreach events in conjunction with organizations including ASCAP, Girls Inc., The Grammy Museum, Bebe Stores Inc., The Intrepid Sea Air and Space Museum, and the UN Foundation. Some of the artists Music Unites has worked with include Sting, Mark Ronson, Chester French, John Forte, and more recently Kate Nash, Shontelle, Caitlin Moe, and Diane Birch.

Will Lelia Broussard, produced by Brooklyn's Dan Romer, or The Sheepdogs emerge victorious?

The Rolling Stone unsigned artist cover is on sale nationwide from August 5.

Full Coordnates:

WHO: Rolling Stone cover winner (either Lelia Broussard or The Sheepdogs). Music provided by DJ Paul Sevigny

WHAT: Rolling Stone cover party unveiling first unsigned act to be on the cover

WHEN: August 3rd, 2011 at 8pm til 11pm

WHERE: Empire Hotel Rooftop, 44 West 63rd Street, New York

PRESENTED BY:  Garnier Fructis  SPONSORED BY:  Heineken and Sobieski Wodka Polska

ADMISSIION: Limited tickets to the invitation-only party are available for purchase for $50 at musicunites.org/events, or via Facebook as detailed above.

Music Unites: Inspiration and Music Education in Motion Across NYC

June 27, 2010 by  

MIDTOWN, MANHATTAN: Charged up is a good way to describe the onset of Music Unites. A non-profit focused on bringing music education to underprivileged children in underfunded inner city school systems, Music Unites is one of many emerging organizations with an ambitious agenda.

A classically-trained pianist, Michelle Edgar launched Music Unites in mid-2009, after looking extensively for a charity that she would be thrilled to donate $1000 to. But lacking a match, she moved fast to start her own philanthropic program. Just a year later, Music Unites has made itself heard quickly by hosting innovative events, then following up with a star-powered style of community outreach that appears to be resonating.

The founder filled us in on the eve of two notable events in one week. First they’re teaming with Rolling Stone to present InTune with the Fiery Furnaces and DJ Alexandra Richards downtown on Tuesday, 6/29. The next day, Wednesday 6/30, Music Unites will be the sole charitable beneficiary of an anticipated Culture Project production, the performance of “Twin Spirits” with Sting and Trudie Styler at Jazz at Lincoln Center.

Why did you kick off Music Unites?

I wanted to create a community that supported emerging and established musicians across all genres of music, and broke down traditional barriers between classical, rock, hip hop and jazz—bringing that music to underserved communities and funding music education programs.

I also wanted to give artists a chance to develop and build a philanthropic outreach program tailored to what they’re passionate about. We work closely with the artists and their teams to develop long-term initiatives, and fundraise on the artists’ behalf to make their initiatives and programs come to life, so they’re proud of their initiatives which are personally tailored to what they stand for.

The community of artists and the showcases are meant to inspire artists of different genres to collaborate with one another, and expose people to new types of music across all genres that they traditionally might not be used to.

This seems to be a concept that’s gaining steady steam, city-wide. Why do you think the focus of Music Unites — bringing music education to underprivileged children in inner city school systems – seems to have such a sense of urgency?

An investment in music education is an investment in both our children and in our society: Our mission is to foster and nurture the next generation of young artists.

Michelle Edgar and Jaicko (far right): in on the outreach

Regardless of age, race, gender, or ethnicity, music has the ability to transcend barriers between people and effect positive social change. Music provides children with a creative outlet that promotes the development of self-discipline, self-esteem, cross-cultural understanding, teamwork, critical thinking, and problem solving skills. In adults, music can help strengthen the connection to our local community and society at large.

It’s well documented that the skills learned through musical training and education are critical to both scholastic and future workforce success. Music Unites strives to build a platform for emerging artists – one that connects with under-privileged youths to engage them in music education.

That’s a big mission to take on. So tell us about the approach you take to accomplishing your goals: How are you spreading the Music Unites message and helping it to take effect?

Started only one year ago, Music Unites has garnered much acclaim by raising $55,000 to support our first major initiative — The Music Unites Youth Choir, an inner city choir bringing together under-privileged children from the five boroughs of New York City together with our partners from the Young Audiences of New York.

Launched in fall 2009, this free after-school program allows young people to develop their musical, vocal and performance skills under the guidance of professional vocalists, musicians and theater artists, while exploring a variety of musical styles. The kids made their debut at Carnegie Hall in a Who tribute back in March and we’ve brought our artists, including John Forte and Jaicko, to do workshops and speak to the children. Back in May, we also brought the kids into a studio to record their first song they wrote.

On the educational outreach front, we’ve brought our services to inner city schools in Harlem and Brooklyn by doing programs with our artists where they go into the schools and share and inspire the children through their stories on how they got where they are today—teaching them the right lessons as well as their struggles and challenges along the way.

You do a lot of public events as well, including a dynamite duo this week: first InTune with the Fiery Furnaces and DJ Alexandra Richards on Tuesday, followed by benefitting from a a production of “Twin Spirits” with Sting and Trudie at JILC. Wow.

The charity continues to grow in leaps and bounds as we’ve produced successful events and gotten a diverse community of artists to support our cause from Sting, Joshua Bell, Lang Lang, Melanie Fiona, and Peter Bjorn and John, Fiery Furnaces to Alexandra Richards and more. Through these events and many others, we’ve worked with prestigious venues including Lincoln Center, the U.N. and Carnegie Hall which has helped us garner a certain level of respect in the industry, being such a young grassroots organization.

We are currently at a pivotal point in our organization’s growth to help support of our music education initiatives, which include a nationwide instrument drive and the creation of an all-scholarship-based Music Unites Summer Camp, similar to that of Tanglewood but for children who would traditionally not have the opportunity to go to such a camp.

Those are some fast achievements, and tantalizing possibilities. But what differentiates Music Unites from other non profits out there?

We’ve built a dynamic and culturally diverse community of artists that are committed to our mission, and we give our artists an opportunity to create their own programs tailored to their passions — so they can feel strongly for what they represent and stand for.

There’s consistency and regularity with our artist showcases which happen on a monthly basis. We’ve created a community where musicians across genres come and support one another

In less then a year, we’ve been able to partner with major companies like OK magazine, Rolling Stone and Lancome which has been tremendously exciting to such a young charity.

What’s rewarding about working with a musical non profit? Let us in on a memorable moment or two.

There are so many—it’s hard because they’re all very special for different reasons and a labor of love. I would have to say the UN peacekeeping concert with the UN, Lincoln Center Fall Masquerade with the Young Patrons, The Who Tribute at Carnegie Hall where the kids made their debut and the HIGHLIGHT- our December event with Sting and Trudie premiering their Twin Sprits project, a classical music project which I really think speaks to what we stand for.

Trudie Styler and Sting screened Twin Spirits with Music Unites in December. They're back on Wednesday with a live performance at JILC.

And now, being involved with the live production of the music on the 30th at Lincoln Center with our Music Unites artists including Joshua Bell and Natasha. Sting and Trudie’s Rainforest Foundation gala was the inspiration of Music Unites and it has been such a true privilege and honor to work with them.

Those are some serious privileges. On the flipside, what makes this initiative a bigger challenge than you expected?

The desperate need for this kind of thing. With budgets being cut every single day we need to raise significant funds to service the schools and communities, to keep music alive. We have the artists who are willing to do whatever it takes: Now the focus is on fundraising and helping take this organization to the next level.

We all need mentors. Who are people that have been inspiring you along the way?

Gustavo Dudamel, Conductor of the LA Philharmonic, Julie Greenwald, Atlantic Records President, and Sylvia Rhone, the President of Universal Motown. I’ve been inspired with the work Gustavo has done tied to El Sistema orchestras and want to be part of the work he is doing here in the US with building these orchestras. Also, he works hard in bridging the gap and looks to do things out of the box by pushing the envelope. This is needed, especially right now to attract new audiences to classical music.

Julie and Sylvia are women I look up to. They are leaders and innovators in the music business who inspire the next generation. If I can do half of what they’ve contributed to the music community over my lifespan, I’d be content with myself.

If people or companies want to get involved with Music  Unites, what are the different ways they can help?

We’re always looking for strategic partnerships and are always open to new ideas across a multitude of industries from music, fashion, technologic, entertainment. We build platforms and look to 360 marketing integrations that are mutually beneficial for the organization since they help raise money, in addition to being mutually beneficial for the brand and company.

The Music Unites Youth Choir debuted at Carnegie Hall with a Who tribute. (Photo by Bobby Bank/WireImage)

Finally, we say: Why must you be in NYC?

We were born here and NY will always be home. It’s the melting pot—uniting people and music!

– David Weiss