October 02, 2013 3:28pm PT by Eriq Gardner
Fox Urges Appellate Court to Review Internship Ruling
With the future of Corporate America internship programs on the line, Fox Entertainment Group has filed a petition before the 2nd Circuit Court of Appeals in an attempt to have a federal judge's controversial ruling in June reviewed.
This past summer, U.S. District Judge William Pauley granted summary judgment to Alex Footman and Eric Glatt, who both worked on Fox Searchlight's Black Swan and claimed that the company's unpaid internship program violated minimum wage and overtime laws. The judge determined that Searchlight was their "employer," as that term is defined in the Fair Labor Standards Act and New York Labor Laws. The judge also certified a class action examining the legality of internships throughout the corporate departments at Fox Entertainment Group.
Fox wants the "employer" determination to be reviewed sooner rather than later, calling the issue one of "first impression" for the appellate circuit, and pointing to more than a dozen pending internship cases where judges are being presented with the issue of how to define employment. In addition, Fox wants clarification on the standards for class action certification in a FLSA claim. If the 2nd Circuit takes up review, it might not only impact challenges made by former interns of NBCUniversal, Warner Music, Sony Corporation of America, Gawker Media and elsewhere, it'll likely be seen as guidance for in-house attorneys looking to steer clear of any liability on the labor front.
"As each new decision will exacerbate the uncertainty for courts, litigants, and entities and individuals who wish to partake in lawful internship programs, this Court’s guidance is urgently needed now," says Fox in its petition filed on Tuesday.
It is that overhanging uncertainly that, Fox hopes, will convince the 2nd Circuit to take up the review immediately instead of waiting until case concludes.
While Fox experienced an adverse ruling favoring its former interns, another New York federal judge came to a different conclusion in denying class action certification to former interns at Hearst-owned publications like Harper's Bazaar, Cosmopolitan and Marie Claire.
In its petition, Fox talks about the two judges -- Pauley in its case and Judge Harold Baer in the Hearst one -- and how they interpreted a U.S. Department of Labor memo that articulated six factors on how internships could overcome the employment label.
"Judge Pauley’s decision relied on the six factors to the exclusion of all other facts and circumstances," says Fox's petition. "By contrast, Judge Baer’s decision undertook a 'totality of the circumstances' analysis, in which a key factor was who was the 'primary beneficiary' of the internship. The Circuits are likewise split on this issue."
Fox obviously likes Judge Baer's opinion better, and while it hasn't made its full case before the appellate court yet, the company does note that the Labor Dept.'s memo -- or "fact sheet" -- was merely guidance and "not an official statement of the DOL’s position on the standard for determining whether interns are employees."
Fox is being represented in its appeal by Elise Bloom at Proskauer Rose.