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2 YEARS

Hollywood Interns: Fox Lawsuit Likely to Break Ground

A proposed class action breaks down how Fox has allegedly exploited unpaid labor. Both sides make arguments in anticipation of a summary judgment ruling later this year.

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A lawsuit against the Fox Entertainment Group over internships is headed toward a big ruling later this year that could impact on-the-job training programs throughout corporate America.

The litigation was first initiated in September 2011 by two interns who worked on Black Swan who sued Fox Searchlight, claiming that the company's unpaid production internship program violated minimum wage and overtime laws. Then last year, the proposed class action expanded to Fox Entertainment's entire internship program, including its corporate divisions, and an amended complaint estimated damages to be at least $5 million.

In the past week, the plaintiffs' lawyers filed a motion for partial summary judgment as well as a motion for class certification. With references to scholarly articles, Labor Department letters and lots of details about Fox's operations aimed at satisfying various labor-law tests, the plaintiffs' lawyers make clear that this lawsuit will serve as a test case.

Not to be outdone, Fox has lodged its own court papers in an effort to strike the claims and prevail on its own summary judgment motion. If Fox is successful in defense, Hollywood studios -- and perhaps other corporations, too -- will be able to relax somewhat over future challenges to current internship policies.

Here's a copy of the plaintiffs' motion for partial summary judgment, which attempts to make the arguments that the interns performed work for the film company that displaced paid employees; that Fox financed, closely monitored and set employment conditions on productions like Black Swan; and that the internship program didn't qualify as a bona fide training program under the Labor Department's "Six Factor Test."

There are aspects of this lawsuit that make it directly material and relevant to companies throughout America. But there are also issues that are somewhat unique to Hollywood.

One of the items that's peculiar to the movie business is the technically complex way that hiring gets done on multimillion-dollar films. For example, on Black Swan, the hiring came not from Fox, but rather from an entity called Lake of Tiers Inc. On (500) Days of Summer, it was 500DS Films Corp.

The plaintiffs say, "Searchlight's claim that the 'single-purpose' corporations with which it contracted -- legal fictions created for the sole purpose of producing each film -- which lack assets and cease operations once the film is completed, were Plaintiffs' employers is comparable to arguments that garment manufacturers made in the early 20th century to avoid liability and that prompted Congress to adopt, in the FLSA, 'the broadest definition [of 'employ'] that has ever been included in any one act.'"

In moving for summary judgment, the plaintiffs spell out all the ways in which Fox managed and controlled operations and budgets of the films that interns worked on.

They say that Searchlight had the power to hire and approve key production staff, that the film company supervised the work on a daily basis, that Searchlight determined how many crewmembers could be hired and what their pay would be and more -- including that Searchlight enforced its intern policy.

"Searchlight was aware that interns worked on its productions," say the plaintiff's court papers. "Interns' names were listed on production reports, which set forth the names of individuals who were scheduled to work; interns received film credits, which Searchlight approved; and interns were listed on crew lists, which the productions submitted to Searchlight and which Searchlight used."

The summary judgment motion goes into detail about some of the experiences of the named plaintiffs as well as communications on the set of various films.

For example, Eric Glatt's supervisors allegedly told him that Searchlight had authorized his hire even though Glatt could not receive academic credit for his internship. On the set, the film's line producer allegedly sent an email in which she alerted Searchlight's executive vp of production to the fact that a union representative was present, complaining that an intern was doing work that should have been assigned to a "loader."

Glatt is said to have worked five days a week from 9 a.m. to 7 p.m. from December 2009 to February 2010, doing such tasks as tracking purchasing orders, reviewing personnel files, creating spreadsheets, making deliveries and photocopying accounting documents. The plaintiffs' papers said that if he didn't perform this work, "a paid crewmember would have had to work more hours to do it," and also that he "did not receive any training on Black Swan."

The plaintiffs' lawyers ultimately argue that their clients don't satisfy the factors the Department of Labor has articulated to determine whether an intern is a protected "trainee" because the internship wasn't similar to training given in an education environment, the work wasn't to the interns' benefit but rather to Searchlight's, the interns displaced regular employees, the interns expected money for their work and so forth.

Here, too, are the latest class certification papers. The lawyers say that another partial summary judgment motion covering corporate interns will be filed soon.

In response, Fox is attacking the way that all of the alleged activities are being grouped together.

According to Fox's motion to strike: "Four named Plaintiffs seek to certify five different classes of student interns, some of whom may have interned on any one of 27 movie productions (putative Production Interns) or may have interned at any of over 500 corporate offices nationwide (putative Corporate Interns). Plaintiffs make dozens of wage and hour claims under a host of state and federal laws against Defendants Fox Searchlight Pictures, Inc. and its parent company Fox Entertainment Group, Inc., neither of whom employed much of the putative class."

To strike the class claims, Fox attempts to show that it is not a "joint employer," that the company's role was limited with respect to production internships and that it's hardly possible to adjudicate claims made by individuals with such unique experiences.

"For example," says Fox, "did a Black Swan's intern's semester-end project give him unique insight into some aspect of movie production? Did the (500) Days of Summer intern who worked with the Director's assistant get something of value from that experience? What was the quality of the speakers at a Corporate Intern's weekly lunches? Did internships at Black Swan suffer from the lack of a formal training program, or was the experience nevertheless useful?"

Fox adds, "The facts will differ from intern to intern and must be examined individually."

Here is Fox's separate motion for summary judgment.

Oral arguments are set for May. The plaintiffs are being represented by a team at the law firm of Outten & Golden led by attorney Rachel Bien. The defendants are being represented by Elise Bloom and Amy Melican at Proskauer Rose.

E-mail: eriq.gardner@thr.com; Twitter: @eriqgardner