5:00am PT by Eriq Gardner
How All Those Intern Lawsuits Are Changing Hollywood
This story first appeared in the Nov. 14 issue of The Hollywood Reporter magazine.
Five years ago, when Eric Glatt became an intern for the movie Black Swan, he hardly fit the usual description of one. He was 40, had an MBA and was employed for years in the financial sector, including at insurance giant AIG. When the economic crisis hit, Glatt decided to pursue his passion for entertainment. He took a film editing course, got certified, and, through his alumni network at Wesleyan University, found out that the new Darren Aronofsky movie needed interns.
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For some, the opportunity to be a part of a film that would gross $330 million worldwide and earn a best picture Oscar nomination would represent a dream come true. Not for Glatt, who worked in the film's accounting department. There, he handled timesheets, analyzed reimbursements and delivered paychecks. He wondered why paid independent contractors -- and not him -- were being reimbursed for their laptops and cellphones.
Then in April 2010, two months after his internship ended, The New York Times published a story, "The Unpaid Intern: Legal or Not," which mentioned the Labor Department's six criteria for determining whether an internship should be paid. "I went, 'Holy crap,' " Glatt says. "Instantaneously, I realized of course this violates minimum wage laws. I could also understand why few had challenged it."
Glatt's decision to challenge it -- he's the lead plaintiff in the most important lawsuit ever filed over unpaid internships -- resulted in a summary judgment ruling that Fox Searchlight, the film's distributor, was his legal "employer." While Fox is appealing, the decision has ushered in a wave of lawsuits against the likes of Sony, Warner Bros. and Viacom. The suits are fundamentally changing the way Hollywood indoctrinates young workers, calling into question decades of tradition under the guise of apprenticeship. NBCUniversal, for example, has changed its policy and is paying its interns, and on Oct. 22 it agreed to shell out $6.4 million to resolve intern legal claims. Other companies, including Viacom, also have begun to pay all interns. Lena Dunham, who brought unpaid helpers on her recent book tour, agreed to pay them after an online outcry.
Others, including Fox' film business and its affiliated production companies, have responded by suspending internships, leading some to believe that an entertainment institution -- the entry point that launched everyone from Fox Networks Group CEO Peter Rice to NBC Entertainment chairman RobertGreenblatt -- could become a victim of this generation's changing notion of "putting in your dues."
"There is a long, long tradition of intern programs being an integral part of careers in Hollywood," argues Rick Levy, partner and general counsel at ICM Partners, which is fighting a class action case against former interns.
The lawsuits are alarming because intern programs are increasingly popular in "glamour" industries such as entertainment, fashion and media, where those who want in far outnumber the paying jobs available. Cathy Wischner-Sola, head of the intern program at the American Film Institute, has seen the transformation. "When I started 10 years ago, there was maybe a file of 15 internships," she says. "Now, we have 50. It's a big difference." She says AFI is placing interns -- paid and unpaid -- all over, including at Netflix, Amazon and the talent agencies. "Breaking into Hollywood is everyone's dream," she says. "There's romance and lore."
Britt'ni Fields always wanted to work in the music industry. But when the Illinois native became a marketing intern at Sony Music in 2008, she says she was directed to menial work and was not mentored. She has since initiated one of the lawsuits. When asked to identify the biggest change that would improve intern experiences, she responds, "It would have been great if previous interns were reached out to for job opportunities."
Internships, though, are supposed to be educational experiences and not necessarily entry points to specific employment. Criticism of the programs falls into two main categories.
First, many believe that such programs are exploitative and amount to consensual servitude. The Department of Labor's guide to whether an internship is a real training program examines, among other things, whether the internship is similar to training that would be given in an educational environment; whether it is for the benefit of the intern; and whether the intern displaces regular employees. Cross the lines, and lawsuits can commence.
Ben Harris, assistant director of the UCLA Producers Program, speaks of the need to be "vigilant" in policing intern programs because the school often is approached for interns by film and TV companies -- especially smaller ones -- that want "a worker on set, a gaffer or entry-level assistant without pay. That takes a job away from someone else." Those now won't be approved, he says, adding that big studios have been making "a very positive change toward structured programs with educational benefit," sometimes paid, though he notes that some companies recently have cut their programs.
"It's absolutely a burden, not a benefit, from an operational standpoint," gripes one industry employer about the new intern standards. This employer believes that the legal cases are prompting anindustrywide change from the days when interns were treated similar to paid assistants. "Everyone in the industry has further sharpened their programs to make sure they are educational," he says.
The second big criticism isn't really a legal concern, but rather a social one that examines the flip side of unpaid internships -- not that they are exploitative, but that they are too advantageous, at least for the select few who come from affluent backgrounds and can afford to work for no pay. Some even trace Hollywood's diversity problems to internships. It's a reason why Justin Swartz, a lawyer who has represented many ex-interns, has considered the lawsuits to be a "social justice issue."
To that end, Glatt says his Black Swan suit didn't come easy. He tried to get his alumni networks interested, but nobody wanted to rock the boat. He contacted the New York State Department of Labor but says the agency just referred him to a list of law firms. He was also presented with a chance to file a complaint, but Glatt wanted to do something bigger. Colleagues and friends attempted to dissuade him from raising a voice by pointing to potential consequences of being a noisemaker.
Glatt later spent time with Occupy Wall Street protesters. He had nearly given up his crusade when he got an email from Ross Perlin, author of Intern Nation: How to Earn Nothing and Learn Little in the Brave New Economy, alerting him to Outten & Golden, a firm that was seeking to bring a class action over internships.
Now, Fox is fighting hard against the claims, though insiders believe that the company isn't necessarily making a stand over paying interns but rather attempting to draw a line on the labor risks that come with working with subordinate production companies. (Technically, an entity called Lake of Tiers Inc. hired Glatt, though Judge William Pauley in his ruling came to the conclusion that "Searchlight closely supervised work on Black Swan.")
Meanwhile, others have been stepping forward. In August, Jason Rindenau, a law school grad whose past internships include Sony, Warner Bros. and ICM, joined the proposed class action against ICM, even though he says he's proud of the experience and enjoyed a barbecue at former chairman Jeff Berg's house. He says he was less thrilled with what he did for ICM, particularly shuttling packages around town. "Maybe they sell the internship experience as getting a foothold into employment," he says. "But it's kind of a smoke screen, a 'chew you up, spit you out' experience that's absolutely exploitation."
Some see the movement as already making a huge difference.
"With all the attention this issue has gotten, no head of HR, general counsel or intern program coordinator can now pretend they're unaware of the issues," says Perlin.
As for Glatt, he's now at Georgetown Law School and running a campaign called Intern Labor Rights. He says he intends to work on other social justice issues that shake up the status quo. "I understand why people have become wedded to keeping things the way they are," he says. "They say, 'It worked out for me, so what's the problem?' Yes, the winner of the blackjack table comes out ahead, but mostly the game is good for the house."
Perlin adds, "From NBC News to Lena Dunham, employers are starting to understand that interns have to be paid -- that it's a matter of law and ethics, but also good PR."