Gawker Beats Lawsuit Over Unpaid Internships

Nick Denton -Getty-H 2016
Gustavo Caballero/Getty Images for Showtime

This hasn't been the finest month in court for Gawker Media, but Nick Denton's web empire experienced a victory on Tuesday in a 3-year-old legal battle over unpaid internships.

Former Kotaku intern Aulister Mark and former io9 intern Andrew Hudson aimed to lead a class-action lawsuit against the company for allegedly not paying minimum wage under the Fair Labor Standards Act and New York Labor Law, but U.S. District Judge Alison Nathan concluded that claims made by Hudson and the opt-in plaintiffs were outside the statute of limitations.

Mark, whose stint at Gawker's video game blog lasted between May and August of 2010, did bring his claims soon enough, but nevertheless has failed under the 2nd Circuit's "primary beneficiary" test.

That refers to the big ruling in July 2015 when the federal appeals court, looking at two interns who both worked on Fox Searchlight's Black Swan, wrote that "an employment relationship is not created when the tangible and intangible benefits provided to the intern are greater than the intern's contribution to the employer's operation."

Applying this standard, Nathan considers that Mark conceded he had no expectation of compensation, the training and mentorship he received was the "same sort of hands-on instruction he received from his educational institution," he received academic credit and his school calendar was accommodated. Those were points in favor of Gawker. The judge also found that a reasonable jury could conclude that Mark did the same work as a paid Kotaku writer, but that there wasn't evidence that Gawker in fact used interns to displace paid employees.

"The Court has considered the totality of the circumstances and the economic reality of the relationship between Mark and Defendants," writes Nathan in her opinion. "Mark's time with Kotaku was a bona fide internship in which Mark traded his labor for significant vocational and educational benefits, and these benefits outweighed those received by Defendants in the form of Mark's work and the ability to evaluate him for future employment. There are no genuine issues of material fact — that is, issues that could change the Court's calculus if resolved in favor of Mark at trial. The Court concludes that Mark was the primary beneficiary of his internship, and grants summary judgment to Defendants on his FLSA and NYLL claims. Those claims are dismissed."

Gawker's victory comes less than two weeks after it was hit with a $140.1 million verdict in the Hulk Hogan sex tape case. The lawsuits are unconnected except to show that Denton will try cases to a conclusion. Other companies like Viacom and NBCU have paid millions in settlement money. 

As for the Glatt case, the one concerning Fox internships that paved the way for the latest ruling, the 2nd Circuit recently denied a petition for a rehearing, and last week, a trial court lifted a stay on the proceedings. Summary judgment motions could be coming soon.