Hollywood Interns: Class Action Lawsuit Against Fox in Jeopardy

The Internship

Opens: June 7

In the comedy, two middle-aged (and tech illiterate) salesmen (Vince Vaughn and Owen Wilson) must deal with the increasing importance of technology in the digital age. After losing their jobs, the two fall into an internship at Google, forcing them to compete with the nation’s smartest, most tech-savvy young adults.

Fox Entertainment Group executives have been reading Harper's Bazaar, Cosmopolitan and Marie Claire and they like what they see.

On Wednesday, former interns at these publications owned by Hearst failed in a bid for class certification in a lawsuit over alleged exploitation of cheap labor. After determining that not enough commonality existed among some 3,000 fashion magazine interns, U.S. District Judge Harold Baer adjourned a trial "sine die," which translates from Latin to Cosmopolitan as "99 Ways the Judge Won't Give Me the Day."

Wasting no time, Fox raced to the federal judge in its own case to tell him to read up. As U.S. District Judge William Pauley is prepared within a matter of weeks to bless or deny class certification in the most significant challenge to Hollywood internships ever, Fox believes that individuals who once interned on such films as Black Swan and (500) Days of Summer as well as those who interned in its corporate department will soon experience the fate suffered by Hearst's interns.

Fox has reason to be confident.

In the Wang v. Hearst case, it was revealed that since 2008, the publisher worked to reduce costs by decreasing its headcount and expenses by increasingly using interns. Discovery showcased the fact that 229 full-time employees were eliminated as individuals like Xueden Wang, Erin Spencer and Elizabeth Mancini worked nearly full-day shifts for academic credit.

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In 2010, the Labor Department published a fact sheet in the wake of a Supreme Court ruling (Walling v. Portland Terminal Co.) that discussed how training programs should be for the advantage of the trainees. The memo spelled out six factors on how internships could overcome the employment label. One example? "The intern does not displace regular employees, but works under close supervision of existing staff."

The Labor Department memo "puts some meat on the Walling bones," said Judge Baer.

The judge continued by saying that a genuine issue of fact existed as to whether or not Hearst lived up to the standards articulated by the Labor Department -- denying the plaintiffs' motion for partial summary judgment on the possibility that a jury could find in favor of the defendant.

But more importantly, Judge Baer shrugs off the plaintiffs allegation that Hearst had a “centralized policy” of classifying all interns as unpaid, non-employees and determining that "the commonality requirement is not satisfied because Plaintiffs cannot show anything more than a uniform policy of unpaid internship." Further, the judge finds that the plaintiffs failed to meet certification tests of predominance (whether proposed classes are sufficiently cohesive) and superiority (whether a class action is superior to other available adjudication methods).

In his ruling, Judge Baer writes, "While there is undeniable efficiency that stems from consolidating and concentrating the litigation of similar claims, the individualized nature of proofs in this case signals that case management would be difficult, if not near-impossible, and separate actions may be more appropriate."

That's just what Fox wanted to hear. The company is facing a similar lawsuit over its internship program with damages estimated to be $5 million. Here are the arguments made by plaintiffs and Fox over class certification before the Wang ruling came out.

Now that a judge has delivered a big blow to one internship class action, Fox demands the same on another.

Represented by attorney Elise Bloom at Proskauer Rose, Fox tells Judge Pauley that the Wang ruling rejects "identical arguments" and tests the "very same five alleged common questions" and that Fox's suing interns can't overcome the commonality, predominance and superiority hurdles to certification. Here's Fox's full notice to the court.

We've reached out to Rachel Bien, the attorney for the plaintiffs, for a response and will hopefully update.

A decision on the lawsuit against Fox should be coming soon. Maybe not before the next issue of Cosmopolitan publishes, but perhaps before the release next month of Twentieth Century Fox's summer comedy film, The Internship, starring Vince Vaughn and Owen Wilson as a pair of Google interns. That film has been described by THR as a "treatise on the turmoil the great digital revolution has wrought on generations of workers whose long-honed skills are now desperately outmoded."

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